Complete P2 CIMA Materials

Advanced Management Accounting Questions and Answers

Question 29

A company has just received the latest in a series of annual payments; this payment was $620. The annual payments are expected to continue for three more years with each payment being increased by the expected rate of inflation. The real cost of capital is 8% per year and the expected rate of inflation is 6% per year.

What is the present value of the future payments the company expects to receive?

Give your answer to the nearest $.

Options:

Question 30

Which of the following is a correct description of the key features of net present value?

Options:

It adjusts the relevant cash flows of a project to reflect the time value of money. The discount rate used is always the company's weighted average cost of capital.

It adjusts the relevant cash flows of a project to reflect the time value of money. The discount rate used reflects the risk of the project.

It adjusts the relevant profits of a project to reflect the time value of money. The discount rate used reflects the risk of the project.

It adjusts the relevant cash flows of a project after the deduction of depreciation charges to reflect the time value of money. The discount rate used is always the company's weighted average cost of capital.

New Year Special 70% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: save70

Advanced Management Accounting Questions and Answers

Options:

Answer:

Options:

Answer:

CompTIA

Fortinet

Microsoft

Salesforce