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CIMA Advanced Management Accounting P2 Question # 17 Topic 2 Discussion

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CIMA Advanced Management Accounting P2 Question # 17 Topic 2 Discussion

P2 Exam Topic 2 Question 17 Discussion:
Question #: 17
Topic #: 2

A project is viable because it has a positive net present value (NPV).

Details of four of the input variables, together with the sensitivity of the viability of the project to a change in each one in isolation, are given below.

P2 Question 17

Which of the following statements is correct?
A.

A 1% change in the initial investment will result in a change of 3% in the NPV.

B.

The resale value at the end of the project is the most sensitive of the four variables.

C.

If the incremental annual cash contributions reduce by more than 8% then the project will no longer be viable.

D.

If the rate of taxation on profits increases to 40% then the project will no longer be viable.

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Actual exam question for CIMA P2 exam by Talon3510 at Aug 3, 2025, 12:00:00 AM

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