itexam/boardqu ry bo ardqueryJsd ?student Keys 1555 852&g; sim d-C59559&s; mid-C

Question

itexam/boardqu ry bo ardqueryJsd ?student Keys 1555 852&g; sim d-C59559&s; mid-C93306&round-4-Go; -- studentexam/boardquery/boardquery _js.cfm?studentKey 15558528gsimid C59559&simid; C933068round COMPXm INQUIRER comp xM Exam Points: 10 2006 Capsim Management Simulations, Inc. Investing S200 000 n Tors Channel Support Systems % in this and in all future rounds. (Refer to the TQM Initiative worksheet in the CompXM Decisions menu.) Looking at the Round O Inqurerfor Andrews last years sales were S 163290917 Assuming sm ar sales next year he 3 % increase in dem and will provide $4,898,727 of additional revenue. With the overall contribution mar will add $1,670,466 to the bottom line. For simplicity, assume that the demand increase and margins will remain at last year's initiative will at a minimum increase demand for your products 3 gin of 34 1% after direct costs this revenue How long w take to achieve payback on the intial S2000 000 TOM investment, rounded to the nearest month? Select. 1 Save Answer 14 months TQM investment will not have a significant financial impact 10 months 5 months USA and Canaca 577-477 0787 (0thers 1-312-477

Explanation / Answer

payback period =Initial cost /annual cash flow

          = 2,000,000/ 1,670,466

          = 1.20 years [rounded to 2decimal place)

**1 means 1 year in total = 12 months

    .20 means =2 months

Total = 12+2 = 14 months

correct otpion is "A"

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