Question
A company is evaluating three possible investments. Each uses the?straight-line method of depreciation. Following information is provided by the?company: Project A Project B Project C
A company is evaluating three possible investments. Each uses the?straight-line method of depreciation. Following information is provided by the?company:
| Project A | Project B | Project C | |
| Investment | ?$230,000 | ?$54,000 | ?$230,000 |
| Residual value | ???0 | ?12,000 | ?36,000 |
| Net cash? flows: | |||
| Year 1 | ?56,000 | ?38,000 | ?94,000 |
| Year 2 | ?56,000 | ?29,000 | ?64,000 |
| Year 3 | ?56,000 | ?25,000 | ?74,000 |
| Year 4 | ?56,000 | ?22,000 | ?34,000 |
| Year 5 | ?56,000 | ???0 | ???0 |
What is the accounting rate of return for Project? B? (Round your answer to two decimal? places.)
A.
?38.14%
B.
?54.55%
C.
?51.83%
D.
?26.19%
Rickman, Inc. reports the following? information:
| Units produced | 590 | units |
| Units sold | 490 | units |
| Sales price | ?$120 | per unit |
| Direct materials | ?$26 | per unit |
| Direct labor | ?$9 | per unit |
| Variable manufacturing overhead | ?$14 | per unit |
| Fixed manufacturing overhead | ?$16,500 | per year |
| Variable selling and administrative costs | ?$6 | per unit |
| Fixed selling and administrative costs | ?$12,200 | per year |
There are no beginning inventories. What is the ending balance in Finished Goods Inventory using variable? costing?
A.
?$3,500
B.
?$4,900
C.
?$7,697
D.
?$5,500
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Internal Auditing Assurance And Advisory Services
Authors: Kurt R. Reding, Paul J. Sobel, Urton L. Anderson, Michael J. Head, Sridhar Ramamoorti, Mark Salamasick, Cris Riddle
3rd Edition
0894137409, 978-0894137402
