The Cook Corporation has two divisions--East and West. The divisions have the following revenues and expenses:

	East			West
Sales	$	576,000		$	491,500
Variable costs		189,000			260,500
Traceable fixed costs		173,500			196,400
Allocated common corporate costs		123,900			143,100
Net operating income (loss)	$	89,600		$	(108,500	)

The management of Cook is considering the elimination of the West Division. If the West Division were eliminated, its traceable fixed costs could be avoided. Total common corporate costs would be unaffected by this decision. Given these data, the elimination of the West Division would result in an overall company net operating income (loss) of:

Multiple Choice

• $89,600

• $(108,500)

• $(18,900)

• $(53,500)

Perkins Corporation is considering several investment proposals, as shown below:

		Investment Proposal
	A			B			C			D
Investment required	$	152,000		$	190,000		$	114,000		$	142,500
Present value of future net cash flows	$	182,400		$	285,000		$	159,600		$	336,000

If the project profitability index is used, the ranking of the projects from most to least profitable would be:

Multiple Choice

• B, D, C, A

• A, C, B, D

• D, B, C, A

• B, D, A, C