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CIMA Fundamentals of management accounting BA2 Question # 75 Topic 8 Discussion

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CIMA Fundamentals of management accounting BA2 Question # 75 Topic 8 Discussion

BA2 Exam Topic 8 Question 75 Discussion:
Question #: 75
Topic #: 8

A company’s management accountant wishes to calculate the present value of the cost of renting a delivery vehicle. There will be five annual rental payments of $5,000, the first of which is due immediately. The company’s discount rate is 12%.

Which TWO of the following are valid ways to calculate the present value of the rental payments? (Choose two.)
A.

$5,000 + ($5,000 x 3.605)

B.

$5,000 + $5,000/1.12 + $5,000/(1.12)2 + $5,000/(1.12)3 + $5,000/(1.12)4

C.

$5,000/1.12 + $5,000/(1.12)2 + $5,000/(1.12)3 + $5,000/(1.12)4+ $5,000/(1.12)5

D.

$5,000 x 3.605

E.

$5,000 + ($5,000 x 3.037)

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Actual exam question for CIMA BA2 exam by Vega1421 at Aug 3, 2025, 12:00:00 AM

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