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    Capital Budgeting, Variances

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    The Directors of Bejham Ltd. Plan to introduce a new product... (see attachment)


    (a) Calculate for the new product:
    i. net present value (NPV)
    ii. internal rate of return (IRR)
    iii. accounting rate of return (ARR)

    (b) Prepare Manufacturing, Trading and Profit and Loss Accounts in as much deatil as possible to show the product's budgeted additional annual profit {see attachment for further details}

    (c) Calculate the following variances:
    i. direct materials usage
    ii. direct materials price
    iii. direct labour efficiency
    iv. direct labour rate

    **Please see attachment for additional company/product info

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    Solution Summary

    Calculates net present value, internal rate of return, accounting rate of return, direct materials usage variance, direct materials price variance, direct labour efficiency variance, direct labour rate variance. Prepares Manufacturing. Trading and Profit and Loss Accounts.