A company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $100,000. The present value of the future cash flows at the company's desired rate of return is $105,000. The IRR on the project is 12%. Which of the following statements is true? a. The desired rate of return used to calculate the present value of the future cash flows is more than 12%. b. The desired rate of return used to calculate the present value of the future cash flows is equal to 12%. c. The desired rate of return used to calculate the present value of the future cash flows is less than 12%. d. The project should not be accepted because the net present value is negative. 10% The rate of earnings is 6% and the cash to be received in 4 years is $20,654. The present value amount, using the following partial table of present value of $1 at compound interest, is (round to two decimal points). Year 6% 12% 1 0.943 0.909 0.893 2. 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 a. $14,106.68 b. $13,135.94 c. $17,349.36 d. $16,357.97 Hayden Company is considering the acquisition of a machine that costs $372,000. The machine is expected to have a useful life of 6 years, a negligible residual value, an annual net cash flow of $97,000, and annual operating income of $82,450. What is the estimated cash payback period for the machine (round to one decimal points)? a. 4.5 years b. 1.2 years c. 3.8 years d.5.7 years Peyton Company manufactures Phone X and Phone Y. Peyton can sell all it can make of either. Based on the following data, assuming the number of hours is a constraint, which statement is true? Sales price Variable cost $48 38 Y $44 28 8 hours Time needed to process 5 hours a. Y is more profitable than X. b. X and Y are equally profitable. c. X is more profitable than Y. d. Neither X nor Y is profitable