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Strategic
Cost Management
1. Band-Box is considering the purchase of a new wash and dry equipment
in order to expand its operations. Two types of options are available: a
low-speed system (LSS) with a Rs 20,000 initial cost and a high speed system
(HSS) with an initial cost of Rs 30,000. Each system has a fifteen year life
and no salvage value. The net cash flows after taxes (CFAT) associated with
each investment proposal are:
Low speed system (LSS) High speed system (HSS)
CFAT for years 1 through 15 Rs 4,000 Rs 6,000
Which speed system should be chosen by Band-Box, assuming 14 per cent
cost of capital? (10 Marks)
2. Product Life Cycle is an important concept
while conceiving any idea related to a new product. What are the
characteristics of Product Life Cycle? (10
Marks)
3. A) A startup company has opted for low cost
provider strategy for pricing its products. You are requested to enumerate the
downside of such a strategy. (5 Marks)
3. B) Activity based management information has
a high positive impact on management decision making. List down the management
decision areas that have been benefitted by activity based management
technique. (5 Marks)
Assignment Solutions, Case study Answer sheets
Project Report and Thesis - Contact
www.mbacasestudyanswers.com
ARAVIND – 09901366442 – 09902787224
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