Intermediate A company uses decision tree analysis to evaluate potential options The management accountant for the company has established the following What would be the cost of the upgrade that would make the company financially indifferent between building new premises al upgrading the old one (...

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Intermediate. A company uses decision tree analysis to evaluate potential options. The management accountant for the company

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Intermediate. A company uses decision tree analysis to evaluate potential options. The management accountant for the company has established the following:

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What would be the cost of the upgrade that would make the company financially indifferent between building new premises al upgrading the old one?

(a) £100 000

(b) £900 000

(c) £1000 000

(d) £1 700000 ACCA Paper 1.2 - Financial Information for Managem

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Management And Cost Accounting

ISBN: 9781408093931

9th Edition

Authors: Colin Drury

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Question Posted: Jun 05, 2024 01:02 AM

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Intermediate. A company uses decision tree analysis to evaluate potential options. The management accountant for the company

Question:

Build new premises Cost 1 000 000 Cash flows from sales revenu 0.8 High sales 2 000 000 0.2 Low sales 1 000 000 0.7 High sales = 2 000 000 Upgrade old premises Cost = ? 0.3 = Low sales 1 000 000

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Management And Cost Accounting

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