XYZ is considering a project with an annual cash flow of GH 80,000. The project would have a 10-year life, and the company uses a discount rate of 8 percent. (DF@ N=10, 8% = 6.710). What is the maximum amount the company could invest in the project and have the project still be acceptable (rounded)?\

Select one:

a. GH 406,420.

b. GH 800,000.

c. GH 536,800.

d. GH 727,208.

The ABC Company has fixed costs of GH150,000 and variable costs of GH9 per unit. If sales price per unit is GH12, what is break-even sales in cedis?

Select one:

a. GH 600,000.

b. GH 200,000.

c. GH 480,000.

d. GH 450,000.

A division manager is considering a project that requires a significant initial investment. The company's top management will not approve any project that does not return at least 12%. The manager will most likely use which of the following capital investment models?

Select one:

a. payback period.

b. internal rate of return.

c. net present value.

d. accounting rate of return.

Alajo Industries is considering two capital budgeting projects. Project A requires an initial investment of GH 48,000. It is expected to produce net annual cash ows of GH 7,000. Project B requires an initial investment of GH 75,000 and is expected to produce net annual cash ows of GH 12,000. Using the cash payback technique to evaluate the two projects, Alajo Industries should accept:

Select one:

a. Project B because it has a shorter cash payback period.

b. Project A because it requires a smaller initial investment.

c. Project A because it has a shorter cash payback period.

d. Project B because it produces a larger net annual cash ow.