QUESTION 11 The management of Consumers Mfg would like to purchase a specialized production machine for $222,000 The machine is expected to last three years, with a salvage value of $5,000 Annual maintenance costs will total $30,000, and annual labor and material savings are predicted to be $140,000 The company's required rate of return in 15 Find the NPV of this investment $32,442 $11,564 $28,210 $6,404 2 points QUESTION 12 QRC Tax is evaluating the profitability of their two customers, A and B Total fixed costs are allocated evenly between customer A and B, and will remain the same whether they add or drop customers Should QRC Tax drop customer B The profit loss for each customer is shown below Should customer B be dropped A B Revenue 250,000 140,000 Variable costs 112500 63000 Contribution margin 137,500 77,000 Allocated fixed costs 80000 80000 Customer profit (loss) 57,500 3,000 No, profit will decrease if Customer B is dropped Yes, because any customer showing a loss should be dropped Yes, because their revenues are much lower than Customer A Yes, profit will increase if Customer B is dropped 2 points QUESTION 13 Narion, Inc has a 20 required rate of return Three managers have presented three potential projects to increase income over the next ten years, each with their preferred measure Project A was reported to have an NPV of $(2,460) Project B was reported with an IRR of 28 Project C was reported to have a payback period of 23 years With which of these projects should Narion move forward Project C Project A Project B All three sound great 2 points QUESTION 14 Which approach to budgeting approach is most effective because lower level employees are involved in the budgeting process Top down budgeting Master budgeting Associative budgeting Participative budgeting 2 points QUESTION 15 In the budget process, what do we call the estimated number of units to be manufactured (based on sales projections and inventory policies) the sales budget the manufacturing budget the production budget the materials budget

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QUESTION 11 The management of Consumers Mfg. would like to purchase a specialized production machine for $222,000. The machine is expected to last three years,

QUESTION 11

The management of Consumers Mfg. would like to purchase a specialized production machine for $222,000. The machine is expected to last three years, with a salvage value of $5,000. Annual maintenance costs will total $30,000, and annual labor and material savings are predicted to be $140,000. The company's required rate of return in 15%. Find the NPV of this investment.

$32,442

$11,564

$28,210

$6,404

2 points

QUESTION 12

QRC Tax is evaluating the profitability of their two customers, A and B. Total fixed costs are allocated evenly between customer A and B, and will remain the same whether they add or drop customers. Should QRC Tax drop customer B? The profit/loss for each customer is shown below. Should customer B be dropped?

	A	B
Revenue	250,000	140,000
Variable costs	112500	63000
Contribution margin	137,500	77,000
Allocated fixed costs	80000	80000
Customer profit (loss)	57,500	-3,000

		No, profit will decrease if Customer B is dropped.
		Yes, because any customer showing a loss should be dropped.
		Yes, because their revenues are much lower than Customer A.
		Yes, profit will increase if Customer B is dropped.

2 points

QUESTION 13

Narion, Inc. has a 20% required rate of return. Three managers have presented three potential projects to increase income over the next ten years, each with their preferred measure. Project A was reported to have an NPV of $(2,460). Project B was reported with an IRR of 28%. Project C was reported to have a payback period of 23 years. With which of these projects should Narion move forward?

Project C

Project A

Project B

All three sound great!

2 points

QUESTION 14

Which approach to budgeting approach is most effective because lower level employees are involved in the budgeting process?

Top-down budgeting

Master budgeting

Associative budgeting

Participative budgeting

2 points

QUESTION 15

In the budget process, what do we call the estimated number of units to be manufactured (based on sales projections and inventory policies)?

the sales budget

the manufacturing budget

the production budget

the materials budget