Question 41
A company has just completed the production of the first 16 batches of a product. A learning curve has been observed throughout. The following table gives further details.
To the nearest whole percentage, what rate of learning is implied?
Question 42
Which TWO of the following statements are correct?
Question 43
A company has a maximum of $2 million to invest and has identified four viable projects, E, F, G and H.
The initial investment for each of the projects is the maximum amount that can be invested in the project, but any amount up to the maximum can be invested. The projects are divisible.
The projects have been evaluated using net present value, as below. All figures are $ millions.
In which project should the company invest $2 million?
Question 44
Which of the following is a correct description of the key features of net present value?
Question 45
A company has recently developed a new lawnmower with an estimated market life of 5 years.
Production and sale of the lawnmower will require investment in new production equipment costing
$750,000. It is expected that this equipment could be sold back to the original vendor for $50,000 at the end of five years.
Purchase of the equipment would be financed by a 5 year fixed rate bank loan at an interest rate of 6%.
A manager already employed by the company would be moved from their current position to manage production of the new lawnmower. Their original position would be filled by a new recruit on a fixed annual salary of $35,000.
Which of the following statements is NOT correct?