HW CORRECTIONS.

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1) Wayne Company is considering a long-term investment project called ZIP. ZIP will require an investment of $126,006. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $79,200, and annual cash outflows would increase by $38,900. The companys required rate of return is 10%. Calculate the net present value on this project. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answer to 0 decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

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2) Wayne Company is considering a long-term investment project called ZIP. ZIP will require an investment of $141,328. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $88,600, and annual cash outflows would increase by $40,200. The companys required rate of return is 12%. Calculate the internal rate of return on this project. (Round answers to 0 decimal places, e.g. 15%.)

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3) For its three investment centers, Gerrard Company accumulates the following data:

The centers expect the following changes in the next year: (I) increase sales 20%; (II) decrease costs $439,000; (III) decrease average operating assets $460,000. Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of 76%. (Round ROI to 1 decimal place, e.g. 1.5.)

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4) Rap Corporation produces outdoor portable fireplace units. The following per unit cost information is available: direct materials $25, direct labor $28, variable manufacturing overhead $19, fixed manufacturing overhead $21, variable selling and administrative expenses $14, and fixed selling and administrative expenses $13. The company's ROI per unit is $17.

Net present value -1,139 Whether this project should be accepted? The project should be accepted Internal rate of return on this project is between % and Determine whether this project should be accepted? The project should be accepted. Sales Controllable margin Average operating assets $1,960,000 1,225,500 4,902,000 II $4,027,000 2,186,190 8,097,000 III $4,035,000 3,765,260 12,146,000 II III The expected return on investment 23.2 38.5 32.21 x Your answer is incorrect. Try again. Compute Rap Corporation's markup percentage using absorption-cost pricing. (Round answer to 2 decimal places, e.g. 10.50.) Absorption-cost pricing markup percentage 0.70