Hi, I need help with Accounting, Cornerstone for Managerial Accounting chapters 13 and 14.

I. Structuring a Special-Order Problem Harrison Ford Company has been approached by a new customer with an offer to purchase 10,000 units of its model IJ4 at a price of $3.90 each. The new customer is geographically separated from the company's other customers, and existing sales would not be affected. Harrison normally produces 75,000 units of IJ4 per year but only plans to produce and sell 60,000 in the coming year. The normal sales price is $12 per unit. Unit cost information for the normal level of activity is as follows: Should the company accept or reject the special order? Reject 2. By how much will operating income increase or decrease if the order is accepted? by $ Decrease II. Determining the Optimal Product Mix with One Constrained Resource Casual Essentials, Inc. manufactures two types of team shirts, the Homerun and the Goalpost, with unit contribution margins of $8 and $15, respectively. Regardless of type, each team shirts must be fed through a stitching machine to affix the appropriate team logo. The firm leases seven machines that each provides 1,000 hours of machine time per year. Each Homerun shirt requires 6 minutes of machine time, and each Goalpost shirt requires 30 minutes of machine time. Assume that there are no other constraints. Required: If required, round your answers to the nearest whole number. If an amount is zero, enter "0". 1. What is the contribution margin per hour of machine time for each type of team shirts? Contribution Margin Homeru $ n Goalpost $ 2. What is the optimal mix of team shirts? Optimal Mix Homerun units Goalpost units 3. What is the total contribution margin earned for the optimal mix? $ III. Accounting Rate of Return Eyring Company invested $10,330,000 in a new product line. The life cycle of the product is projected to be seven years with the following net income stream: $200,000, $600,000, $1,000,000, $1,200,000, $1,600,000, $2,200,000, and $1,600,000. Required: Calculate the ARR. Enter your answer as a decimal, do not convert to a percent. Round your answer to two decimal places. IV. Payback Period Abbey Manufacturing is considering an investment in a new automated orderprocessing system. The new system requires an investment of $2,400,000 and either has: a. Even cash flows of $400,000 per year or b. The following expected annual cash flows: $300,000, $300,000, $800,000, $800,000, and $200,000. Required: Calculate the payback period for each case. a years . b . years V. Internal Rate of Return Randel Company produces a variety of gardening tools and aids. The company is examining the possibility of investing in a new production system that will reduce the costs of the current system. The new system will require a cash investment of $3,455,400 and will produce net cash savings of $600,000 per year. The system has a projected life of 9 years. Required: Calculate the IRR for the new production system. For discount factors use Exhibit 14B2. Round your answer to the nearest whole percentage. % VII. Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return Wheeler Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $700,000. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow: Year Cash Revenues 1 $1,500,000 2 1,500,000 3 1,500,000 4 1,500,000 5 1,500,000 Required: Compute the payback period for the NC equipment. Round your answer to one decimal place. Payback period = years VIII. Payback, Net Present Value, Internal Rate of Return, Intangible Benefits, Inflation Adjustment For discount factors use Exhibit 14B1 and Exhibit 14B-2. Foster Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines (to replace an existing manual system). The outlay required is $3,500,000. The NC equipment will last 5 years with no expected salvage value. The expected incremental after-tax cash flows (cash flows of the NC equipment minus cash flows of the old equipment) associated with the project follow: Year Cash Benefits Expenses 1 $3,900,000 $3,000,000 2 3,900,000 3,000,000 3 3,900,000 3,000,000 4 3,900,000 3,000,000 5 3,900,000 3,000,000 Foster has a cost of capital equal to 10%. The above cash flows are expressed without any consideration of inflation. Required: 1. Compute the payback period. Round your answer to two decimal places. years 2. Calculate the NPV and IRR of the proposed project. Use the minus sign to indicate a negative NPV. Round IRR to the nearest percent. NPV $ IRR 3. Conceptual Connection: Inflation is expected to be 5% per year for the next 5 years. The discount rate of 10% is composed of two elements: the real rate and the inflationary element. Since the discount rate has an inflationary component, the projected cash flows should also be adjusted to account for inflation. Make this adjustment, and recalculate the NPV. Round present value calculations and your final answer to the nearest dollar. $ Comment on the importance of adjusting cash flows for inflationary effects. The input in the box below will not be graded, but may be reviewed and considered by your instructor. IX. NPV and IRR, Mutually Exclusive Projects For discount factors use Exhibit 14B1 and Exhibit 14B-2. Weeden Inc. intends to invest in one of two competing types of computer-aided manufacturing equipment: CAM X and CAM Y. Both CAM X and CAM Y models have a project life of 10 years. The purchase price of the CAM X model is $2,400,000, and it has a net annual after-tax cash inflow of $600,000. The CAM Y model is more expensive, selling for $2,800,000, but it will produce a net annual after-tax cash inflow of $700,000. The cost of capital for the company is 10%. Required: 1. Calculate the NPV for each project. Round present value calculations and your final answers to the nearest dollar. CAM X: $ CAM Y: $ Which model would you recommend? CAM Y 2. Calculate the IRR for each project. CAM 20%to 25% X: CAM Y: 20%to 25% Which model would you recommend? both X. Structuring a Makeor-Buy Problem Fresh Foods, a large restaurant chain, needed to determine if it would be cheaper to produce 5,000 units of its main food ingredient for use in its restaurants or to purchase them from an outside supplier for $12 each. Cost information on internal production includes the following: Direct materials Direct labor Variable manufacturing overhead Variable marketing overhead Fixed plant overhead Total Fixed overhead will continue whether the ingredient is produced internally or externally. No additional costs of purchasing will be incurred beyond the purchase price. If required, round your answers to the nearest whole number. Required: 1. What are the alternatives for Fresh Foods? Make the ingredient in house or buy it externally. 2. List the relevant cost(s) of internal production and of external purchase. The input in the box below will not be graded, but may be reviewed and considered by your instructor. 3. Which alternative is more cost effective and by how much? (Use total cost when giving your answer.) Make 2500 4. Now assume that 40% of the fixed overhead can be avoided if the ingredient is purchased externally. Which alternative is more cost effective and by how much? (Use total cost when giving your answer.) Buy 3500 XI. Structuring a Keepor-Drop Product Line Problem with Complementary Effects Shown below is a segmented income statement for Hickory Company's three wooden flooring product lines: Hickory's parquet flooring product line has a contribution margin of $50,000 (sales of $300,000 less total variable costs of $250,000). All variable costs are relevant. Relevant fixed costs associated with this line include $30,000 in machine rent and $5,000 in supervision salaries. Assume that dropping the parquet product line would reduce sales of the strip line by 24% and sales of the plank line by 20%. All other information remains the same. Required: 1. If the parquet product line is dropped, what is the contribution margin for the strip line? $ 305000 For the plank line? $ 64000 2. Which alternative (keep or drop the parquet product line) is now more cost effective and by how much? Keep y$ 55000 b