20. Quality Mfg. wants to buy a new building for $500,000. Quality requires a 7% return on this building. The annual net cash flows and income for each year are: Year Net cash flow Net income $150,000 $250,000 2 120,000 380,000 3 130,000 470,000 4 110,000 310,000 The present value of $1 at 7% is Yr 1: 0.9346 Yr 2: 0.8734 Yr 3: 0.8163 Yr 4: 0.7629 Calculate the building's net present value: a. $685,702 b. $1,185,702 c. $435,756 d. $64,244 21. In 2020, McFadden Mfg. actual overhead is $1,200,000; applied overhead is $1,275,000. Calculate McFadden's under or over applied overhead for 2020 and how the overhead account should be closed out. a. $75,000 underapplied, credit the overhead account to close b. $75,000 overapplied, credit the overhead account to close c. $75,000 underapplied, debit the overhead account to close d. $75,000 overapplied, debit the overhead account to close