QUESTION 16 LCO:6 Green Lawn Company is considering a special order for 1,000 new sprinkler systems from a new customer, a foreign distributor. The foreign distributor is offering to purchase the sprinkler systems for $1,200 each from Green Lawn Company. Green Lawn Company currently sells them for $2,000. Green Lawn Company has excess capacity. It costs Green Lawn Company $1,000 in variable costs and $500 in fixed costs for each unit. They will not incur any additional fixed costs due to this order. If Green Lawn Company accepts this order, Net Income will be affected by how much? Increase by $200,000 Increase by $300,000 Decrease by $200,000 Decrease by $300,000 QUESTION 17 LCO:6 Ana Sews is considering purchasing new Industrial Sewing Equipment. What is the Net Present Value of this investment given the following information and present value tables? Investment Cost: 150,000 Annual Cash Inflows: $30,000 Life of Equipment: 8 years Salvage Value at the end of 8 years: $10,000 1096 Required return on investments Present Value of 1 Present Value of an Annuity of 1 Periods 89 1996 1096 Periods 1896 1996 1096 7 .5835 .5470 .5132 5.2064 15.0330 4.8684 -5403 1.5002 1.4632 .5019 1.4604 1.4224 1.4241 13855 5.7466 5.5348 5.3349 16.2469 15.9952 15.7590 16.7101 16.4177 16.1446 ho To $14,712 $67,344 $164,712 $633,396