1- match the following terms?

1.ABC company is considering purchasing a brand new computer to replace the old one. it paid $5000 to purchase the old computer five years ago. in making a decision to purchase a new computer, the old computer is considered a/an

2. in making short-term business decision, fixed cost is generally considered

3.XYZ company is considering buying computer chips instead of making it. it costs XYZ $20/units (including $9 of fixed manufacturing overhead) to make a chip. another company offers to sell the chip for $15 per units. if the company decided to buy the computer it will continue to incur the fixed manufacturing overhead cost. in this case, fixed manufacturing overhead is considered ?

backflush costing ---- relevant ----- accrual basis accounting ------ sunk cost ----- cash basis accounting ------ irrelevant ------ incremental cost

2- Arizona energy company plans to invest $100000 for the next 20 years. which of the following would be useful to calculate the value of the investment at the end of 20 years?

A. Present value of an Annuity of $1

B. future value of $1

the following details are provided by Volvox Foundry Company:

Initial investment $5,000,000

Discount rate 15%

years cash flows

1 $1,250,000

2 $1,350,000

3 $2,400,000

4, $1,150,000

refer to the following table for PV factors

13% 14% 15%

1 0.885 0.877 0.87

2 0.783 0.769 0.756

3 0.693 0.675 0.658

4 0.613 0.592 0.572

What is the NPV of the project?

A. $654,900 negative

B. $590,850 negtive