A company is planning to purchase a machine that will cost $36,000 with a six-year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the payback period for this machine? $102,000 Sales Costs: Manufacturing Depreciation on machine Selling and administrative expenses Income before taxes Income tax (358) Net income $56,000 6,000 34,000 (96,000) $ 6,000 (2,100) $ 3,900 Multiple Choice 6.00 years. 9.23 years. 18.46 years. 1.36 year. 3.64 years. Alfarsi Industries uses the net present value method to make investment decisions and requires a 15% annual return on all investments. The company is considering two different investments. Each require an initial investment of $14,600 and will produce cash flows as follows: End of Year 1 2 3 Investment A B $9,400 $ 0 9,400 0 9,400 28,200 The present value factors of $1 each year at 15% are: 1 2 3 0.8696 0.7561 0.6575 The present value of an annuity of $1 for 3 years at 15% is 2.2832 The net present value of Investment A is: Multiple Choice $(14,600). $13,600. $6,862. $(21,463). $18,542 The Dark Chocolate Division of Yummy Snacks, Inc. had the following operating results last year: Sales (150,000 pounds of chocolate) Variable expenses Contribution margin Fixed expenses Profit $ 60,000 37,500 22,500 12,000 $10,500 Assume that the Dark Chocolate Division is currently operating at its capacity of 150,000 pounds of chocolate. Also assume again that the Peanut Butter Division wants to purchase an additional 20,000 pounds of chocolate from Dark Chocolate. Under these conditions, what amount per pound of chocolate would Dark Chocolate have to charge Peanut Butter in order to maintain its current profit? Multiple Choice $0.15 per pound $0.25 per pound $0.40 per pound $0.30 per pound $0.08 per pound Pepper Department store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments: Expense Rent Advertising Administrative Basis for allocation Square feet of floor space Amount of dollar sales Number of employees Amount $ 24,000 $30,000 $45,000 The following information is available for its three operating (sales) departments: Department Square Feet 3,000 3,400 3,600 10,000 A B Dollar Sales $ 280,000 $ 300,000 $ 420,000 Number of employees 6 8 10 Totals $1,000,000 24 What is the total expense allocated to Department B? Multiple Choice O $32,160. $29,375. O $30,462. $30,500. O $30,775
