40. Blanding Company is considering four investment proposals, as shown below: Investment Proposal A B C D Investment required........ $90,000 $110,000 $80,000 $140,000 Present value of future cash inflows..... $105,000 $120,000 $100,000 $170,000 Using the project profitability index, the ranking from most to least desirable would be A. D, B, A, B. D, C, A, B C. C, D, A, B D. C, A, D, B 41. Olinick Corporation is considering a project that would require an investment of $3 and would last for 8 years. The incremental annual revenues and expenses generated by project during those 8 years would be as follows: bo Sales ......... $227,000 Variable expenses .......... 52.000 Contribution margin ........... 175.000 Fixed expenses: Salaries............. 27,000 Rents .. 41,000 Depreciation ................... 40,000 Total fixed expenses............ 108.000 Net operating income ......... $ 67,000 The scrap value of the project's assets at the end of the project would be $23,000. Th period of the project is closest to: A. 3.0 years D. 4.8 years B. 5.1 years E. 3.4 years C. 3.2 years 42. The Able Company is considering buying a new donut maker. This machine wi old donut maker that still has a useful life of two years. The new machine will cost year to operate, as opposed to the old machine, which costs $27,000 per year to op because of increased capacity, an additional 10,000 donuts a year can be produced makes a contribution margin of $0.10 per donut. The old machine can be sold for the new machine costs $250,000. The incremental annual net cash inflows prov wmachine would be: D. $54,000