Indicate which of the followings is the final output of the operating budget?

Select one:

a. budgeted statement of stockholders' equity

b. budgeted statement of cash flows

c. budgeted income statement

d. budgeted balance sheet

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ABC manufacturing company is considering establishment of a new branch and wants to use Net Present Value (NPV) method in capital budgeting to evaluate this investment opportunity. Assume that net present value of this project is zero and the minimum desired rate of return used to obtain the net present value of zero is 8%. Indicate which of the following statements is correct?

Select one:

a. The project is desirable if the minimum desired rate of return is 6% or 10%.

b. The project is desirable if the minimum desired rate of return is 10%.

c. The project is desirable if the minimum desired rate of return is 6%.

d. The project is undesirable if the minimum desired rate of return is 6%.

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In January 1, 2019, MUFEED manufacturing company acquired a new machine that costs $180,000. The new machine is expected to generate $40,000 in cost savings annually for five years. The terminal value at the end of five years is $10,000. Assume straight-line depreciation is used. Calculate the payback period for the new machine.

Select one:

a. 4.00 years

b. 4.20 years

c. 4.50 years

d. 3.00 years