A machine has an investment cost of $60,000 at time 0. The present values (at time 0) of the expected net cash inflows from the machine over its useful life are：
Discount rate Present value of cash inflows
10% $64,600
15% $58,200
20% $52,100
What is the internal rate of return (IRR) of the machine investment?
$
Investment (60,000)
PV of cash inflow 64,600
NPV @ 10% 4,600
$
Investment (60,000)
PV of cash inflow 58,200
NPV @ 15% (1,800)
The IRR of the machine investment is therefore between 10% and 15% because the NPV falls from $4,600 at 10% to -$1,800 at 15%. Therefore at some point between 10% and 15% the NPV = 0. When the NPV = 0, the internal rate of return is reached.
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Which of the following statements about management accounting information is/are true?
(i) They must be stated in purely monetary terms.
(ii) Limited companies must, by law, prepare management accounts.
(iii) They serve as a future planning tool and are not used as an historical record.
Which of the following statements is/are correct?
(i) A management control system is a term used to describe the hardware and software used to drive a database system which produces information outputs that are easily assimilated by management.
(ii) An objective is a course of action that an organisation might pursue in order to achieve its strategy.
(iii) Information is data that has been processed into a form meaningful to the recipient.
Good information should have certain qualities. Which of the following are qualities of good information?(i) Complete(ii) Extensive(iii) Relevant(iv) Accurate
Monthly variance reports are an example of which one of the following types of management information?
Which of the following statements is/are correct?
(i) Information for decision-making should incorporate uncertainty in some way
(ii) The data used to prepare financial accounts and management accounts are the
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