Prepare a correct statement of the incremental cash flows arising from the project.

1 (a) Prepare a correct statement of the incremental cash flows arising from the project.
(b) Calculate:
(i) The project payback period.
(ii) The project net present value
(c) Write a memo to the board advising on the acceptance or rejection of the project.

2 (a) Identify and discuss the major factors that a bank would take into account before deciding whether to grant an increase in the overdraft of a business.
(b) State whether, in opinion, the bank should grant the required increase in the overdraft for Gainsborough Fashions Ltd.

3 (a) Show the managing director, by using the data given, the calculation ratios that could be used to measure inventories and trade receivables levels during last year and this year.
(b) Discuss the ways in which the management of Sparkrite Ltd could exercise control over
(i) inventories levels;
(ii) Trade receivables levels.

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