Anhad is preparing next year’s activity and its particular forecasts intended for the year finished 31 August 2014 will be as follows: 1 . A reduction in selling price per car alarm to RM8 per alarm is usually expected to boost sales volume by 50%.
2 . Materials costs every unit will stay unchanged, but 5% amount discount will be obtained. 3. Hourly immediate wage costs will increase by 10%, yet labour efficiency will be unrevised. 4. Varying selling expenditure will increase as a whole in line with the increase in revenue revenue. five.
Variable creation and circulation overheads increases in line with the 50% increase in sales volume level. 6. Most fixed costs will increase by simply 25%. Satnam Berhad can be considering diversifying their organization activities and perhaps they are currently critiquing two proposals.
Proposal A is to release their own tv set station while Proposal B is a joint venture with Kaboor Limited to release a satellite tv that would allow the Africa region to obtain advertisements for both company’s products. The available data is uses: Estimated existence of the task is 6 years. Increased sales for Satnam Berhad as a result of advertising their products in the African region: RM80 mil in the initially year, growing cumulatively by 20% every year for the following five years.
Funding intended for both assignments would be in a cost of capital of 6%. Relevant discount elements at 6% p. a. are: Yr Cumulative Needed: