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A very large organization is financed by both debt and equity. It evaluates all projects on the basis of their net present value (NPV) using an organization wide weighted average cost of capital as the discount rate.

For a small project, which TWO of the following would affect the project's cash flows AND the discount rate?

Options:

Taxation rates

Inflation rates

Depreciation rates

Changes in working capital

The project's terminal value

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Question 2

Which TWO of the following are examples of management information made possible by the availability of big data?

Options:

Customer profitability analysis to identify key strategic customers

Customer information harvested from social media to target products

Production cycle time analysis to improve production efficiency

Real-time inventory management information shared with producers to influence their production plans

A five year history of a company's aged debtor list to assess the long-run effectiveness of credit control

Question 3

A company has a cost of capital of 12% and a maximum of $20 million to invest. It has identified three possible investment projects, none of which is divisible, as follows.

Which project(s) should the company invest in?

Options:

Project 1 only

Project 2 only

Project 3 only

Projects 1 and 3 only

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