Question 5a
Marking Guide
(a) Mean selling price per unit 0·5
Inflated selling price per unit 1
Inflated revenue 1
Inflated overhead 1
Tax liabilities 1
Timing of tax liabilities 1
Tax-allowable depreciation benefits 1
Scrap value 0·5
Present values of future cash flows 1
Comment on financial acceptability 1
–––
9