Showing 411 to 420 of 837 Questions
  • Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 18% each of the last three years. He has computed the cost and revenue estimates for each prod

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  • Luckinbill Inc. intends to invest in one of two competing types of computer-aided manufacturing equipment, built by two different manufacturers: CAM X and CAM Y. Both CAM X and CAM Y models have a project life of 10 years. The purchase price of the CAM X model is $1,200,000; and has a net annual after-tax cash inflow of $300,000. The CAM

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    168
  • Ludlow Company is considering the introduction of a new product line. Would an increase in the income tax rate tend to make the new investment more or less attractive? Explain.

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  • Lugano’s Pizza Parlor is considering the purchase of a large oven and related equipment for mixing and baking “crazy bread.” The oven and equipment would cost $120,000 delivered and installed. It would be usable for about 15 years, after which it would have a 10% scrap value. The following additional information is available:a. Mr.

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  • Lukow Products is investigating the purchase of a piece of automated equipment that will save $400,000 each year in direct labor and inventory carrying costs. This equipment costs $2,500,000 and is expected to have a 15-year useful life with no salvage value. The company’s required rate of return is 20% on all equipment purchases. Manag

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  • Lumine Company is considering purchasing new equipment for $350,000. The equipment has a 5-year useful life, and depreciation would be $70,000 (assuming straight-line depreciation and zero salvage value). The purchase of the equipment should increase net income by $40,000 each year for 5 years. (a) Compute the annual rate of return.(b) Co

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  • Lumine Company is considering purchasing new equipment for $350,000. The equipment has a 5-year useful life, and depreciation would be $70,000 (assuming straight-line depreciation and zero salvage value). The purchase of the equipment should increase net income by $40,000 each year for 5 years. (a) Compute the annual rate of return.(b) Co

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    218
  • Maize Company incurs a cost of $35 per unit, of which $20 is variable, to make a product that normally sells for $58. A foreign wholesaler offers to buy 6,000 units at $31 each. Maize will incur additional costs of $2 per unit to imprint a logo and to pay for shipping. Compute the increase or decrease in net income Maize will realize by a

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    296
  • Manny Carson, certified management accountant and controller of Wakeman Enterprises, had been given permission to acquire a new computer and software for the company’s accounting system. The capital investment analysis showed an NPV of $100,000; however, the initial estimates of acquisition and installation costs were made on the basis

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  • Manson Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making a subassembly part for its finished product. A supplier offers to make 10,000 of the assembly part at $6 per unit. If the offer is accepted, Manson will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Manso

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