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ScotlandAccountingQuick questions
Preparing Management Accounting Information
Quick questions on Capital investment appraisal - SQA Higher Accounting
3short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is q1?Show answer
A project costs £60,000 with inflows of £20,000 a year. Calculate the payback period. [2 marks]
What is q2?Show answer
Average annual profit is £8,000 and average investment is £40,000. Calculate the ARR. [2 marks]
What is q3?Show answer
State one limitation shared by both payback and ARR. [1 mark]
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