Daniels Consulting is considering purchasing two different types of servers. Server A will generate net cash inflows of $26,000 per year and have a zero residual value. Server A's estimated useful life is three years, and it costs $44,000.Server B will generate net cash inflows of $28,000 in year 1, $11,000 in year 2, and $5,000 in year 3. Server B has a $5,000 residual value and an estimated life of three years. Server B also costs $44,000. Daniels's required rate of return is 14%.Requirements1. Calculate payback, accounting rate of return, net present value, and internal rate of return for both server investments. Use Microsoft Excel to calculate NPV and IRR.2. Assuming capital rationing applies, which server should Daniels invest in? CHAPTER 261482 chapter 26COMPREHENSIVE PROBLEMComprehensive Problem for Chapters 25-26David Dennison, majority stockholder and president of Dennison, Inc., is working with his top managers on future plans for the company. As the company's managerial accountant, you've been asked to analyze the following situations and make recommendations to the management team. Requirements 1. Division A of Dennison, Inc. has $4,950,000 in assets. Its yearly fixed costs are $650,000, and the variable costs of its product line are $1.40 per unit. The division's volume is currently 480,000 units. Competitors offer a similar product, at the same quality, to retailers for $3.75 each. Dennison's management team wants to earn a 10% return on investment on the division's assets.a. What is Division A's target full product cost?b. Given the division's current costs, will Division A be able to achieve its target profit?c. Assume Division A has identified ways to cut its variable costs to $1.25 per unit. What is its new target fixed cost? Will this decrease in variable costs allow the division to achieve its target profit?d. Division A is considering an aggressive advertising campaign strategy to differentiate its product from its competitors. The division does not expect volume to be affected, but it hopes to gain more control over pricing. If Division A has to spend $105,000 next year to advertise and its variable costs continue to be $1.25 per unit, what will its cost-plus price be? Do you think Division A will be able to sell its product at the cost-plus price? Why or why not?2. The division manager of Division B received the following operating income data for the past year:$ 300,000$ 330,000$ 630,00084,000276,000134,000TotalProduct LineT205B179210,000246,00054,00036,000216,00048,00066,000114,000270,000360,000 DIVISION B OF DENNISON, INC.Income StatementFor the Year Ended December 31, 2016 Sales Revenue Cost of Goods Sold: Variable Fixed Total Cost of Goods SoldGross ProtSelling and Administrative Expenses: Variable Fixed Total Selling and Administrative ExpensesOperating Income (Loss)72,00024,00096,00067,000201,00062,00043,000105,000$ (51,000)$ 120,000$ 69,000>ISBN 1-323-32511-5Horngren's Accounting: The Managerial Chapters, Eleventh Edition, by Tracie L. Miller-Nobles, Brenda L. Mattison, and Ella Mae Matsumura. Published by Prentice Hall. Copyright 2016 by Pearson Education, Inc.