guys i need a final verdict on this one… so 2.4 rounds DOWN or UP i said 2 yrs 3yrs for discounted but then u start thinking…true that 2 yrs round better for the 2.4 payback and honestly i think it was a mistake on their side they shouldve listed the exact amount as practice says payback has to include accurate figure not whole numbers but then the other arguement is…if u rounded down then 2 yrs doesnt payback the entire amount but 3 years gaurantees that you do…i dunno its just retarded your views
i also rounded down… and acutally i never thought about the point you mentioned here , but i think it was “closest to” question and if you round down then its correct choice
There is not much point in discussing this one. People will have different views. I spend few mins on this one and finally chose 3,4 though 2,3 looked equally good to me. I guess general consensus is 2,3 and I tend to believe that might be the right answer as well.
I thought it was 2, but after the exam I realized it was actually 3 years of payback period. Just ask yourself a question:“in which year will they payback their initial investment?” in cca May of the third year! Milos
I don’t think we should round down. It’s not those typical scenarios you tell by whether the tailing digit is over 0.5 or not. I have come across some similar questions in Schewster and they use round up for sure.
dashingdude Wrote: ------------------------------------------------------- > There is not much point in discussing this one. > People will have different views. I spend few mins > on this one and finally chose 3,4 though 2,3 > looked equally good to me. I guess general > consensus is 2,3 and I tend to believe that might > be the right answer as well. I went for 3 and 4 as well. Unless you got whole of the money back- it is not payback.
was the question about the closest time? which would mean round off ? debatable i would say
I think they expected 3,4, now that I read this thread, and I think I went for 2,3 most likely.
I believe I understood the question wrong as well.
I REMEMBER THIS, IT MADE ME SO MAD! I put 2. 2.4 is closer to 2 than 3. Hope that’s what they wanted.
Thing about in absolute terms, is April 08 closer to Dec 07 or Dec 09?
I’m about 90% sure I have seen this question in Schweser q-bank and the answer was the year following a value calculated (3 in this case). Yep, I managed to screw it up twice… Milos
Once you have calculated a value (2.4 in this case) and the time comes to choose a closest value, the fundamentals specific to the Q are lost (whether you go up or down). You simply have to round it as we do with the other “closest” type of choices.
Except (I realize now), rounding to the lower number, is not giving the correct period.
everyone can post this problematic question on CFAI and they will consider to eliminate the question for couting. It will be fair to everyone since CFAI should provide ans choice at least 2.4 and 3 and ppl will pick this one.
I put 3,4 because it is in YEARS, so if its more than 2 years, its still in the 3 year range so its 3,4.
By the rule anything above x.5 is rounded to (x+1) and below x.5 to x. try it on your calculator.
Except going by the rule gave the wrong answer.
For example: 1.232 -> 1.23 1.236 -> 1.24 2.4 -> 2 2.6 -> 3
I just dont think that 3 makes sense to me. if an investments is recovered say in 2.1 years, you cannot say it pays in 3 just because its over 2. and I said 2.1 because people who chose 3 did it just because it was over 2. what if an investment is recovered in 2 years and 10 days. would the same reasoning apply?