1. You are provided with the following details:

Ending merchandise inventory	$10,000
Sales	$200,000
Merchandise purchases	$39,500
Cost of goods sold	$100,000

How much must beginning merchandise inventory have been?

A) $70,500

B)$120,000

C) $50,500

D) $170,500

2.

The electricity cost for a manufacturing facility is fixed at $2,000 for the month. The cost would be classified as which of the following?

		Period cost = Yes; Product cost = Yes
		Period cost = Yes; Product cost = No
		Period cost = No; Product cost = No
		Period cost = No; Product cost = Yes

3. A company is considering a project with a cost of $2,520,000 and a 7-year life. There would be no salvage value at the end of 7 years. Annual net operating income (ignoring taxes) would be as shown in the below table:

Sales	$2,000,000
Variable expenses	$1,350,000
Contribution margin	$650,000
Fixed Cash expenses	$300,000
Depreciation	$180,000
Net operating income	$170,000

The company's required rate of return is 11%.

Given the above details, what is the project's payback period?

		14.8 years
		3.9 years
		7.2 years
		3.6 years