Incladed lacladed ExcludedExcluded is consadering an investment opportunity that would vield a cash flow of S10,000 in five xr sthe most that the company should be willing to invest in this projer yeans 7. White Company's required rate ofreturn on capital budgeting projects is12%. Theo mpany (A) S 2,774 (B) S 5,670. (C) $17,637 (D) $36,050. (E) None of the above 8. An organization that provides housing for abused women has limited housing, so it pays rent for several families. The director is a small triplex that has a useful life of 10 years. The a discount rate of 15%, the present value of estimated cost is $100,000. 20,000. To cost cannot exceed the estimated the future savings on rent is S1 yield an internal rate of return that is at least 15%, the actual c cost of $100,000 by more than: (A) $20,000 (B) $10,038 (C) $ 3,985 (D) $ 2,000 (E) None of the above. 9. Y Corporation is considering purchasing a machine for S$15,000. The machine will generate a net after-tax income of $1,000 per year. Amortization expense will be $1,500. What is the payback period for the new machine? (A) 4 years (B) 6 yeans (C) 10 years (D) 15 years (E) More than 15 years 10. Bem Company invested in a project that cost $100,000. It had a net present value of $15,975 and a useful life of 8 years. The firm uses a 14% discount rate, and the project has an internal rate of return of 16%What are the annual cost savings provided by the project? (A) S 5,975 (B) S 8,600 (C) S 9,263 (D) $25,000 (E) $26,698 used by of Soeklift trucks. Presently, it sells 12,000 units per year to outside customers from transferring the units within the 14. Division X of Charter Corporation makes and sells a single product that is mansfacturers at 524 annsal capacity is 20,000 units, and the variable cost to make each unit is units a year from Division 4 per wsit The S16. Division Y of Chanter Corporation would like to buy 10,000 u X to use in its products. There would be no cost savings f company rather than sclling them on the outside market. What should be the lowest acceptable transfer price from the perspective of Division X? (A) 516.00. (B) $17.60 (C) 521.40 (D) 522.40 (E) $24.00 ce 15. Billy's Bookkeping Service is considering buying equipment to file electronic tax returns equipment cost would be $10,000, depreciation would be $2,000 per year for 3 years s estimated to increase Billy's net annual cash inflow by $3,000 in year 1 The $3,000 in year 2, 53,500 in year 3, $4,000 in year 4, and $2,000 in year 5. The equipment wouid be scrapped at the end or year 5. itwould have no salvage value. What is the estimated payhack period for this project? (A) 9.091 years (B) 5.000 years (C) 4 125 years (D) 3.226 years (E) 3.125 yeans Resed on the following information, answer Ourstion 16-17 The Stream Division has made the available for June: 520 Prime cost t labour 16. If Stream has excess capucity, the most appropriate price at which to transfer its the River Division is (A) 5520. (B) S510 (C) 3450. (D) $270 (E) $200 17. If Stream does sor have excess capacity and can sell all of its production extemally, the most appropriate price at which to transfer the product to River Division is (A) $520, (B) 5510 (C) 5450. (D) $270. (E) $200. 11. Bames Company is contemplating the purchase of a new piece of equigesent for $45,000 Predicted annual cash inflows from this iewesten are 51,000, 515,000, 59,000, y6,, and 33,000. The payback period is: (A) 4.50 years (B) 4.25 yeans (C) 3.50 ycars (D) 3.00 years (E) 2.50 years 12. What is the net present vahse of sa capital peojsect to bwy new cusipmnent for eplacing old equipment, given the following data and a minimonm neturns of 1237 Igiore necne Purchase price 536,000 521,600 7,200 Remaining useful life Lyears Current salvage vahae Salvage value in 8 years Anqual operating costs 12,000 1,000 14,000 2.000 8,000 (A) 545,788) (B) $4,596 (C) 56,616 (D) 5 7,020 (E) None of the above to produce k,000 composents ger period Extiermal Another division in the company, Y Division a roquesting a price of $536 per unit. The 13. Saumders Lad's S Division has ales currently account for 60% of ins has components and is Direct materials $14 Direct labour $12 market price of the component is S4) and S Division's unit costs Variable overhead S Fixed overhead Which of the following statements is true? (A) S Division should the not make the transfer because it does not have capacity (B) S Division should not make the transfer because it would vision should not make the tranafer because it would lose 57 om each n (D) Although S Divisions ncome will decrease, it should make the trensfer because it is in the best interest of Saunders Ltd (E) SDiv sion the tranfr should make the tranfer because both its divisional Income and the Incladed lacladed ExcludedExcluded is consadering an investment opportunity that would vield a cash flow of S10,000 in five xr sthe most that the company should be willing to invest in this projer yeans 7. White Company's required rate ofreturn on capital budgeting projects is12%. Theo mpany (A) S 2,774 (B) S 5,670. (C) $17,637 (D) $36,050. (E) None of the above 8. An organization that provides housing for abused women has limited housing, so it pays rent for several families. The director is a small triplex that has a useful life of 10 years. The a discount rate of 15%, the present value of estimated cost is $100,000. 20,000. To cost cannot exceed the estimated the future savings on rent is S1 yield an internal rate of return that is at least 15%, the actual c cost of $100,000 by more than: (A) $20,000 (B) $10,038 (C) $ 3,985 (D) $ 2,000 (E) None of the above. 9. Y Corporation is considering purchasing a machine for S$15,000. The machine will generate a net after-tax income of $1,000 per year. Amortization expense will be $1,500. What is the payback period for the new machine? (A) 4 years (B) 6 yeans (C) 10 years (D) 15 years (E) More than 15 years 10. Bem Company invested in a project that cost $100,000. It had a net present value of $15,975 and a useful life of 8 years. The firm uses a 14% discount rate, and the project has an internal rate of return of 16%What are the annual cost savings provided by the project? (A) S 5,975 (B) S 8,600 (C) S 9,263 (D) $25,000 (E) $26,698 used by of Soeklift trucks. Presently, it sells 12,000 units per year to outside customers from transferring the units within the 14. Division X of Charter Corporation makes and sells a single product that is mansfacturers at 524 annsal capacity is 20,000 units, and the variable cost to make each unit is units a year from Division 4 per wsit The S16. Division Y of Chanter Corporation would like to buy 10,000 u X to use in its products. There would be no cost savings f company rather than sclling them on the outside market. What should be the lowest acceptable transfer price from the perspective of Division X? (A) 516.00. (B) $17.60 (C) 521.40 (D) 522.40 (E) $24.00 ce 15. Billy's Bookkeping Service is considering buying equipment to file electronic tax returns equipment cost would be $10,000, depreciation would be $2,000 per year for 3 years s estimated to increase Billy's net annual cash inflow by $3,000 in year 1 The $3,000 in year 2, 53,500 in year 3, $4,000 in year 4, and $2,000 in year 5. The equipment wouid be scrapped at the end or year 5. itwould have no salvage value. What is the estimated payhack period for this project? (A) 9.091 years (B) 5.000 years (C) 4 125 years (D) 3.226 years (E) 3.125 yeans Resed on the following information, answer Ourstion 16-17 The Stream Division has made the available for June: 520 Prime cost t labour 16. If Stream has excess capucity, the most appropriate price at which to transfer its the River Division is (A) 5520. (B) S510 (C) 3450. (D) $270 (E) $200 17. If Stream does sor have excess capacity and can sell all of its production extemally, the most appropriate price at which to transfer the product to River Division is (A) $520, (B) 5510 (C) 5450. (D) $270. (E) $200. 11. Bames Company is contemplating the purchase of a new piece of equigesent for $45,000 Predicted annual cash inflows from this iewesten are 51,000, 515,000, 59,000, y6,, and 33,000. The payback period is: (A) 4.50 years (B) 4.25 yeans (C) 3.50 ycars (D) 3.00 years (E) 2.50 years 12. What is the net present vahse of sa capital peojsect to bwy new cusipmnent for eplacing old equipment, given the following data and a minimonm neturns of 1237 Igiore necne Purchase price 536,000 521,600 7,200 Remaining useful life Lyears Current salvage vahae Salvage value in 8 years Anqual operating costs 12,000 1,000 14,000 2.000 8,000 (A) 545,788) (B) $4,596 (C) 56,616 (D) 5 7,020 (E) None of the above to produce k,000 composents ger period Extiermal Another division in the company, Y Division a roquesting a price of $536 per unit. The 13. Saumders Lad's S Division has ales currently account for 60% of ins has components and is Direct materials $14 Direct labour $12 market price of the component is S4) and S Division's unit costs Variable overhead S Fixed overhead Which of the following statements is true? (A) S Division should the not make the transfer because it does not have capacity (B) S Division should not make the transfer because it would vision should not make the tranafer because it would lose 57 om each n (D) Although S Divisions ncome will decrease, it should make the trensfer because it is in the best interest of Saunders Ltd (E) SDiv sion the tranfr should make the tranfer because both its divisional Income and the