1. (a) A machine which initially cost '45,000 has an expected existence of 8 years and is devalued at the pace of '2400 every year. It has been unused for quite a while, nonetheless, true to form creation orders didn't emerge. A unique request has now been gotten which would require the utilization of the machine for a very long time.

The current net feasible worth of the machine is '9,000. On the off chance that it is utilized for the work, its worth is required to tumble to '4,500. The net book worth of the machine is '3,400. Routine upkeep of the machine at present costs '20 every month. With use, the expense of support and fixes would increment to '70 every month.

What might be the significant expense of utilizing the machine for the request with the goal that it very well may be charged as the base cost for the request?

(b) NICK Ltd. has been drawn nearer by a client who might want an extraordinary task to be accomplished for him and will pay '42,000 for it. The work would require the accompanying materials:

Material Total units required Units effectively in stock Book worth of units in stock

'/unit Realisable worth

'/unit Replacement cost

'/unit

A 1,000 0 6

Dynamic utilizing Cost Ideas and CVP Analysis 2.15

B C

D 1,000

1,000

200 600

700

200 2

3

4 2.5

2.5

6 5

4

9

(i) Material B is utilized consistently by Scratch Ltd. also, if stocks are needed for this work, they would should be supplanted to satisfy other creation need.

(ii) Materials C and D are in stocks because of past overabundance buy and they have limited use. No other use could be found for material C however material D could be utilized in another work an alternative for 300 units of material E which presently costs '5 for every unit (of which the organization has no units in stock right now).

What are the significant expenses of material, in choosing whether or not to acknowledge the agreement? Expect any remaining costs on this agreement to be extraordinarily brought about other than the significant expense of material is '550.

2. Walter's Model recommends for 100% DP Proportion when

(a) ke = r

(b) ke < r

(c) ke > r

(d) ke = 0

3. In the event that a firm has ke > r the Walter's Model recommends for

(a) 0% payout

(b) 100% Payout

(c) half Payout

(d)25% Payout

4. Walter's Model proposes that a firm can generally increment for example of the offer by

(a) Expanding Profit

(b) Diminishing Profit,

(c) Steady Profit

(d) Nothing from what was just mentioned

5. 'Bird close by' contention is given by

(a) Walker's Model

(b) Gordon's Model

(c)MM Mode

(d) Residuals Hypothesis

6. Residuals Hypothesis contends that profit is a

(a) Important Choice

(b) Dynamic Choice

(c) Detached Choice

(d) Insignificant Choice

7. Profit insignificance contention of MM Model depends on:

(a) Issue of Debentures

(b) Issue of Reward Offer,

(c) Exchange

(d) Supporting

8. Which of coming up next isn't valid for MM Model?

(a) Offer cost goes up if profit is paid

(b) Offer cost goes down if profit isn't paid,

(c) Market esteem is unaffected by Profit strategy,

(d) The entirety of the abovementioned

9. Which of the accompanying weights on financial backer's inclination reorient profit than higher

future capital additions ?

(a)Walter's Model

(b) Residuals Hypothesis

(c) Gordon's Model

(d) MM Model

10. MM Model of Profit immateriality utilizes exchange between

(a)Dividend and Reward

(b)Dividend and Capital Issue

(c)Profit and Speculation

(d)None of the abovementioned