TTR Ltd plans to purchase a new plant for $1,000m on the 1st of January 20X6. The annual sales expected from the production of this plant is S400m per year. The plant has an expected life of five years. The financial accountant has computed the NPV of the project at $61.42m considering a discount rate of 10%.
The marketing director wants to know the percentage drop in revenue that the sales team can afford before the project becomes unviable. Which of the following indicates the percentage required by the marketing director?

A company has recently developed a new lawnmower with an estimated market life of 5 years.
Production and sale of the lawnmower will require investment in new production equipment costing
$750,000. It is expected that this equipment could be sold back to the original vendor for $50,000 at the end of five years.
Purchase of the equipment would be financed by a 5 year fixed rate bank loan at an interest rate of 6%.
A manager already employed by the company would be moved from their current position to manage production of the new lawnmower. Their original position would be filled by a new recruit on a fixed annual salary of $35,000.
Which of the following statements is NOT correct?

An investment centre is appraising a potential project that is expected to yield a Return on Investment (ROI) of 12%.
Without the project the investment centre expects to earn an ROI of 14%. The cost of capital is 10%.
What would be the impact on the investment centre's performance measures if the project is accepted?

Oliver owns a computer repair company. He is looking to close of of his departments as the demand for computer cleaning has dropped dramatically in the last 2 years and is no longer profitable.
The contribution margin of the department is £12,000, and the overheads are £23,000 (out of which
£4,000 cannot be eliminated).
How would closing this department impact operating income?

SkillWeave Industries are focused on managing the risk of selling their cars to the region due to economic turmoil, and have now begun using funds from sales in the region to fund supplier purchases from that region to reduce the risk from the volatile currency. However, SkillWeave want to go a step further and make the risk even less sizeable.
Which of the following is a method by which SkillWeave can operate in the market and transfer the risk of exchange rate exposure to another party?