1.Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.):

Investment required in equipment	$ 30,000
Annual cash inflows	$ 6,000
Salvage value of equipment	$ 0
Life of the investment	15	years
Required rate of return	10%

Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided.

The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.

The net present value of the investment is:

• $15,636

• $24,000

• $45,636

• $60,000

2.

Eagleson Company's quality cost report is to be based on the following data:

Net cost of scrap	$ 75,000
Liability arising from defective products	$ 32,000
Warranty repairs and replacements	$ 80,000
Re-entering data because of keying errors	$ 75,000
Supplies used in testing and inspection	$ 18,000
Quality data gathering, analysis, and reporting	$ 62,000
Final product testing and inspection	$ 21,000
Test and inspection of in-process goods	$ 44,000
Systems development	$ 45,000

What would be the total prevention cost appearing on the quality cost report?

Multiple Choice

• $107,000

• $125,000

• $84,000

• $89,000

3.

Eagleson Company's quality cost report is to be based on the following data:

Net cost of scrap	$ 75,000
Liability arising from defective products	$ 32,000
Warranty repairs and replacements	$ 80,000
Re-entering data because of keying errors	$ 75,000
Supplies used in testing and inspection	$ 18,000
Quality data gathering, analysis, and reporting	$ 62,000
Final product testing and inspection	$ 21,000
Test and inspection of in-process goods	$ 44,000
Systems development	$ 45,000

What would be the total appraisal cost appearing on the quality cost report?

Multiple Choice

• $93,000

• $62,000

• $39,000

• $83,000