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Investment Appraisal · CAPE Management of Business Unit 1

34 past-paper questions on Investment Appraisal, part of Module 3: Business Finance and Accounting, from every CAPE Management of Business Unit 1 paper on Quelpr.

Practise Investment Appraisal
  1. 13(b)3 marks· CAPE Management of Business Unit 1 · 2006 · Paper 1State whether the manager's conclusion is correct and provide a reason based on the IRR values.
  2. 5(a)18 marks· CAPE Management of Business Unit 1 · 2006 · Paper 2Compute the Net Present Value (NPV) of each project using a discount rate of 11%.
  3. 5(b)4 marks· CAPE Management of Business Unit 1 · 2006 · Paper 2Based on the NPV, determine which project the company should invest in and justify your recommendation.
  4. 5(c)3 marks· CAPE Management of Business Unit 1 · 2006 · Paper 2Compare the implication of the NPV of project B and project C.
  5. 5(a)12 marks· CAPE Management of Business Unit 1 · 2007 · Paper 2Show the cumulative cash flow for EACH project.
  6. 5(b)6 marks· CAPE Management of Business Unit 1 · 2007 · Paper 2Compute the payback period in years, to one decimal place, for EACH project.
  7. 5(c)2 marks· CAPE Management of Business Unit 1 · 2007 · Paper 2Indicate which project the company should accept and why based on the payback period.
  8. 5(d)2 marks· CAPE Management of Business Unit 1 · 2007 · Paper 2Outline ONE advantage and ONE disadvantage of using the payback period as a project appraisal criterion.
  9. 5(e)3 marks· CAPE Management of Business Unit 1 · 2007 · Paper 2Assume the IRR [Internal Rates of Return] for the respective projects are: Project A = 11.5%, Project B = 8%, Project C = 15%. Indicate which project the company should accept, giving ONE reason for your choice.
  10. 5(a)21 marks· CAPE Management of Business Unit 1 · 2008 · Paper 2Calculate the payback period and the net present value for EACH project.
  11. 5(b)1 mark· CAPE Management of Business Unit 1 · 2008 · Paper 2Indicate which project the company should invest in, based on the payback method.
  12. 5(c)1 mark· CAPE Management of Business Unit 1 · 2008 · Paper 2Indicate which project the company should NOT consider investing in, using the net present value (NPV).
  13. 5(d)2 marks· CAPE Management of Business Unit 1 · 2008 · Paper 2Outline ONE advantage that the NPV method has over the payback method.
  14. 5(a)13 marks· CAPE Management of Business Unit 1 · 2010 · Paper 2Compute the cumulative cash flow for EACH project.
  15. 5(b)6 marks· CAPE Management of Business Unit 1 · 2010 · Paper 2Compute the payback period, in years, to two decimal places, for EACH project.
  16. 5(c)3 marks· CAPE Management of Business Unit 1 · 2010 · Paper 2Indicate, giving a reason, which project the company should accept based on payback period.
  17. 5(d)3 marks· CAPE Management of Business Unit 1 · 2010 · Paper 2Assume the IRR (Internal Rate of Return) of the projects are: Project A: 11.5%, Project B: 8%, Project C: 15%. Based on the IRR, indicate, giving a reason, which project the company should accept.
  18. 5(a)(i)a)3 marks· CAPE Management of Business Unit 1 · 2012 · Paper 2Calculate the payback period for Project A.
  19. 5(a)(i)b)3 marks· CAPE Management of Business Unit 1 · 2012 · Paper 2Calculate the payback period for Project B.
  20. 5(a)(ii)2 marks· CAPE Management of Business Unit 1 · 2012 · Paper 2Identify the project in which the company should invest based on the payback method, giving ONE reason for your choice.
  21. 5(b)(i)8 marks· CAPE Management of Business Unit 1 · 2012 · Paper 2Calculate the net present value (NPV) for Project A and Project B.
  22. 5(b)(ii)2 marks· CAPE Management of Business Unit 1 · 2012 · Paper 2Identify the project in which the company should invest based on the NPV method, giving ONE reason for your choice.
  23. 5(c)(i)3 marks· CAPE Management of Business Unit 1 · 2012 · Paper 2State TWO advantages and ONE disadvantage of using the NPV method.
  24. 5(c)(ii)3 marks· CAPE Management of Business Unit 1 · 2012 · Paper 2State TWO advantages and ONE disadvantage of using the payback method.
  25. 5(d)1 mark· CAPE Management of Business Unit 1 · 2012 · Paper 2Identify ONE investment appraisal method, other than the net present value and the payback method.
  26. 5(a)(i)6 marks· CAPE Management of Business Unit 1 · 2014 · Paper 2Compute for EACH project the payback period.
  27. 5(a)(ii)9 marks· CAPE Management of Business Unit 1 · 2014 · Paper 2Compute for EACH project the net present value.
  28. 5(b)2 marks· CAPE Management of Business Unit 1 · 2014 · Paper 2Suggest to the company the best investment option based on the net present value method. State a reason to support your answer.
  29. 6(a)2 marks· CAPE Management of Business Unit 1 · 2015 · Paper 2Define the term 'investment'.
  30. 6(b)(i)4 marks· CAPE Management of Business Unit 1 · 2015 · Paper 2State TWO advantages and TWO disadvantages of the payback period method of investment appraisal.
  31. 6(b)(ii)4 marks· CAPE Management of Business Unit 1 · 2015 · Paper 2State TWO advantages and TWO disadvantages of the net present value (NPV) method of investment appraisal.
  32. 6(b)(iii)4 marks· CAPE Management of Business Unit 1 · 2015 · Paper 2State TWO advantages and TWO disadvantages of the average rate of return method of investment appraisal.
  33. 6(c)(i)6 marks· CAPE Management of Business Unit 1 · 2015 · Paper 2Compute the net present value for the project.
  34. 6(c)(ii)5 marks· CAPE Management of Business Unit 1 · 2015 · Paper 2State whether or not Bob's Co Ltd should invest in the project, outlining TWO reasons for your answer.

Related topics in Module 3: Business Finance and Accounting