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Show all work Elizabeth Pharmaceutical produces several medicines. Each compound can be sold at the split-off point or processed further. The following results apply to

Show all work

Elizabeth Pharmaceutical produces several medicines. Each compound can be sold at the split-off point or processed further. The following results apply to March:

Product

Sales Value at Split-off Point

Costs of Additional Processing

Sales Value After Additional Processing

Savior I

$19,000

$ 5,300

$26,000

Savior II

23,500

10,500

33,000

Savior III

16,000

9,500

25,000

Product

Incremental

revenue

Incremental cost

Profit or loss from

Additional processing

Savior I

_________

$ 5,300

_________

Savior II

_________

10,500

_________

Savior III

__________

9,500

__________

After determining which products should be sold at the split-off point and which should be processed further, the TOTAL REVENUE provided by these three products would be

a.

$84,000. b.$58,500 c. $77,000 d. $65,500

The minimum rate of return on an investment is also known as a

a.

hurdle rate.

b.

payback rate.

c.

net present value.

d.

profit margin.

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