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June 2008 Q4 (b)(ii)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA APM Exams › June 2008 Q4 (b)(ii)

  • This topic has 2 replies, 2 voices, and was last updated 12 years ago by peilin.
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  • Author
    Posts
  • October 24, 2012 at 1:48 am #54836
    peilin
    Member
    • Topics: 8
    • Replies: 19
    • ☆

    Hi,

    Can you please explain how to get the “4,9 & 5”?
    The formula given in the answer for calculating the increase in the contribution to sales ratio (%) is as follow :-

    (4 x X x 0.893)+(9 x X x 0.797)+(5 x X x 0.712) = 0.426932

    Thanks very much!

    October 25, 2012 at 2:47 pm #105959
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10594
    • ☆☆☆☆☆

    Everything in this line is in $ millions:

    (4 x X x 0·893) + (9 x X x 0·797) + (5 x X x 0·712) = 0·426932

    2009 sales are 80,000 x 50 = 4 million (hence the 4)
    2010 sales are 180,000 x 50 = 9 million (hence the 9)
    2011 sales are 100,000 x 50 = 5 million hence the 5)

    The increase in c/s ratio, X, must be enough to eliminate the current negative NPV of 426932.

    October 26, 2012 at 2:39 am #105960
    peilin
    Member
    • Topics: 8
    • Replies: 19
    • ☆

    Thank you!

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    Posts
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