1.Texs applies an overhead rate of $10/unit based on 200 units. If Texs produces 210 units and has a flexible overhead budget of $1,900, the overhead volume variance is: a. 200 favorable b. 200 unfavorable c. 100 favorable d. 100 unfavorable

2.Jim King is saving for a new tractor that costs $60,000. How many dollars should be set aside now to have $60,000 in 10 years assuming that money compounds at 4% annually? A. 40,436 b. 40,536 c. 40,636 d. 40,736

3.Salvage value

In theory, is equal to the present value of the future cash flow of the asset.

Should not be used to justify marginal investments

Is the best prediction of what an asset could be sold for at the end of the time horizon

All of the above

None of the above

4.Charles Layton is saving for a new car that cost $35,000. How many dollars should he set aside now to have $35,000 in 5 years assuming money compounds at 4% annually?

28,116.50

29,116.50

30,116.50

5.In year four, Ellis LLC had EBIT of 400. Taxes were 40% and depreciation was 25. What was cash flow in year four? A. 240 b. 255 c. 265 d. None of the above

6.Todd LLC is investing in a new machine that costs $200,000. The new machine would generate cash flow of $150,000 for each of the next three years. Todd uses a discount rate of 10%. What is the net present value? A. $142 b. $173 c. $189 d. $201

7.As the interest rate used to discount future cash flows is decreased. Present value of the future cash inflows: a. increases b. decreases c. stay the same

8.Jones LLC is investing in a new piece of equipment that costs $300,000. The new equipment would generate cash flows of $200,000 for each of the next three years. Jones uses a discount rate of 12%. What is the payback (in years)? A. 1 b. 1.25 c. 1.50 d. 1.75