CIMA Related Exams
P2 Exam
A project requires an initial investment of $50,000. It will generate positive cash flows for two years as follows.

The cost of capital is 12% per year.
What is the equivalent annual net present value of the project?
Give your answer to the nearest $10.
Which TWO of the following statements are correct?
IOP's product is manufactured using a production process that is known to have a defect rate of 10%.
IOP's quality control department has developed a test that has a 98% probability of classifying a non-defective item correctly and a 2% probability of classifying a non-defective item as defective.
The same test has a 95% probability of classifying a defective item correctly and a 5% probability of classifying a defective item as non-defective.
Calculate the proportion of IOP's output that will be classified as non-defective by the quality control department's test.
Give your answer to one decimal place.