13) Spring Corp. has two divisions, Daffodil and Tulip. Daffodil produces Tulip could use in its production. Tulip currently purchases 1 on the 00,000 gadgets for $12.50 e open market. Daffodil's variable costs are $6 per widget while the full cost is $9.35. Daffodil sells gadgets for $13 each. If Daffodil is operating at capacity, what would be the minimum transfer price Daffodil would accept for an internal transfer? D) S6.00 A) S13.00 B) $9.35 C) S12.50 14) Palmer Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $100,000. The equipment will have an initial cost of $400,000 and have a 7-year life. If the salvage value of the equipment is estimated to be $75,000, what is the accounting rate of return? A) 147.37% B) 25.00% c) 42.11% D) 14.28% 15) Nelson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $100,000. The equipment will have an initial cost of $400,000 and have a 5-year life. If the salvage value of the equipment is estimated to be $75,000, what is the payback period? Ignore income taxes. A) 7.00 years B) 3.25 years C) 4.75 years D) 4.00 years 16) The minimum required rate of return for a project is the: A) internal rate of return. C) accounting rate of return. B) hurdle rate. D) annual rate of return. 17) When making screening decisions using the net present value method, a project is acceptable if A) the NPV is positive. B) the NPV is negative. C) the NPV is greater than the hurdle rate. D) the NPV is greater than the IRR. 18) Byron Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $100,000. The equipment will have an initial cost of $400,000 and have a 5-year life. The salvage value of the equipment is estimated to be S75,000. If the hurdle rate is l 5%, what is the approximate net present value? Ignore income taxes. A) Positive $400,000 C) Positive $75,000 B) Zero D) Negative $27,490