Oak plc is considering a project that has the following predicted revenue and expenses in its first year: £000 140 Revenue Salaries (sunk costs - incurred whether or not the project proceeds) (40) Depreciation Other overheads (30) (20) 50 Profit Notes: 1. 'Other overheads' contain £8,000 which represents a fair share of the overheads for the business as a whole. 2. If the project is not undertaken, part of the factory would be freed up and could be sub-let for £15,000 per year. 3. The business employs net present value analysis to appraise its projects. O A. £113,000 B. £111,000 C. £95,000 D. £86,000

Oak plc is considering a project that has the following predicted revenue and expenses in its first year: £000 140 Revenue Salaries (sunk costs - incurred whether or not the project proceeds) (40) Depreciation Other overheads (30) (20) 50 Profit Notes: 1. 'Other overheads' contain £8,000 which represents a fair share of the overheads for the business as a whole. 2. If the project is not undertaken, part of the factory would be freed up and could be sub-let for £15,000 per year. 3. The business employs net present value analysis to appraise its projects. O A. £113,000 B. £111,000 C. £95,000 D. £86,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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