A company is considering the use of Material V in a special order.
The material is used regularly and a sufficient quantity of the material is in inventory.
It could also be sold, at just below the current market price, to a local competitor.
What is the relevant cost of Material V to be used in the special contract?
Which of the following are examples of feedforward control?
Select ALL that apply.
A musical instrument manufacturing company is considering a new project that will require 1000 kg of wood. They have 700 kgs of wood in stock which was purchased last year for 4 per kg. The wood in stock can be sold back to the supplier for 5 per kg. The wood in stock will have to be replaced if it is used. The current purchase price of wood is 8 per kg.
Using this information, what is the relevant cost of wood for the manufacturers decision on this project?
A company's management is considering investing in a project with an expected life of 4 years. It has a positive net present value of $180,000 when cash flows are discounted at 8% per annum. The project's cash flows include a cash outflow of $100,000 for each of the four years. No tax is payable on projects of this type.
The percentage increase in the annual cash outflow that would cause the company's management to reject the project from a financial perspective is, to the nearest 0.1%:
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