CIMA Financial Strategy F3 Question # 55 Topic 6 Discussion

CIMA Financial Strategy F3 Question # 55 Topic 6 Discussion

F3 Exam Topic 6 Question 55 Discussion:
Question #: 55
Topic #: 6

A company generates and distributes electricity and gas to households and businesses.

Forecast results for the next financial year are as follows:

F3 Question 55

The Industry Regulator has announced a new price cap of $2.00 per Kilowatt.

The company expects this to cause consumption to rise by 15% but costs would remained unaltered.

The price cap is expected to cause the company's net profit to fall to:


A.

$8.75 million profit


B.

$164.00 million profit


C.

$43.00 million profit


D.

$126.50 million loss


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