Free BA2 Exam Braindumps (page: 29)

If fixed costs are increased, the gradient of the line plotted on a profit/volume (PV) graph will be:

CORRECT TEXT

Refer to the exhibit.



The output and costs for two periods were as follows:

Fixed costs will remain constant, but during Period 7, the variable cost per unit will increase by 25%. The output for Period 7 will be 1,600 units.

The budgeted total cost for period 7 will be:

CORRECT TEXT

Refer to the exhibit.



The budgeted sales revenues for a retailer are as follows:

The payment patterns of customers are expected to be as follows:

*The remaining 10% of sales are bad debts.

*A discount of 20% is given on cash sales.

The budgeted receipts from customers in December are:

Fast Manufacturers PLC have reconsidered their new project and the initial investment required of £1,000,000 is now 25% less than the original conception. The project will remain will have a three year life span and

have no scrap value.

However, this new conception has operating costs of £150,000 in year 1, and increasing by 5% due to inflation the following years. The gross revenue will also be higher across the board. The new project conception is

forecasting a gross revenue of £525,000 in year 1 and again increasing with inflation 5% for years 2 and 3.

If the cost of capital has remained at 14%, should Fast Manufacturers PLC go ahead with the revised project?