Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Business Accounting questions. Thank you for your help! 48) Talboe Company makes wheels that it uses in the production of children's wagons. Talboe's costs to
Business Accounting questions. Thank you for your help! 48) Talboe Company makes wheels that it uses in the production of children's wagons. Talboe's costs to produce 200,000 wheels annually are as follows: Direct materials$40,0 An outside supplier has offered to sell Talboe similar wheels for $0.80 per wheel. If the wheels are purchased from the outside supplier, $25,000 of annual fixed manufacturing overhead would be avoided and the facilities now being used to make the wheels would be rented to another company for $55,000 per year. the wheel from the outside supplier, then the change in annual net operating income is a: A) $50,000 increase B) $5,000 decrease C) $70,000 increase D) $40,000 increase 49) A decrease in the discount rate: A) is one way to compensate for greater risk in a project. B) will reduce present values of future cash flows. C) will increase present values of future cash flows. D) responses a and b are both correct 50) Acme Company is considering investing in a new machine that costs $84,900 and which has a useful life of 12 years with no salvage value. The machine will generate $15,000 annually in net cash inflows. The required rate of return is 12%. A) The company should accept the project since the internal rate of return is equal to the B) The company should reject the project since the internal rate of returm is less than the required C) The company should accept D) The company should accept the project since the project's net present value is required rate of return. rate of return. required rate of return the project since the internal rate of return is greater than the equal to zero
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started