Question 11 1 pts Mulcahey Automobiles Company fabricates automobiles. Each vehicle includes one wiring harness, which is currently made in-house. Details of the harness fabrication are as follows: Volume 800 units per month Variable cost per unit $7 per unit Fixed costs $12,000 per month An Indonesian factory has offered to supply Mulcahey with ready-made units for a cost of $15 per wiring harness. Assume that Mulcahey's fixed costs could be reduced by $4,000 if it outsources and that Mulcahey will not be able to use the excess capacity in any profitable manner. If Mulcahey decides to outsource, monthly operating income will decrease by $12,000 increase by $5,600 increase by $12.000 decrease by $2,400 1 pts Question 14 Landmark Prints is considering an investment in new equipment costing $502,000. The equipment will be depreciated on a straight-line basis over a five-year life and is expected to generate net cash inflows of $122,000 the first year, $ 158,000 the second year, and $160,000 every year thereafter until the fifth year. What is the payback period for this investment? The residual value is zero. (Round your answer to two decimal places.) 3.11 years 3.39 years 4.30 years 2.80 years ry 2 Question 15 1 pts A company is evaluating three possible investments. Each uses the straight-line method of depreciation. Following information is provided by the company: Project A Project B Project C Investment $230,000 $54,000 $230,000 Residual value 0 12,000 36,000 Net cash flows: Year 1 56,000 38,000 94,000 Year 2 56,000 29,000 64,000 Year 3 56,000 25,000 74,000 Year 4 / 56,000 22,000 34.000 Year 5 / 56,000 0 0 What is the accounting rate of return for Project B? (Round your answer to two decimal places.) 54.55% 26.19% 38.14% 51.83% SF ARN Proposal Y $508,000 4 years ccount ProposalX Investment $738,000 Useful life 5 years Estimated annual net cash inflows received at the end of each year $152,000 Residual value $62,000 Depreciation method Straight-line Annual discount rate 10% Compute the present value of the future cash inflows from Proposal Y. $100,000 $0 shboard Straight-line 9% ourses Present value of an ordinary annuity of $1: alendar Inbox Help 8% 0.926 1.783 2.577 3.312 3.993 4.623 9% 0.917 1.759 2.531 3.240 3.809 4.486 10% 0.909 1.736 2.487 3.170 3.791 6 4.355 $254.000 $324.000 $294,640 $271.018