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Micro Corp is deciding whether or not to eliminate one of its products, Product A. Sales of the product total $500,000; variable expenses total $325,000

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Micro Corp is deciding whether or not to eliminate one of its products, Product A. Sales of the product total $500,000; variable expenses total $325,000 Fixed expenses charged to the product total $245,000. The company estimates that $60,000 of the fixed expenses are not avoidable even if the product is dropped. If Product A is dropped, the annual financial advantage (disadvantage) for the company of eliminating this product should be: a. $10,000 b. (560,000) c. $70,000 d. ($10,000) The management of Han Corporation is considering purchasing equipment that would increase sales revenues by $279,000 per year and cash operating expenses by $229,000 per year. The equipment would cost $210,000, have no salvage value and a 6 year life, resulting in $35,000 annual depreciation. The simple rate of return on the investment is closest to (Ignore income taxes.): a. 14.0% b.7.1% C. 23.8% d. 4.2%

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