Posted: May 4th, 2016

What is the accounting rate of return on original investment rounded to the nearest percent, assuming no taxes are paid?

ndirect labor (variable) 6
Other variable factory overhead 10
Fixed factory overhead 28
Variable selling expenses 20
Fixed selling expenses 14

During the period, the company produced and sold 1,000 units.

What is the inventory cost per unit using variable costing?
a. $52
b. $62
c. $42
d. $70

16. Meulo Company is considering the purchase of production equipment that costs $800,000. The equipment is expected to generate an annual cash flow of $250,000 and have a useful life of five years with no salvage value. The firm’s cost of capital is 12 percent. The company uses the straight-line method of depreciation with no mid-year convention. There are no income taxes.

The payback period in years for the project is
a. 2.90 years.
b. 3.20 years.
c. 3.25 years.
d. 4.20 years.

17. Dunkin, Inc., is considering the purchase of production equipment that costs $300,000. The equipment is expected to generate an annual cash flow of $100,000 and have a useful life of five years with no salvage value. The firm’s cost of capital is 14 percent. The company uses the straight-line method of depreciation with no mid-year convention. Ignore income taxes.

Payback for the project is
a. 5.00 years.
b. 3.50 years.
c. 3.00 years.
d. 2.38 years.

18. Hunziker Company is considering the purchase of wood cutting equipment. Data on the equipment are as follows:

Original investment $45,000
Net annual cash inflow $18,000
Expected economic life in years 5
Salvage value at the end of five years $4,500

The company uses the straight-line method of depreciation with no mid-year convention.

What is the accounting rate of return on original investment rounded to the nearest percent, assuming no taxes are paid?
a. 40%
b. 73%
c. 22%
d. 24%

19. Holloway Company is considering the purchase of a new machine for $40,000. The machine would generate an annual cash flow before depreciation and taxes of $15,647 for four years. At the end of four years, the machine would have no salvage value. The company’s cost of capital is 12 percent. The company uses straight-line depreciation with no mid-year convention and has a 40

Expert paper writers are just a few clicks away

Place an order in 3 easy steps. Takes less than 5 mins.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00
Live Chat+1-631-333-0101EmailWhatsApp