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D O ar Year BA 412 Auding Free Elective em TON EYE - 's Pharmacy is considering the purchase of machine which will make available

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D O ar Year BA 412 Auding Free Elective em TON EYE - 's Pharmacy is considering the purchase of machine which will make available to customers at a per-copy charge. The copying machine has an initial cost of $7,500, an estimated useful life of five years, and an estimated salvage value of $500. The estimated annual revenue and expenses relating te geration of the machine are as follows $8,000 $5.500 Revenue Expenses other than depreciation Al revenue will be received in cash expenses other than depreciation will be paid in cash Depreciation will be computed by the straight-line method. Answer the following questions. If you select answer d, indicate the correct amount in the space provided. YOU WILL NOT RECEIVE CREDIT FOR YOUR ANSWER UNLESS YOU SHOW YOUR WORKI 4 Refer to the above data. Acquisition of the copying machine is expected to increase Physician's annual net income by: $1,100 $600. b $500. d Some other amount. Refer to the above doto. The annual net cash flow expected from the investment in the machine is: a $1,000 c $500 d $2,500 b $600 Refer to the above data. The payback period on this investment is estimated at: c3 years. 1.125 years. b d None of these answers. 7.5 years. Refer to the above doto. The expected rate of return on average investment is: 60% a 37.1%. d Some other rate. b 33 1/3%. Refer to the above data. The net present value of the proposed investment, discounted at an annual rate of 15% and rounded to the nearest dollar, is (tables show that using a discount rate of 15%, the present value of $1 due in five years is 0.497, and the present value of a five-year $1 annuity is 3.352): a $528 $(1,405). b $1,128.50. d Some other amount. 2. The following information regarding Baron Company is available: $264,000 $99,000 Sales.... Cost of sales ............ $66,000 Operating expense..... Operating earnings .. Average invested capital....... $660,000 ROI... Return on sales ................ Capital turnover............. Compute the answers for items A-D

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