Question 11
A project is viable because it has a positive net present value (NPV).
Details of four of the input variables, together with the sensitivity of the viability of the project to a change in each one in isolation, are given below.
Which of the following statements is correct?
Details of four of the input variables, together with the sensitivity of the viability of the project to a change in each one in isolation, are given below.
Which of the following statements is correct?
Question 12
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?
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?
Question 13
Juan is looking to invest in the mining industry. He has narrowed his options down to two rival companies, both with sales of £200m. Company A has an EBIT of £10m whereas Company B has an EBIT of £14m.
This would suggest that Company B is the better investment but Juan is suspicious that Company B has more financial backing than Company A.
Which ratios will tell him which company will use his investment the best?
This would suggest that Company B is the better investment but Juan is suspicious that Company B has more financial backing than Company A.
Which ratios will tell him which company will use his investment the best?
Question 14
Residual income is an appropriate performance measure for which type of responsibility centre?
Question 15
Under the absorption costing system, which simply allocates our entire amount of production overheads based on machine hours, we have found that out of our 4 products, 2 are profitable, 1 breaks even and
1 is
making a loss.
Model D the most recent addition to the range is making a large loss after the price of a major component rose dramatically. Model A is only just breaking now too as costs have risen. The only two products making profit are Models B and C. These two require the least about of machine hours so this makes sense.
However, the management have a few reservations. They cannot understand how B is so profitable. It requires several more stages of production than the other models and a whole day longer to be customised by an expert.
Select the correct answer from the list below that can help to explain this situation.
1 is
making a loss.
Model D the most recent addition to the range is making a large loss after the price of a major component rose dramatically. Model A is only just breaking now too as costs have risen. The only two products making profit are Models B and C. These two require the least about of machine hours so this makes sense.
However, the management have a few reservations. They cannot understand how B is so profitable. It requires several more stages of production than the other models and a whole day longer to be customised by an expert.
Select the correct answer from the list below that can help to explain this situation.