Exam P2 Topic 7 Question 87 Discussion

Actual exam question for CIMA's P2 exam
Question #: 87
Topic #: 7
The directors of a company wish to evaluate two mutually exclusive capital investment projects. Both projects have conventional cash flows: an initial outflow followed by a series of annual cash inflows.
The directors are aware of the following three investment appraisal methods: internal rate of return (IRR), net present value (NPV) and accounting rate of return (ARR).
The directors have asked for your advice about which method should be used to evaluate these two projects.
Which of the following is valid advice to give to the directors?

Suggested Answer: A Vote an answer

by George at Nov 15, 2025, 03:02 AM

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