ZZZ is a divisionalised company that uses the balanced scorecard approach to monitor divisional performance. Each measure on the scorecard is classified as green (if they are better than expected), amber (if expectations have been met) or red (if they are poorer than expected).The Southern Division's scorecard shows that 90% of the measures are amber, 3% are green and 7% are red.All of the red classifications are listed under the Learning and Growth perspective and have arisen largely because the division has lost a lot of staff to a major competitor who offered a better rate of pay.Which THREE of the following statements are correct?
Answer(s): A,B,C
A company is investing in a huge diversification project. The plan is to develop and sell a whole new product line that they have never sold before. They've already started a massive marketing campaign for this newproduct line and they are getting good feedback in their market research.They've had to use debt funding in order to finance the project, but they hope that the returns will be worth the investment and restructuring. If they are successful they will be a step ahead of all their competitors and offersomething none of them can.What is the risk appetite of this company?
Answer(s): A
An investment centre manager is considering the purchase of a new machine. If purchased, the new machine would replace an existing one that is used to manufacture one of the investment centre's existing products.The new machine would incur $800 per month additional running costs; this includes $300 per month of additional depreciation.The new machine would save on direct labor time. This means that the fixed production overhead absorbed by the product on the basis of direct labor hours would reduce by $100 per month.What is the total cost of the above that is relevant to the decision to purchase the machine?
The following forecast data relate to the first three years of a five year project.The project will require an initial investment of $30,000 in non-current assets.All revenue will be received in the year it is earned and all operating costs will be paid in the year they are incurred. Tax will be paid in the following year.Tax depreciation will be 25% per annum of the reducing balance.The taxation rate will be 30% of taxable profits.What is the forecast after tax cash flow for year 3 (to the nearest $10)?
Which of the following statements about modified internal rate of return (MIRR) and internal rate of return (IRR) is correct?
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