A- Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: Office Expenses Total Allocation Basis Salaries $ 50,000 Number of employees Depreciation 34,000 Cost of goods sold Advertising 68,000 Net sales Item Drilling Grinding Total Number of employees 1,800 2,700 4,500 Net sales $ 388,000 $ 582,000 $ 970,000 Cost of goods sold $ 140,600 $ 229,400 $ 370,000 The amount of salaries that should be allocated to Grinding for the current period is:

Multiple Choice

• $50,000.

• $21,080.

• $11,400.

• $30,000.

• $16,000.

B- 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 $15,600 and will produce cash flows as follows:

End of Year	Investment
	A			B
1	$	8,600		$	0
2		8,600			0
3		8,600			25,800

The present value factors of $1 each year at 15% are:

1	0.8696
2	0.7561
3	0.6575

The present value of an annuity of $1 for 3 years at 15% is 2.2832 The net present value of Investment B is: