A company is considering investing in a new piece of machinery costing $100,000. The discount rate is 8% and net cash flows are as follows. What is the discounted payback period?The discount rates are as follows:
A. 2 years and 30 weeks
B. 3 years and 2 weeks
C. 2 years and 38 weeks
D. 2 years and 50 weeks
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What does IRR calculate?
A. The time period by which an investment will produce the required rate of return
B. What the Net Present Value is at a given cost of capital
C. Whether or not to invest in a project
D. The rate of return which will result in an NPV of zero
The current plans for a product result in a margin of safety of 1,000 units. Will this margin of safety increase or decrease as a result of these scenarios?Breakeven point in units 2,500 units: Expected level of sales 4,200 units
A. Increase the margin of safety
B. Decrease the margin of safety
Breakeven point in units 3,500 units: Expected level of sales 4,200 units
A. Increase the margin of safety
B. Decrease the margin of safety
An organisation implements efficiency measures which lead to a reduction in both the total fixed costs and the unit variable costs associated with selling Product A.If the organisation makes no change to the selling price of Product A and the sales volume remains constant, what will be the effect on the margin of safety?
A. Increase
B. Decrease
C. No change
D. There is not enough information to answer the question