Which of the following investment appraisal methods provides an absolute monetary value on which to base decisions?
Division A is an investment centre with assets of $7.3 million. The following is an extract from the annual budget for division A:
The cost of capital is 14%.
Calculate the residual income for division A.
A company is considering investing $150,000 in a project which will generate the following contributions during the first three years.
Tax depreciation allowance is 25% each year of the reducing balance.
The taxation rate is 30% of taxable profits and tax is payable in the year after that in which it arises.
To the nearest $10, what is the forecast total project cash flow in year 3?
A machine requires an initial investment of $500,000. The net present value (NPV) of the investment in the machine is $36,500.
Which of the following statements is correct in relation to the sensitivity of the investment?
TESTED 30 Apr 2024
