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june 2011 q2a

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june 2011 q2a

Please help me if you could clarify my doubt.

the question and the answer can be accessed from the link below.

The answer says:

The Internal Rate of return (IRR)

The IRR is basically the discount rate that produces an NPV of zero for net project cash flows. If the selection is between two projects with the same scale of investment (which is the case here), then it has no effect on which project is selected.

Why is it saying that both the projects have the same scale of investment?

Again it says in the answer:

These intangible benefits amount to $110,000 for Job One and $50,000 for Job Two. If these intangible benefits are deducted from the analysis then, in fact, Job Two has a higher NPV than Job One. However, both are negative, suggesting that neither project should be attempted.

I didn't understand how they get figures $110,00 and $ 50,000.

May 12th 2017 AN ACCA USER 260 Points

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In the same question, if they implement matrix structure. Why they would put one sales guy into the team of event project? it doesnt make any sense to me.

May 12th 2017 AN ACCA USER 260 Points