Question
23/6 Stanley plc is about to undertake a project requiring an investment of 610,000 to generate equal annual inflows of 122,000 in perpetuity If the
23/6 Stanley plc is about to undertake a project requiring an investment of 610,000 to generate equal annual inflows of 122,000 in perpetuity
If the first inflow from the investment is in one year's time, what is the Internal Rate of Return (IRR) of the project?
- 20%
- 25%
- 400%
- 500%
16.6 Which two of the following statements are characteristics of a rolling budget?
A. All activities are re-evaluated each time a budget is formulated
B. Updates to the annual budget are made when significant changes are foreseen
C. A new accounting period is added as the old one expires
D. The budget is more realistic as there is a short period between preparation of budgets
E New accounting periods are only added at the end of the financial year
17.6 The high-low method of cost estimation is useful for:
A. predicting the range of costs expected in the budget period
B. estimating the budgeted cost for the actual activity level
C. estimating the lowest and highest costs in the budget period
D. predicting the actual cost for a range of activity levels
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