Calculate the profitability of the following proposal using Return on investment method

Proposal I

Automatic machine

Cost

320000

Estimated life

6.5 years

Estimated sales p.a

160000

Cost : Material

60000

Labor

22000

Variable overheads

14000

a.

16.53%

b.

4.62%

c.

All the options are wrong

d.

3.42%

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Given the following data; TOTAL SALES OMR 250000 CASH SALES OMR 125000 SALES RETURN OMR 5000 OPENING SUNDRY DEBTORS OMR 20000 CLOSING SUNDRY DEBTORS OMR 10000 What will be the average debtors?

a.

OMR 15000

b.

OMR 7500

c.

OMR 10000

d.

OMR 30000

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The total investment required for two projects are estimated at OMR100, 000. The cash flows expected from the two projects for the first four years are explained in the table below. Year Project A Year 1 18,000 Year 2 28,500 Year 3 42,000 Year 4 48,000 What will be pay back period?

a.

2.86

b.

All the options are wrong

c.

3.23

d.

3.03

e.

2.63

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Given the following data; TOTAL PURCHASES- OMR 150000 CASH PURCHASES - OMR 45000 PURCHASE RETURN - OMR 5000 OPENING CREDITORS- OMR 30000 CLOSING CREDITORS - OMR 20000 What will be the amount of Average creditors?

a.

OMR 25000

b.

OMR 30000

c.

OMR 35000

d.

OMR 50000

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Akkudu Ltd. is a manufacturing company that produces electronic gadgets in bulk quantities for its customers in Oman. The company was able to sustain a reasonable amount of sales in the last two quarters despite the pandemic-crisis during the last year. However, the company has faced some serious liquidity problems due to delayed payment by the customers and lower sales in the first two quarters. Hence, the company is seriously thinking about revising its working capital standards by considering the changes in the market. The finance manager of the company is seeking your help in assessing the average payment period from the following financial data.

During the last year the company started its operations with an opening stock of OMR 22,000 and made a purchase of 50,000 OMR. The company has returned OMR 5000 worth material due to quality issues. During the last year, the business has paid OMR 6000 as wages. The company sold goods for a total amount of OMR 80,000 of which OMR 50,000 sales was on cash basis. Average debtors during the last year was 10,000 OMR, average creditors were 15,000 OMR and closing inventory was OMR 20,000.

Choose the average payment period of Akkudu Ltd. from the following?

a.

140.059

b.

121.67

c.

101.253

d.

110.253