1) Co. X has gathered the following estimates:

Machine A

Machine B

Cost

$600,000

$600,000

Life

5 yrs

5 yrs

Net Cash Inflow:

Yr 1

$100,000

$500,000

Yr 2

$200,000

$400,000

Yr 3

$300,000

$300,000

Yr 4

$400,000

$200,000

Yr 5

$500,000

$100,000

Co. X uses the net present value method to evaluate capital expenditures. Which of the following two machines has the higher net present value?

2) Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During November, they incurred joint processing costs of $420,000. Production and sales value information for November are as follows:

Product

Cases

Selling Price/Case

Additional Costs/Case

Catsup

100,000

$10

$2

Tomato Juice

150,000

$8

$1

Canned Tomatoes

250,000

$12

$3

The joint cost allocated to Canned Tomatoes (using the net realizable value method) is (round to the closest $)

3) Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During November, they incurred joint processing costs of $420,000. Production and sales value information for November are as follows:

Product

Cases

Selling Price/Case

Additional Costs/Case

Catsup

100,000

$10

$2

Tomato Juice

150,000

$8

$1

Canned Tomatoes

250,000

$12

$3

Red Sauce Canning Company is considering an option to further refine Catsup. By incurring an additional cost of $60,000, they will be able to increase their selling price of Catsup to $11.20 per case. Determine the incremental advantage (disadvantage) of this option? (round to the closest $)

Question 15 options:

($60,000)

$60,000

$260,000

($260,000)

4) Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During November, they incurred joint processing costs of $420,000. Production and sales value information for November are as follows:

Product

Cases

Selling Price/Case

Additional Costs/Case

Catsup

100,000

$10

$2

Tomato Juice

150,000

$8

$1

Canned Tomatoes

250,000

$12

$3

If the company has a philosophy of marking up their products 20% over cost, the selling price per case of Tomato Juice should be (using the net realizable value method) (round to 2 decimal places)