A tennis club is considering running an open day to encourage new members and thus increase membership fees. The cost of the open day will be $1,000. Attendance is dependent on the weather.
There is a 60% chance of good weather and a 40% chance of poor weather on the open day.
The expected new membership fees are:

What is the expected value of running the open day?
Give your answer as a whole number.

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Explain why sensitivity analysis is useful when dealing with uncertainty in project appraisal.
Select all the true statements.

• A.Sensitivity analysis enables a company to determine the effect of changes to variables on the planned outcome
• B.Sensitivity analysis enables a company to determine the effect of changes to fixed costs on the planned outcome
• C.In project appraisal, in analysis can be made of all the key variables to ascertain by how much each variable would need to change before the net present value (NPV) reaches 100% i.e. the maximum point.
• D.In project appraisal, an analysis can be made if all the key variables to ascertain by how much variable would need to change before the net present value (NPV) reaches zero i.e. the indifference point.

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A company's budgeted data for the period are shown in the table below.

There is a stepped increase in fixed overheads of $10,000 when production exceeds 52,000 units.
Actual production for the period was 60,000 units.
What is the flexed budgeted cost for the period?
Give your answer as a whole number (in '000s).

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Information about a company's two products is as follows:

The products are currently sold in equal quantities.
Monthly fixed costs are $360,000.
What is the monthly breakeven sales revenue assuming a sales quantity mix of 50/50?
Give your answer to the nearest $.

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THS produces two products from different combinations of the same resources. Details of the products are shown below:

Identify, using graphical linear programming, the optimal production plan for products E and R to maximize THS's profit in the month.

• A.The solution (from the graph0 is to produce 475 units of E and 770 units of R.
• B.The solution (from the graph0 is to produce 495 units of E and 670 units of R.
• C.The solution (from the graph0 is to produce 375 units of E and 750 units of R.
• D.The solution (from the graph0 is to produce 675 units of E and 470 units of R.
• E.The solution (from the graph0 is to produce 375 units of E and 870 units of R.
• F.The solution (from the graph0 is to produce 495 units of E and 470 units of R.

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