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I choose the same, the reason being they needed to embrace risk and adopt a Maximax approach, meaning they were optimistic about demand being the best case scenario i.e. 1200, and then choose the most favourable outcome out of those possible values – i.e. the one with the lowest variable cost and high contribution which was the very first option on the table from memory.
@sanjanapaul1234 said:
Q3B- Which selling price did you guys select? That Risk seeking question where multiple variable costs and contribution were provided? I wrote $75 selling price and $50 Variable cost when the demand is 1200 units so as to capture the market by selling most units. Am I correct?I found the exam ok but not sure if I took the correct approach:
1a, I spoke to PTESTEL to asses our current position in relation to each of these points, I.e. how much of our success was due to our position. Spending more time on economy and technology.
1b. I spoke to the difference of Veerlandia to Deerland in relation to PESTEL in point 1. I then spoke to each assumption in the NPV in terms of sensitivity analysis and questioned our structure and challenged each assumption. ( I assume this is why they provided an NPV).
2a. Media release basically spoke to all the facts and HiLite’s current commitments subtly refuting all the comments in the Daily Mail article.
2b. Integrated reporting spoke to how it would help the organisation convey its position to all stakeholders, and would also minimise bad press in the future etc, Also how it may be perceived in the investment community. I spoke to environmental reporting standards etc.
3a. I spoke to the importance and reach of technology and spoke about either becoming a Cost leader or a differentiator. I spoke to the power of technological disruption
3b. I prepared slides with the risk, causes, possible outcomes, and suggested controls that may be in place, I spoke how the probability of the risk and the severity of the outcome too.
I ran out of time in question 3 but I am hoping that I’ve scored enough points to pass comfortably.
Let me know if you think any of these are well off the mark.
