CIMA Financial Strategy F3 Question # 76 Topic 8 Discussion

CIMA Financial Strategy F3 Question # 76 Topic 8 Discussion

F3 Exam Topic 8 Question 76 Discussion:
Question #: 76
Topic #: 8

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

 

Forecast results for the next financial year are as follows:

  F3 Question 76

The Industry Regulator has announced a new price cap of $1.50 per Kilowatt. 

The company expects this to cause consumption to rise by 10% but costs would remained unaltered. 

 

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


A.

$47.5 million profit


B.

$27.5 million profit


C.

$20.0 million profit


D.

$35.0 million loss


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