1. The following information is for X Company's two products - A and B:

Product A Product B

Sales $87,000 $94,000

Total contribution margin 34,800 37,600

Fixed costs:

Avoidable 20,000 27,500

Unavoidable 8,000 30,000

Profit $6,800 $-19,900

The company is considering dropping Product B because of the $19,900 loss. If X Company drops Product B, it will use the freed-up resources to increase sales of Product A by $19,000. If X Company drops Product B and increases sales of A, firm profits will change by

2. X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $66,000 per year; operating costs with the new machine are expected to be $41,000 per year. The new machine will cost $65,000 and will last for 5 years, at which time it can be sold for $1,000. The current machine will also last for 5 more years but will have zero salvage value. Its current disposal value is $8,000. Assuming a discount rate of 6%, what is the difference between the net present value if X Company replaces the current machine and the net present value if it keeps the current machine?

3. X Company, a merchandising company, had the following transactions during the year:

1. Received $8,637 in cash contributions from the owners.

2. Purchased $8,147 worth of merchandise on account from suppliers.

3. Sold merchandise on account to customers for $12,113; the merchandise cost X Company $7,268.

4. Paid $3,629 to suppliers for merchandise that X Company had previously purchased on account.

5. Collected $3,681 from customers who had previously purchased merchandise on account.

6. Bought equipment for $10,195 with a down payment of $5,664 and a $4,531 loan from the bank.

7. Paid wages of $1,135.

8. Recognized the expiration of $511 of prepaid rent.

Total assets at the beginning of the year were $11,602. What were total assets at the end of the year?