1.What is the maximum amount the dean should be willing to pay for a new copy machine if he wants to earn an 8% return at a present value of $1?

The dean of the School of Fine Arts is trying to decide whether to purchase a copy machine to place in the lobby of the building. The machine would add to student convenience, but the dean feels compelled to earn an 8 percent return on the investment of funds. Estimates of cash inflows from copy machines that have been placed in other university buildings indicate that the copy machine would probably produce incremental cash inflows of approximately $20,000 per year. The machine is expected to have a three-year useful life with a zero salvage value.

2.What is the type of cost activity carried out when you receive raw materials from suppliers

3.The building maintenance department for Taylor Manufacturing Company budgets annual costs of $5,272,120 based on the expected operating level for the coming year. The costs are allocated to two production departments. Taylor is considering two allocation bases for assignment of costs to departments: (1) square footage and (2) direct labor hours. The following data relate to the potential allocation bases:

Production Dept. 1 Production Dept. 2

Square footage 29,160 40,210

Direct labor hours 40,210 29,160

Calculate the costs allocated to the production departments using each allocation base.

Production Dept. 1 Production Dept. 2

Square footage $ $

Direct labor hours $ $

4.Lake Stevens Marina has estimated that fixed costs per month are $359,700 and variable cost per dollar of sales is $0.50.

what is the break-even point per month in sales dollars? 719,400

What level of sales dollars is needed for a monthly profit of $50,200? (Round answer to 2 decimal places, e.g. 15.25.)

Sales?

5.The total manufacturing cost for a business is $29,400. It is 70% of the cost of goods manufactured. What is the cost of goods manufactured?

6.You deposit $3000 in an account earning 7% interest compounded monthly. How much will you have in the account in 15 years?

7.At the beginning of the year, John invested $10,000 in some debentures. He will receive a 10% coupon payment each year, paid yearly, and the principal will be repaid at the end of 5 years.

Using a discount rate of 8%, what is the approximate net present value (NPV) of John's investment?

8.Jack plans to take a 30-year fixed rate, 0 point mortgage at 4.625% to finance 80% of his new house with a monthly payment of $1,200.For simplicity, assume that there are no other fees or costs. Jack would like to take a 20-year second mortgage loan (Home Equity Line of Credit (HELOC)), with an annual rate of 5.615%.If Jack can only make $200 monthly payments for the HELOC, how much does he still need right now for the down payment?

9.You are thinking about selling your fishing excursion company. You can sell it today for $176,000. Or, you can sign a ten year contract with the first mate, Kate, where she operates the business, will own it after the contract, and you get all the profits, net of Kate's salary. Kate will only sign the contract if her salary is $65,000 or above per year. You estimate that the revenues for the company will be $85,000 per year, before paying Kate's salary.If the discount rate is 8%, should you sign the contract?

10.John needs money in 15 years' time to pay for his son's university fees. He is considering

three investments options:

(i) A single amount of $13250.with interest compounded continuously

(ii) 150 at the end of each month.

(iii) N$ 1750 at the beginning of each year.

a) If the interest rate is 10.5% p.a., how much will he get for each option?

b) What is the interest component for each investment?