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Exam CBAP topic 1 question 333 discussion

Actual exam question from IIBA's CBAP
Question #: 333
Topic #: 1
[All CBAP Questions]

A company has a process improvement initiative that is projected to increase revenue by $150,000 USD non-compounded per year. The budgeted cost of the initiative is $200.000 and supporting the initiative will cost $30.000 for years two and three.
What is the projected return on investment over the first 3 years?

  • A. 44%
  • B. 73%
  • C. 40%
  • D. 51%
Show Suggested Answer Hide Answer
Suggested Answer: A 🗳️
Expected revenue was multiplied by 30 percent cost increased per year. The outcome is the answer to the question.
by RaSum at Dec. 19, 2020, 7:56 a.m.

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siliconvalleykam
Highly Voted 3 years, 3 months ago
Answer is 73% 450,000-260,000/260,00 =.73 convert into % as the answer is in percentage.
upvoted 18 times
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km_45
Highly Voted 3 years, 3 months ago
BABOK p 287: Return on Investment = (Total Benefits – Cost of the Investment) / Cost of the Investment.
upvoted 8 times
[Removed]
7 months, 3 weeks ago
There is a difference between calculating planned investments and comparing change initiatives. Read the paragraph 'Return on Investment'.
upvoted 1 times
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subyottun
Most Recent 3 months, 4 weeks ago
How is the answer A pls?
upvoted 1 times
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raf79
9 months, 3 weeks ago
Selected Answer: B
(150k x 3) - (200k + 30k + 30k) / (200k+30k+30k) = 0.73
upvoted 5 times
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Atzewine
1 year ago
Selected Answer: B
The formula to calculate ROI is: Return on Investment = (Total Benefits – Cost of the Investment) / Cost of the Investment.
upvoted 1 times
Atzewine
1 year ago
Page 277 BABOK V3
upvoted 1 times
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Squib
1 year, 2 months ago
B. 73%
upvoted 1 times
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Kakashi_Sensei
3 years, 3 months ago
Me too
upvoted 1 times
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RaSum
3 years, 4 months ago
I want to understand the formula for this
upvoted 1 times
NickMane
2 years, 7 months ago
Here's the logic behind this: You invested 200.000 initially plus 30.000 second year and 30.000 third year Total invested: 260.000 Revenue yearly 150.000...in three years 150.000 x3 = 450.000 total revenue 450.000 Difference between invested and gained -260.000 + 450.000 = 190.000 hence, Money gained /money invested = 190.000 / 260.000 = 0,73 *100 = 73%
upvoted 10 times
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C (25%)
B (20%)
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