A: Cabell Products just inherited a 1958 Chevy Impala from her late Aunt Joop. Aunt Joop purchased the car 40 years ago for $8,000. They are either going to sell the car for $10,000 or have it restored and then sell it for $22,000. The restoration will cost $9,000. They would be financially better off by? $3,000 to have the vehicle restored / $6,000 to have the vehicle restored / $9,000 to have the vehicle restored / $11,000 to have the vehicle restored

B: Cabell Products is considering Alternative A and Alternative B. Costs associated with the alternatives are listed below:

	Alternative A			Alternative B
Materials costs	$	51,000		$	68,900
Processing costs	$	46,900		$	46,900
Equipment rental	$	16,300		$	16,300
Occupancy costs	$	18,500		$	27,500

What is the financial advantage (disadvantage) of Alternative B over Alternative A? $132,700 / $26,900 / $159,600 / $146,150

C: Cabell Products has provided the following data concerning an investment project that it is considering:

Initial investment	$	210,000
Annual cash flow	$	126,000	per year
Expected life of the project		4	years
Discount rate		9	%

Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the project is closest to? $198,114 / $210,000 / $(84,000) / $(198,114)

D: Cabell Products is investigating automating a process. Old equipment, with a current salvage value of $30,000, would be replaced by a new machine. The new machine would be purchased for $396,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $137,000 per year in cash operating costs. The simple rate of return on the investment is closest to (Ignore income taxes.)? 19.4% / 17.9% / 34.6% / 16.7%

E: Cabell Products comparative balance sheet appears below:

The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000. It did not sell or retire any property, plant, and equipment during the year. The company uses the indirect method to determine the net cash provided by operating activities. Which of the following is correct regarding the operating activities section of the statement of cash flows?

• The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be added to net income

• The change in Accounts Receivable will be added to net income; The change in Inventory will be subtracted from net income

• The change in Accounts Receivable will be added to net income; The change in Inventory will be added to net income

• The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be subtracted from net income

Comparative Balance Sheet Ending Beginning Balance Balance Assets Current assets: Cash and cash equivalents $ 28,000 $31,000 Accounts receivable 18,000 20,000 58,000 56,000 Inventory Prepaid expenses 12,000 10,000 119,000 114,000 Total current assets Property, plant, and equipment Less accumulated depreciation 374,000 354,000 190,000 165,000 184,000 189,000 Net property, plant, and equipment $303,000 $303,000 Total assets Liabilities and stockholders' equity: Current liabilities: $ 13,000 Accounts payable $ 9,000 53,000 Accrued liabilities 52,000 Income taxes payable 67,000 69,000 Total current liabilities 132,000 131,000 Bonds payable 76,000 73,000 208,000 204,000 Total liabilities Stockholders' equity: Common stock 28,000 26,000 Retained earnings 67,000 73,000 Total stockholders' equity 95,000 99,000 $303,000 $303,000 Total liabilities and stockholders' equity