A. Based on the expected value of the net cash inflows, which project should be undertaken?

(A) L

(B) M

(C) N

(D) O

(E) P.

B. The value of perfect information about the state of the market is

(A) Nil

(B) £5,000

(C) £26,000

(D) £40,000

(E) £128,000.

The following data relates to both Questions 42.4 and 42.5. An education authority is considering the implementation of a CCTV (closed circuit television) security system in one of its schools. Details of the proposed project are as follows:

C. The internal rate of return for this project is nearest to

(A) 10.13 per cent

(B) 14.87 per cent

(C) 15.64 per cent

(D) 19.88 per cent

(E) 20.13 per cent.

D. The percentage change in the annual labour cost savings that could occur before the

project ceased to be viable is

(A) 10.50 per cent

(B) 11.73 per cent

(C) 13.13 per cent

(D) 35.20 per cent

(E) 44.00 per cent.