Please complete all questions on workbook

Cover Sheet
        FNSACC501 –
        Provide financial and business
        performance information Workplace simulation
    Student Details
    Name: _____________________________________________________________
    TAFE ID: __________________________________________________________
    Address: ___________________________________________________________
    ___________________________________________________________________ State: __________________________ Postcode: __________________________
    Question     Unit of competency     Topic     Possible Mark
    1    FNSACC501/1,2,3     Accounting Rate of Return     16
    2    FNSACC501/1, 2, 3     Payback     10
    3    FNSACC501/1, 2, 3     Investment Appraisal     33
    4    FNSACC501/1, 2, 3     Ratio Analysis     10
    5    FNSACC501/1, 2, 3     Economic Order Quantity    10
    6    FNSACC501/1, 2, 3     Multiple Choice     21
                100
Question 1
    Question 1 - Must show calculations
    Potato is considering two mutually exclusive projects. Both of the projects have a life of six years.
    Project Tom will cost $250,000 and have a residual value of $50,000. Project Jerry will cost $180,000 and have No residual at the end of its useful life.
    The Expected minimum return is 10%. The After Tax Cash Flows from each project are as follows.
    Y ears     Project Tom     Project Jerry
        $     $
    1    25,000    70,000
    2    20,000    50,000
    3    28,000    80,000
    4    45,000    25,000
    5    90,000    35,000
    6    60,000    40,000
    a. Calculate the Accounting Rate of Return based on Average Investment for each Project?
    b. Calculate the Accounting Rate of Return based on Average Investment for each Project?
    Calculating the depreciation per year
    Project Tom:
    Depreciation =    (250000-50000)/6
    =    33333
    Project Jerry
    Depreciation =    180000/6
    =    30000
    Calcualting average income
    Y ears     Project Tom     Project Jerry
    1    58,333    100,000
    2    53,333    80,000
    3    61,333    110,000
    4    78,333    55,000
    5    123,333    65,000
    6    93,333    70,000
    Average income    78,000    80,000
    Average investment    150000    90000
    ARR    52.00%    88.89%
Question 2
    Question 2 Must show calculations
    Kate is considering the Purchase of a Machine that has a cost of $70,000.
    The...