Q1 ABC Company is studying a project that would have a 4 year life and require a $1,600,000 investmentin equipment. At the end of eight years, the project would terminate and the equipment would have no value left over. The project would provide net income each year as follows: Sales 3,200,000 Less COGS 300,000 Gross Margin 2,900,000 Less: Operating Expenses Advertising, Salaries and other fixed 1,050,000 Salary Expense 1,300,000 Amortization 100,000 Total Expenses 2,450,000 Net Income 450,000 The company's discount rate is 18% 1) compute the net annual cash inflow from project 2) compute the net present value of the project. Is it acceptable? Q2 Baron Ltd makes a commercial cleaning compound known as Loomp. The direct materials and direct labour standards for one unit of Loomp follow Standard Quantity or hours Standard Price or Rate Standard Cost Direct materials 2.1 Kg $5.50 per kg $11.55 Direct Labour 0.2 hour 12.00 per hour 2.40 During the most recent month, the following activity was recorded a. 9,000 kg of materials were purchased at a cost of $5.20 per kg b. All of the material purchased was used to produce 4,000 units of Loomp c. A total of 750 hours of direct labour time was recorded at a total labour cost of $10,425Required: 1. Compute the direct materials price and quantity variances for the month 2. Compute the direct labour rate and efficiency variances for the month