Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 1 Matching - Indicate whether the item described is Relevant or Irrelevant to the future action being considered The cost of annual depreciation

image text in transcribed

QUESTION 1 Matching - Indicate whether the item described is Relevant or Irrelevant to the future action being considered The cost of annual depreciation on an existing machine used to generate a one time special order for a customer The cost of direct materials used to produce a one time special sales order for a customer The cost of removing an old building from a site where the new building will be built The original cost of a piece of equipment, when deciding whether to repair or replace the equipment A. Irrelevant B. Relevant QUESTION 2 Random Co. purchased a machine for $400,000 that has a five year life and will produce annual net cash inflows of $110,000 per year over the life of the machine. The present value of an annuity for 5 years at an 8% cost of capital is 3.993. Calculate the Net Present Value and Payback Period of this investment. Net present value $39,230 Payback period 3.6 years Net present value $150,000 Payback period 3.6 years Net present value $150,000 Payback period 4 years Net present value $39,230 Payback period 4 years

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting in an Economic Context

Authors: Jamie Pratt

8th Edition

9781118139424, 9781118139431, 470635290, 1118139429, 1118139437, 978-0470635292

More Books

Students also viewed these Accounting questions

Question

Are you at your best around 8 or 9 AM? Yes No

Answered: 1 week ago

Question

What is the purpose of a retaining wall, and how is it designed?

Answered: 1 week ago

Question

How do you determine the load-bearing capacity of a soil?

Answered: 1 week ago

Question

what is Edward Lemieux effect / Anomeric effect ?

Answered: 1 week ago

Question

Define Management by exception

Answered: 1 week ago