The following cash flows are forecast for a potential investment project.

The cost of capital for the project is 12% per year and the company uses a straight line depreciation policy.
What is the modified internal rate of return (MIRR) of the project?
Give your answer to the nearest whole percentage.

When considering a capital investment, relevant costs for decision making have which THREE of the following features?

• A. They are committed costs.
• B. They are incremental costs.
• C. They are future costs.
• D. They are unavoidable costs.
• E. They are cash flows.

K Supermarket spends $80,000 per year on checking and processing receipts of inventory. Annual warehouse costs are a further $70,000 per year. These costs are currently treated as fixed overheads in the company's costing system.
As an experiment, the company is preparing a direct profitability analysis of a small range of products, including fresh grapes.
K Supermarket receives a total of 3,600 deliveries every year. 20% of these deliveries are of perishable goods such as grapes. It takes twice as long to process a delivery of perishable goods compared to a normal delivery because perishable goods have to be checked more carefully.
Half of the warehouse costs are for the chilled store that is used to store perishable goods. At any time, the chilled store has 800 kilos of perishable goods in stock.
K Supermarket receives 150 deliveries of grapes every year. Each delivery is for 100 kilos of grapes. The grapes spend an average of two days in the chilled store before they are sold.
Calculate the total cost per kilo of checking, processing and storing grapes that should be taken into account in determining the profitability of grapes.
Give your answer to the nearest whole cent.

A manufacturing company has recently introduced a Total Quality Management (TQM) system. The company has invested heavily in the education and training of its staff, in addition to implementing new product design engineering. There is a plan to sample units from each batch of products manufactured to test for errors, although this has not yet been implemented due to budget constraints.
The company is experiencing high levels of customer complaints, with many faulty units being returned by the customer for refund or replacement. Sales revenue has fallen recently, mainly due to negative press coverage linked to dissatisfied customers.
Select the statement MOST likely to apply.

• A. The high level of internal failure costs is the result of a lack of expenditure on prevention costs.
• B. The high level of internal failure costs is the result of a lack of expenditure on appraisal costs.
• C. The high level of external failure costs is the result of a lack of expenditure on prevention costs.
• D. The high level of external failure costs is the result of a lack of expenditure on appraisal costs.