11. A company is planning to purchase a machine that will cost $35,000, have a seven-year life, and be depreciated using the straight-line method with no salvage value. The company expects to sell the machine's output of 4,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below: Sales Costs Manufacturing Depreciation on machine $119,000 $68,000 5,000 Selling and administrative expenses 40,000 113000 Income before taxes Income tax (50%) Net income $6,000 (3,000) $3,000 What is the payback period for this machine? a) 17.50 years b) 4.375 years c) 5.00 years d) 1.00 year e) 11.67 years 12. A company expects to produce and sell 20,000 units of a single product. Management desires a 22% return on assets of $3,000,000. The following additional company information is available Variable costs (per unit) Production costs Nonproduction costs $105 $9 Fixed costs (in total) Overhead Nonproduction $350,000 $120,000 Compute selling price per unit given that markup percentage equals desired profit divided by total costs a) $137.50 b) $33.00 c) $170.50 d) $114.00 e) $122.50 13. Assume Company A sells its merchandise at $50 per unit. It has variable costs of $45 per unit, and fixed costs of $100,000. What is the breakeven point in dollars? a) 20,000 b) 100,000 c) 500,000 d) 700,000 e) 1,000,000