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Shaylee Corporation has $2.00 million to invest in new projects. The company's managers have presented a number of possible options that the board must prioritize.
Shaylee Corporation has $2.00 million to invest in new projects. The company's managers have presented a number of possible options that the board must prioritize. Information about the projects follows: Requlred: 1. Is Shaylee able to invest in all of these projects simultaneously? 2-a. Calculate the profitability index for each project. 2-b. What is Shaylee's order of preference based on the profitability index? Complete this question by entering your answers in the tabs below. 2-A. Calculate the profitability index for each project. Note: Round your answers to 4 decimal places. 2B. What is Shaylee's order of preference based on the profitability index? Blowing Sand Company has just received a one-time offer to purchase 10,200 units of its Gusty model for a price of $34 each. The Gusty model normally sells for $40 and costs $36 to produce ( $29 in variable costs and $7 of fixed overhead). Because the offer came during a slow production month, Blowing Sand has enough excess capacity to accept the order. Requlred: 1. Should Blowing Sand accept the special order? 2. Calculate the increase or decrease in short-term profit from accepting the special order. Blowing Sand Company produces the Drafty model fan, which currently has a net loss of $50,000 as follows: Eliminating the Drafty product line would eliminate $71,000 of direct fixed costs. The $60,000 of common fixed costs would be redistributed to Blowing Sand's remaining product lines. Requlred: Will Blowing Sand's net operating income increase or decrease if the Drafty model is eliminated? By how much
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