Question
3. Consider the following statements made by a production manager: 1. Favourable variances are always good for an organisation 2. Appropriate variance reporting is
3. Consider the following statements made by a production manager: 1. Favourable variances are always good for an organisation 2. Appropriate variance reporting is the comparison of actual results with a flexed budget Which of the following is correct as regards these statements? A. Both statements are correct B. Both statements are incorrect C. Statement 1 only is correct D. Statement 2 only is correct 4. A project has a normal pattern of cash flows (ie, an initial outflow followed by several years of inflows) What would be the effects on the Internal Rate of Return (IRR) of the project and its Discounted Payback Period (DPP) of a decrease A. IRR increase; B. IRR increase; - C. IRR - no change; D. IRR no change; - DPP - decrease DPP increase DPP increase DPP decrease
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