CIMA Exam CIMAPRO19-P01-1 Topic 3 Question 74 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam

Question #: 74
Topic #: 3

[All CIMAPRO19-P01-1 Questions]

A decision tree is being evaluated back to a decision point.

There are two alternatives at this point:

1. To abandon the project and generate a return of $435,000;

2. To continue with the project and generate the following possible returns:

What value should be included at the decision point?

A$435,000

B$451,000

C$443,000

D$720,000

Show Suggested Answer

Suggested Answer: A, D, E

References:

by Candida at Aug 28, 2023, 07:38 PM

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Casie

2 months ago

I'm picking option A. $435,000. It may not be the highest, but at least I know what I'm getting. No need to risk it all on the unknown, am I right? Slow and steady wins the race, as they say.

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Charlene

2 days ago

I see your point, but I would personally choose option D. $720,000 is a high return and worth the risk in my opinion.

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Stefany

3 days ago

I think I would go with option B, $451,000 is a tempting offer. Sometimes taking a risk pays off.

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Jackie

5 days ago

I agree with you, option A seems like the safe choice. $435,000 guaranteed is better than risking it all.

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Mitsue

16 days ago

Art: Exactly, no need to take unnecessary risks.

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Art

20 days ago

User 2: I think so too. It's better to go for the guaranteed return.

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Tonette

1 months ago

User 1: I agree with you, option A seems like the safer choice.

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Tiffiny

2 months ago

Ah, the old decision tree dilemma. I'm feeling lucky, so I'm going with B. $451,000. After all, what's a few thousand dollars between friends? Let's roll the dice and see what happens!

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Dusti

2 months ago

I'm going with C. $443,000. It's the average of the two possible returns from continuing the project, and that seems like a safe bet to me. No need to get too fancy here.

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Phil

11 days ago

I'm not sure, but I think I'll stick with A. $435,000. It's better to play it safe in this situation.

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Kandis

16 days ago

I agree with C. $443,000. It's a safe choice and the average of the two possible returns.

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Lorrie

17 days ago

I'm leaning towards D. $720,000. It's a bit riskier, but the potential return is higher.

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Selma

1 months ago

I think I'll go with B. $451,000. It seems like a good balance between the two options.

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Carmen

2 months ago

Hmm, this one's tricky. I'm leaning towards D. $720,000, since that's the highest possible return if we continue the project. Who doesn't love a big payout, right?

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Michael

2 months ago

That's true, but the potential return of $720,000 is tempting. We should take the risk.

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I think the answer is B. $451,000. The expected value of continuing the project is calculated as (0.4 * $700,000) + (0.6 * $250,000) = $451,000. This is higher than the $435,000 return from abandoning the project.

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Elouise

2 months ago

Yes, it seems like the better decision financially.

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Gaston

2 months ago

I think we should definitely continue with the project then.

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Rachael

2 months ago

That makes sense, the expected value calculation supports that.

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Geraldine

2 months ago

I agree with you, the answer is B. $451,000.

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Vicky

2 months ago

But what if the returns are not as high as expected? Maybe it's safer to abandon the project.

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Michael

2 months ago

I think we should continue with the project for a chance to earn more.

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CIMA Exam CIMAPRO19-P01-1 Topic 3 Question 74 Discussion

Contribute your Thoughts:

Casie

Charlene

Stefany

Jackie

Mitsue

Art

Tonette

Tiffiny

Dusti

Phil

Kandis

Lorrie

Selma

Carmen

Michael

Annmarie

Elouise

Gaston

Rachael

Geraldine

Vicky

Michael