1-Parker Plumbing has received a special one-time order for 1,600 faucets (units) at $5 per unit. Parker currently produces and sells 6,500 units at $6.0 each. This level represents 75% of its capacity. Production costs for these units are $4.5 per unit, which includes $3 variable cost and $1.5 fixed cost. To produce the special order, a new machine needs to be purchased at a cost of $2,000 with a zero salvage value. Management expects no other changes in costs as a result of the additional production.

If Parker wishes to earn $1,600 on the special order, the size of the order would need to be:

A)4,800 units.

B)800 units.

C)1,800 units.

D)3,600 units.

E)320 units.

2. A given project requires a $66,000 investment and is expected to generate end-of-period annual cash inflows as follows:

Year 1	Year 2	Year 3
$28,000	$29,000	$28,000

Assuming a discount rate of 10%, what is the net present value of this investment? Selected present value factors for a single sum are shown in the table below:

i = 10%	i = 10%	i = 10%
n = 1	n = 2	n = 3
0.9091	0.8264	0.7513

A. $4,458

B. ($49,587)

C. $0

D. ($23,967)

E. $70,458

3. A given project requires a $46,500 investment and is expected to generate end-of-period annual cash inflows of $21,000 for each of three years. Assuming a discount rate of 10%, what is the net present value of this investment? Selected present value factors for a single sum are shown in the table below:

A. $6,550

B. $0

C. $52,224

D. ($19,091)

E. $5,724

i = 10%	i = 10%	i = 10%
n = 1	n = 2	n = 3
0.9091	0.8264	0.7513