What is the companys unit contribution margin

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Reference no: EM131694002

Rayburn Industries is evaluating the investment of $137,100in a new packing machine that should provide annual cash operating inflows of $29,340for6years. At the end of6years, the packing machine will be sold for $5,200. Rayburn's required rate of return is8%.

Marilyn's parents have agreed to help her purchase a new car upon graduation in four years. They have given her two choices. The first choice is that they will give her $3,680 each year for the next four years for her to invest herself. The second choice is that they will wait four years and give her $16,510. Marilyn can invest the money at a 3% rate.

(a) Which option should Marilyn choose? (Round present value factor calculations to 4 decimal places, e.g. 1.2512 and final answers to 0 decimal places e.g. 58,971.)

A manufacturer of potting soil has the following financial data:

Pounds produced and sold 24,800
Sales $186,200
Less: Variable manufacturing costs 121,800
         Fixed manufacturing costs 11,000
         Variable selling and administrative costs 29,000
         Fixed selling and administrative costs 14,300
Net operating income $10,100

(a) What is the company's unit contribution margin? (Round answer to 2 decimal places, e.g. 1.64.)

Reference no: EM131694002

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