1. The Pantry Vending Machine Company is looking to expand its business by adding a new line of vending machines. The management team is considering expanding into soda machines or snack machines. The following are the relevant financial data related to the decision:

	soda Machines	mouthpiece Machines
Investment	$77,000	$60,000
Useful life (years)	4	12
Estimated annual net cash inflows for useful life	$10,000	$12,000
Valor residual	$30,000	$20,000
depreciation method	straight line	straight line
return fee required	8%	10%

What is the present value of all future cash inflows from the snack machines and the residual value?

2. The following information was collected for the Wesley Corporation for the most recent year. Manufacturing overhead is allocated using direct labor hours.

Estimated direct labor hours	40.500
Actual direct labor hours	51,800
Estimated general manufacturing costs	$840,000
Actual manufacturing overhead costs	$ 985,700

How much manufacturing overhead would be allocated for the year?

Answer rating: 100% (QA)

1 To calculate the present value of future cash inflows from the snack machines we can use the formu... View the full answer