Sayer Tool Co. is considering investing in specialized equipment costing $700,000. The equipment has a useful life of five years and a residual value of $65,000. Depreciation is calculated using the straight line method. The expected net cash inflows from the investment are given below: Year 1 $205,000 2 155,000 3 166,000 4 95,000 5 89,000 $710,000 What is the accounting rate of return on the investment? (Round your answer to two decimal places.) A. 3.92% B. 4.72% C. 4.29% D. 1.96% Maritime Sail Makers manufactures sails for sailboats. The company has the capacity to produce 37,000 sails per year and is currently producing and selling 25,000 sails per year. The following information relates to current production: $185 Sales price per unit Variable costs per unit: Manufacturing Selling and administrative Total fixed costs: Manufacturing Selling and administrative $60 $20 $700,000 $300,000 If a special pricing order is accepted for 5,600 sails at a sales price of $150 per unit, fixed costs remain unchanged, and there are no variable selling and administrative costs for this order, what is the change in operating income? A. Operating income increases by $392,000. B. Operating income decreases by $504,000. C. Operating income increases by $504,000. D. Operating income decreases by $392,000. Bella, Inc. manufactures two kinds of bagstotes and satchels. The company allocates manufacturing overhead using a single plantwide rate with direct labor cost as the allocation base. Estimated overhead costs for the year are $25,250. Additional estimated information is given below. Direct materials cost per unit Direct labor cost per unit Number of units Totes $31 $51 500 Satchels $40 $62 400 Calculate the predetermined overhead allocation rate. (Round your answer to two decimal places.) A. 98.22% B. 50.20% C. 99.02% D. 1.61%