The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine the best average rate of return. Which machine has the best average rate of return? Machine A Machine B Machine C Estimated average annual income $ 40,000 $ 50,000 $ 75,000 Average investment 300,000 250,000 500,000 Oa. Machine A Ob. Machine C Oc. Machine B Od. Machines A and B se this information for Nebraska Corporation to answer the question that follow. the management of Nebraska Corporation is considering the purchase of a new machine costing $490,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for Years 1 through 5 are 0.909, .826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability: Income from Operations Pear Net Cash Flow $180,000 1 $100,000 40,000 2 120,000 3 40,000 100,000 90,000 4 10,000 5 10,000 120,000 The average rate of return for this investment is Oa. 58% Ob. 18% Oc. 16% Od. 10% Heidi Company is considering the acquisition of a machine that costs $513,920. The machine is expected to have a useful life of six years, a negligible residual value, an annual net cash flow of $116,800, and annual operating income of $73,000. What is the estimated cash payback period for the machine (round to one decimal point)? Oa. 2.7 years Ob. 7.0 years Oc. 4.4 years Od. 1.6 years company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $210,000. The present value of the future cash flows is $225,000. The company's desired rate of return used in the present value alculations was 12%. Which of the following statements is true? Oa. The internal rate of return on the project is more than 12%. Ob. The project should not be accepted because the net present value is negative. Oc. The internal rate of return on the project is equal to 12%. Od. The internal rate of return on the project is less than 12%. The management of Idaho Corporation is considering the purchase of a new machine costing $430,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for Years 1 through 5 are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Income from Operations Net Cash Flow Year 1 $100,000 $180,000 120,000 2 40,000 3 20,000 100,000 4 10,000 90,000 90,000 5 10,000 The net present value for this investment is Oa. $(99,600) Ob. $25,200 Oc. $16,400 Od. $(126,800) Use these present value tables to answer the question that follow. 1 Below is a table for the present value of $1 at Compound interest. Year 6% 10% 12% 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 0.792 0.683 0.636 5 0.747 0.621 0.567 Below is a table for the present value of an annuity of $1 at compound interest. 4 un Year 6% 10% 12% 1 0.943 0.909 0.893 2 1.833 1.736 1.690 3 2.673 2.487 2.402 4 3.465 3.170 3.037 4.212 3.791 3.605 Using the tables above, what is the present value of $15,051.00 (rounded to the nearest dollar) to be received at the end of each of the next four years, assuming an earnings rate of 12%? Oa. $45,710 Ob. $15,051 Oc. $54,259 Od. $36,153
