$10$ A project that has been tested for its feasibility has already incurred

market research costs of $50,000.$ The actual cost of the asset is $100,000$ and

the project is expected to yield the following returns:

Year $190,000$

Year $280,000$

Year $370,000$

If the discount rate is $12\%$ the NPV of the project will be:

$294,000$

$44,000$

$140,000$

$94,000$

$11.$ A project has an NPV of $12,632$ when a discount rate of $12\%$ is used and

the same project has an NPV of $(6,935)$ when a discount rate of $22\%$ is used,

the actual internal rate of return of the project is:

$6\mathrm{.}5\%$

$28\mathrm{.}5\%$

$16\mathrm{.}5\%$

$18\mathrm{.}5\%$

$12$ A company is considering investing in a machine with a capital cost of

$300,000$ with a useful life of $4$ years. Annual running costs are expected to

amount to $276,000$ including straight line depreciation of $70,000$ per annum.

It is estimated that the machine can be disposed of at its net book value at the

end of its life.

The capacity of the machine will be $6$ million items for the first two years but

this will fall to $5$ million items in years $3$ and $4.$ It is estimated that the

company will be able to sell whatever the machine produces. The average

contribution is $60$ per $1,000$ units. What is the payback period for the

machine?

$1\mathrm{.}92$ years

$2\mathrm{.}09$ years

$0\mathrm{.}94$ years

$1\mathrm{.}94$ years

$13.$ The discount factor used to appraise capital investment decisions is a

measure of:

The opportunity cost of capital of the business

The opportunity cost of capital of all businesses in the same industry

The current inflation rate

The current high street interest rate$1.$ Cost Variance greater than zero implies that

Actual Cost $($AC$)$ is more than Earned Value $($EV$)$

Project is over budget

Project is under budget

Cost performance is as per the baseline plan

$2.$ Budget remaining on the project is expressed as

$($BAC $-$ AC$)$ or $($EAC $-$ AC$)$

BAC $-$ EV

EAC $-$ PV

BAC $-$ PV

$3.$ CPI greater than one implies that

Project is over budget

Project progress is as per the baseline plan

Actual Cost $($AC$)$ is greater than Earned Value $($EV$)$

Project is under budget

$4.$ Cost Variance less than zero implies that

Cost performance is as per the baseline plan

Project is under budget

Project is over budget

Actual Cost $($AC$)$ is less than Earned Value $($EV$)$

$5.$ How will you calculate your EAC if the ETC work will be performed at the budgeted rate?

EAC $=$ BAC$/$CPI

EAC $=$ AC $+$ BAC $$ EV

EAC $=$ AC $+$ Bottom$-$up ETC

EAC $=$ AC $+[($BAC $$ EV$)/($CPI x SPI$)]$

$6.$ A project's current total Earned Value $($EV$)$ is $$150,000$ and the Actual Cost $($AC$)$ is $$100,000.$

What is the Cost Variance $($CV$)$ of the project?

CV is $50,000$

CV $=-50,000$

CV is $1\mathrm{.}5$

CV is $-1\mathrm{.}5$

$7.$ A project manager