What is the payback period in years on the machine

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Reference no: EM132890377

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Q1. Glare Company is considering the purchase of a new machine for $150,000. The machine generates annual revenues of $62,500 and annual expenses of $42,000, which include $8,100 of depreciation. What is the payback period in years on the machine approximated to one decimal point?

a. 5.2 years

b. 2.1 years

c. 1.4 years

d. 4.3 years

Q2. Los Gatos Shop is considering the purchase of a used wide-format printer costing $9,600. The wide-format printer would generate a net cash inflow of $4,000 per year for three years. At the end of three years, the printer would have no salvage value. The company's cost of capital is 10 percent. The company uses straight-line depreciation with no mid-year convention. What is the net present value for the press, assuming no taxes are paid?

a. $9,948

b. $348

c. $9,600

d. $2,400

Q3. On a profit-volume graph, the intersection of the profit line with the vertical axis provides a

a. profit equal to fixed costs.

b. profit equal to zero.

c. profit of $1,000.

d. loss equal to fixed costs.

Q4. In 2018, Samantha's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000, and a net loss of $4,500.

?The annual sales volume required for Samantha's to have a before-tax income of $18,000 is

a. $84,000.

b. $42,000.

c. $73,500.

d. $126,000.

Q5. The following information is available for Woodside Furniture Company, which sells two products:

Chair X Chair Y

Processing time 4 hours 6 hours

Metal used 30 sq. ft. 18 sq. ft.

Selling price $200.00 $100.00

Variable cost $150.00 $60.00

Fixed cost $30.00 $30.00

There are 200 hours available in the plant and 200 square feet of metal available per operating period.

What is the objective function for maximizing sales?

a. Minimize 200X + 100Y

b. Maximize 200X + 100Y

c. Maximize 180X + 90Y

d. Maximize 50X + 40Y

Reference no: EM132890377

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