15. A project needs an investment in machinery of 160,000. The project cash flows over its four year life are predicted as t1 20,000 12 50,000 t3 90,000 t4 120,000 The company uses the straight line method of depreciation. After four years the project will be complete and the machinery will be sold for 40,000. Which of the following is the average Accounting Rate of Return (ARR) for the project, based on the initial investment? OA. 18.75% OB. 25.00% OC. 33.33% OD. 43.75% 16. A project has an initial cash outflow followed by three annual positive cash inflows and has a payback period of two years. What is the validity of the following statements? (1) The project always has a unique Internal Rate of Return (IRR) (2) If the Internal Rate of Return (IRR) is less than the cost of capital then the project has a positive Net Present Value (NPV) at the cost of capital Statement (1) OA. True OB. True OC. OD. False False Statement (2) True False True False 17. The management accountant of Caligula has calculated the number of units her firm needs to manufacture and sell to break even from the following data. Selling price per unit Variable cost per unit Fixed overheads 40 16 158,208 It is now expected that the product's variable cost and selling price will increase by 5.2% and 8.0% respectively. Which of the following will happen to the number of units Caligula needs to break even? OA. Fall by 2.8% OB. Rise by 2.8% OC. Fall by 9.0% OD. Rise by 9.0%