Reference no: EM132604168

Question 1) Moore Company reported sales of $175,000 (25,000 units). Fixed costs amounted to $30,000 and income for the period was $80,000. Determine the per-unit variable cost.

Question 2) Michaels, Inc., purchased a machine for $75,000. The machine has a useful life of five years and no salvage value. Straight-line depreciation is to be used. The machine is expected to generate cash flow from operations, net of income taxes, of $30,000 in each of the five years. Michaels' expected rate of return is 10%. Information on present value factors is as follows:

Period               Present value of $1 at 10%               Present value of ordinary annuity of $1 at 10%

1                                   0.90909                                           0.90909

2                                   0.82645                                            1.73554

3                                    0.75132                                          2.48685

4                                      0.68301                                      3.16986

5                                     0.62092                                       3.79079

What would be the net present value?