Exercise 16-36 Payback Period; Uneven Cash Flows (Section 3) (LO 16-1, 16-6, 16-8) Allegience Insurance Company's management is considering an advertising program that would require an initial expenditure of $173.775 and bring in additional sales over the next five years. The projected additional sales revenue in year 1 is $80,000, with associated expenses of $27.500. The additional sales revenue and expenses from the advertising program are projected to increase by 10 percent each year. Allegience's tax rate is 30 percent. (Hint: The $173,775 advertising cost is an expense.) Use Appendix A for your reference. (Use appropriate factor($) from the tables provided.) Required: 1. Compute the payback period for the advertising program. 2. Calculate the advertising program's net present value, assuming an after-tax hurdle rate of 10 percent. (Round your Intermedlate calculations and final answer to the nearest whole dollar.) 1. Payback period years 2. Net present valueExercise 17-15 Direct Method of Service Department Cost Allocation; College (LO 17-1) Hudson Community College enrolls students in two departments, Liberal Arts and Sciences. The college also has two service departments, the Library and the Computing Services Department. The usage of these two service departments' output for the year is as follows: Provider of Service Computing User of Service Library Services Library Computing Services Liberal Arts 60% 30% Sciences The budgeted costs in the two service departments for the year are as follows: Library $740, 090 Computing Services 340, 090 Required: 1. Use the direct method to allocate the budgeted costs of the Library and Computing Services Department to the college's Liberal Arts and Sciences departments. (Do not round Intermediate calculations.) Provider of Service Liberal Arts Sciences Library Computing Services TotalExercise 17-16 Step-Down Method of Service Department Cost Allocation; College (LO 17-1) Hudson Community College enrolls students in two departments, Liberal Arts and Sciences. The college also has two service departments, the Library and the Computing Services Department. The usage of these two service departments' output for the year is as follows: Provider of Service Computing User of Service Library Services Library Computing Services Liberal Arts Sciences The budgeted costs in the two service departments for the year are as follows: Library $1,030, 080 Computing Services 490, 090 Required: 1. Use the step-down method to allocate Hudson Community College's service department costs to the Liberal Arts and Sciences departments. (Do not round Intermedlate calculations.) Liberal Arts Sciences Allocation of Computing Service costs Allocation of Library costs Total costs allocated to each department SExercise 17-20 Physical-Units Method; Joint Cost Allocation (LO 17-4) Breakfasttime Cereal Company manufactures two breakfast cereals in a joint process. Cost and quantity information is as follows: Quantity at Sales Price Joint Cost Cereal Split-Off Point per Kilogram $39, 808 Yummies 12, 600 kilograms $2. 18 Crummies 8, 400 kilograms 2. 68 Required: Use the physical-units method to allocate the company's joint production cost between Yummies and Crummies. (Do not round Intermediate calculations.) Allocation of Joint Cost Yummies CrummiesExercise 17-21 Relative-Sales-Value Method; Joint Cost Allocation (LO 17-4) Breakfasttime Cereal Company manufactures two breakfast cereals in a joint process. Cost and quantity information is as follows: Quantity at Sales Price Joint Cost Cereal Split-Off Point per Kilogram $105,980 Yummies 13, 508 kilograms $7.50 Crummies 9,500 kilograms 9.89 Required: Use the relative-sales-value method to allocate Breakfasttime Cereal Company's joint production cost between Yummies and Crummies. (Round Intermediate calculations of Relative Proportions to 3 decimal places and final answers to the nearest dollar amount.) Sales Value at Allocation of Split-off Point Joint Cost Yummies Crummies Total