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Economics, Accounting & Business: Post your doubts here!

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Q28-Examiners report-
Question 28
Candidates were asked to calculate the accounting rate ofreturn in relation to a project. This involved not
only adding up the cash inflows, which was the response most candidates opted for, but deducting the
capital cost; working out the average profit and dividing this by the average investment to calculate a
percentage return
in short u FORGOT DEP
-.- v have to calculate dep for the project?
 
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Yc3sAcc.png

Can someone explain how its C?
O/N/2012 V32
what the hell is this???
 
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Expected cash flow w/o equipment = (180000)
Expected Discounted cash flow when purchased = (65000)

Incremental savings on the negative cash flow = 180 - 65 = $67000 so the ans is C. BY the way Nice pic BRO!
o_O how man ? can u explain the last line again ?
 
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exactly my thought :ROFLMAO:
o_O how man ? can u explain the last line again ?
just think generally, will you buy anything if you know that the cost will be more than before?

No! ryt, so we will calculate the expected gain or decrease in cost as the result of that machine. Real gain will obviously calculated from discounted factor, so difference the cost without the machine and the cost with the machine.
 
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Yea but that difference is supposed to be taken from discounted, not 180 like panorama said.. must be a typo...
 
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hey guys, i need help in question 20 w06 paper 3.
Q. the data relates to two different levels of output in a department:
machine hours: 16000 20000
overheads: 214000 230000
what is the amount of fixed overheads?
 
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hey guys, i need help in question 20 w06 paper 3.
Q. the data relates to two different levels of output in a department:
machine hours: 16000 20000
overheads: 214000 230000
what is the amount of fixed overheads?
Use high low method
change in overhead/change in machine hour

230000 - 214000/20000 - 16000 = $4 <= this is the variable cost
Now to find fixed cost, subtract variable cost.
16000 x 4 = 64000
214000 - 64000 = $150,000
 
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