Free sample questions from Business Analysis Mathematics 9 12345 Created by aboozarkordi Free sample questions from Business Analysis Mathematics 1 / 5 1. Suppose that you are willing to pay $50 to see a movie on Saturday night. A ticket costs $15, and the next-best alternative use of your time would be to go to a concert which costs $80 and you value at $100. The opportunity cost of seeing the movie is equal to: A) $70 B) $20 C) $15 D) $100 2 / 5 2. Lamp Lighting produces lamps from bought in parts. The variable cost of each lamp comprises of direct materials of £6.00, labour costs of £10.00 and variable overheads of £2.00. Lamp Lighting has fixed overheads of £180,000 and sells its lamps for £30 each. Current sales are 20,000 lamps per annum and the break-even point is 15,000 lamps. What profit would Lamp Lighting make if the company sold 25,000 lamps? A) £240,000 B) £120,000 C) £150,000 D) £300,000 Check your calculations again. Remember that the profit at any given level of sales is calculated as (projected sales units – break-even sales units) x contribution per unit. In this case, contribution per unit is £30 selling price – £6 direct materials – £10 labour costs – £2 variable overheads = £12. Projected sales are 25,000 lamps while break-even point is when sales of 15,000 lamps are made. The profit that Lamp Lighting will make from sales of 25,000 lamps is thus (25,000 projected sales units – 15,000 break-even sales units) x £12 contribution per lamp sold = £120,000. 3 / 5 3. If an initial investment is $765000, the payback period is 4.5 years, then increase in future cash flow will be A) $6,442,500 B) $170,000 C) $5,645,000 D) $5,442,500 Payback Period = Initial investment / Cash flow per year 765000/4.5=170,000 4 / 5 4. Which solution should be chosen according to the completed weighted-ranking matrix? A) Option A B) Option D C) Option C D) Option B 5 / 5 5. What is the present value of £520,000 expected to be received in three years’ time, if the business concerned requires a return of 10% on sums invested? Answers are given to the nearest £’000. A) £432k B) £473k C) £692k D) £390k Present value = £520k x 0.75 = £390k Your score is LinkedIn Facebook Twitter VKontakte Restart quiz
