1. Home
  2. Discussions
  3. CIMA
  4. CIMA Management
  5. F2 Discussions
  6. F2 Exam Topic 1 Question 3 Discussion

CIMA F2 Advanced Financial Reporting F2 Question # 3 Topic 1 Discussion

 CIMA Discussions      Browse All Questions      Go to Exam Detail      Get Premium Access
 Previous
Next  

CIMA F2 Advanced Financial Reporting F2 Question # 3 Topic 1 Discussion

F2 Exam Topic 1 Question 3 Discussion:
Question #: 3
Topic #: 1

XY has a weighted average cost of capital (WACC) of 10% based on its gearing level (measured as debt/debt+equity) of 40%.  It is considering a signficant new project. 

In which of the following situations would it be appropriate to appraise this project using XY's existing WACC of 10%?
A.

The project is in a different industry to XY's current operations and funded entirely by equity.

B.

The project is an extension of XY's current operations and is funded 40% by debt and 60% by equity.

C.

The project is an extension of XY's current operations and is funded by equal amounts of debt and equity.

D.

The project is in a different industry to XY's current operations and is funded by equal amounts of debt and equity.

Get Premium F2 Questions
Actual exam question for CIMA F2 exam by Cyra28402 at Aug 3, 2025, 12:00:00 AM

Contribute your Thoughts:


Chosen Answer:
This is a voting comment (?). It is better to Upvote an existing comment if you don't have anything to add.

Submit
 Previous
Next