Question 76

Explain why sensitivity analysis is useful when dealing with uncertainty in project appraisal.
Select all the true statements.
  • Question 77

    A company makes Product A and Product B. The production process for both products uses one type of material, one type of labour, and utilises one machine. All three of these resources will be limited in November. The company has performed a linear programming model and the constraints and optimal solution, to maximise contribution, are as follows:
    Constraints:

    For November, which of the above constraints are binding, and which are non-binding?

    Question 78

    A company's management is considering investing in a project with an expected life of 4 years. It has a positive net present value of $180,000 when cash flows are discounted at 8% per annum. The project's cash flows include a cash outflow of $100,000 for each of the four years. No tax is payable on projects of this type.
    The percentage increase in the annual cash outflow that would cause the company's management to reject the project from a financial perspective is, to the nearest 0.1%:
  • Question 79

    A company manufactures a single product. The following budgeted data applies to month 6:

    What was the budgeted fixed production overhead for month 6?
    Give your answer to the nearest whole $ (in '000s).

    Question 80

    A manufacturing company has more units of finished goods inventory at the end of a period than at the beginning of the period.
    Which of the following statements is true?