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Acct1101 Exam Final Sample

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Venue ____________________ Seat Number ________ Student Number |__|__|__|__|__|__|__|__| Family Name _____________________ First Name _____________________ Venue ____________________ Seat Number ________ Student Number |__|__|__|__|__|__|__|__| Family Name _____________________ First Name _____________________ This exam paper must not be removed from the venue School of Business SAMPLE EXAMINATION ACCT1101 Account for Decis Making This paper is for St Lucia Campus students. For Examiner Use Only Question Mark 1 | | 2 | | 3 | | 4 | | | | MCQ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total For Examiner Use Only …show more content…

This would be recovered at the end of seven years. On the benefit side, James estimated that the new process would save $202,500 per year in environmental costs by eliminating fines and clean-up costs. The cost of capital is 10%. Required: 1. Prepare a schedule of relevant net cash flows for the proposed project. 2. Calculate the NPV of the project. 3. Should the new process design be accepted? 4. What factors should James consider other than environmental ones when deciding whether to go ahead with this project? Question 4 Sailaway Limited is a small yacht builder. It has operated successfully for many years from a factory that allows for production of 40 yachts per year. In most years the company can sell all the yachts it can produce. The selling price of each yacht is $12 600. Variable labour and materials costs are $7 750 per yacht, and the fixed costs associated with running the business from the present factory are $58 200. The company's directors are meeting to discuss a proposal to increase the business's production capacity. A neighbouring factory has become vacant and it would be possible to rent the additional space in order to produce more yachts. The additional capacity in terms of production would be 20 yachts. The

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