Investment Appraisal (A Level) (Cambridge (CIE) A Level Business): Exam Questions

Exam code: 9609

2 hours6 questions
1a
1 mark

Read the following extract (Table 1)before answering

Using the data in Table 1, calculate the payback period for the production line project.

1b
3 marks

Read the following extract (Table 1)before answering

Using the data in Table 1, calculate the net present value (NPV) for the production line project.

1c
12 marks

Read the following extract before answering

Using the data in Table 1, calculate the payback period for the production line project.

Evaluate whether DL should go ahead with the proposed production line project.

2a
8 marks

Read the following extract (opens in a new tab)(Tables 2 and 3) before answering

Calculate the:

(i) payback period

[2]

(ii) accounting rate of return (ARR)

[3]

(iii) net present value (NPV).

[3]

2b
12 marks

Read the following extract (opens in a new tab)before answering

You may refer to your answers to (a) and any other information.

Recommend whether FF should invest in buying 3D printers. Justify your recommendation.

3a
6 marks

Read the following extract (Table 2) before answering

Calculate, for the ready meals project, the forecast:

(i) payback period

[3]

(ii) net present value (NPV).

[3]

3b
12 marks

Read the following extract before answering

You may refer to your results from (a) and other information. Recommend whether WSC should proceed with the ready meals project. Justify your recommendation.

4a
4 marks

Read the following extract (Appendix 2) before answering

Calculate the forecast net present value (NPV) of the proposed pizza van project over four years.

4b
4 marks

Read the following extract (Appendix 3) before answering

Calculate the total contribution of one pizza van for 2021.

4c
12 marks

Read the following extract before answering

Refer to your answers to (a) and (b) and any other information. Discuss whether the pizza van project is likely to improve profitability for PAC.

5a
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2 marks

Read the insert (opens in a new tab)before answering this question.

Calculate the average rate of return (ARR) for Project A.

5b
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2 marks

Calculate the payback period for Project B.

5c
12 marks

Evaluate which investment project MT should choose.

6a
2 marks

Read the insert (opens in a new tab)before answering questions 3a, 3b and 3c

Calculate the average rate of return (ARR) for Project A.

6b
2 marks

Calculate the net present value (NPV) for Project B.

6c
12 marks

Evaluate which investment project KB should choose.