YHJ is considering an investment in a project that will cost $20 million. Annual fixed costs will be $12 million per year, excluding depreciation. Annual sales are forecast at 5 million units, with a contribution per unit of
$8. After five years the equipment will be worn out and YHJ will have to spend $50 million on disposal costs.
The discount rate is 10%.
Calculate the sensitivity of the net present value of this project to a 20% increase in the disposal costs.

• A. 20%
• B. 31%
• C. 11%
• D. 13%

Which of the following is the major advantage of Cloud storage for an enterprise?

• A. Sharing storage space with others
• B. The enterprise has complete control over it
• C. in-house staff are not required to maintain the infrastructure
• D. It provides unlimited free use for the enterprise

M, a manufacturing company, has had some problems with defects in one of the main products it produces.
This product has been made by the company for many years and is very profitable. Last month it had over 300 defects reported by customers which is more than 15% of products sold. This is a reputation risk for M and is also affecting profitability.
Which of the following controls could M introduce to reduce defects and also increase profitability?

• A. The production director could examine one in every 10 products and sign a form to say they are satisfactory.
• B. M could increase the number of quality control staff.
• C. M could introduce a procedure where quality control staff sign a form at the end of each day to say they have examined 1 in 10 products for defects and they are satisfied with the quality.
• D. M could check all employees qualifications to ensure they are qualified for their jobs.
• E. M could service machinery at least once a month as recommended by the machinery supplier.

W is a construction company which undertakes large projects for governments and other clients worldwide.
Following extensive tendering processes, contracts are issued for successful tenders, and projects typically take three to five years to complete. Contracts are normally fixed-price and many have considerable penalty clauses.
Which of the following would be appropriate policies and controls for W to implement?

• A. In order to ensure the maximum chance of winning the contract, tenders always commit W to completing the work at the lowest possible price and in the shortest possible time.
• B. Unsuccessful tenders should be analysed to establish the cause of them failing to be awarded the work and help to avoid future failures.
• C. Ensuring that the minimum legal wage is paid to all workers on the construction sites.
• D. Contract terms should be worded precisely so that additional work is not deemed to form part of the contract.
• E. Ensuring a consistent separation of duties between those involved in the preparation of tenders and those involved in the planning of projects.
• F. The project steering committee and project board should receive regular project status reports.