129. The lean philosophy attempts to reduce setup times, which will

a.not affect batch sizes

b.increase batch sizes

c.increase within-batch wait time

d.decrease within-batch wait time

128. Which of the following is an example of value-added time?

a.processing time

b.wait time during inspection

c.wait time in inventory

d.none of these choices

125.

Using the following partial table of present value of $1 at compound interest, the present value of $15,000 to be received 3 years hence with earnings at the rate of 6% a year is

Year	6%		10%		12%
1	0.943		0.909		0.893
2	0.890		0.826		0.797
3	0.840		0.751		0.712
4	0.792		0.683		0.636

a.$11,880

b.$13,350

c.$11,265

d.$12,600

124.

When several alternative investment proposals of the same amount are being considered, the one with the largest net present value is the most desirable. If the alternative proposals involve different amounts of investment, it is useful to prepare a relative ranking of the proposals by using a(n) _____ index.

a.consumer price

b.average rate of return

c.present value

d.price-level

123.

The management of River Corporation is considering the purchase of a new machine costing $380,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment:

Year	Operating Income		Net Cash Flow
1	$20,000		$95,000
2	20,000		95,000
3	20,000		95,000
4	20,000		95,000
5	20,000		95,000

The net present value for this investment is

a.$19,875

b.$(19,875)

c.$20,140

d.$(20,140)

122.

The management of River Corporation is considering the purchase of a new machine costing $380,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment:

Year	Operating Income		Net Cash Flow
1	$20,000		$95,000
2	20,000		95,000
3	20,000		95,000
4	20,000		95,000
5	20,000		95,000

The cash payback period for this investment is

a.5 years

b.3 years

c.20 years

d.4 years

121.

The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine which one has the best average rate of return.

	Machine A		Machine B		Machine C
Estimated average income	$40,000		$50,000		$75,000
Average investment	300,000		250,000		500,000

a.Machine C

b.Machine A

c.Machine B

d.Machines B and C have the same preferred average rate of return.

120.

Which of the following statements regarding the cash payback period is true?

a.The longer the payback, the sooner the cash spent on the investment will be recovered.

b.The shorter the payback, the possibility of obsolescence will be less likely.

c.The longer the payback, the longer the estimated life of the asset will be.

d.all of the above

119.

The management of Indiana Corporation is considering the purchase of a new machine costing $400,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability of this investment:

Year	Operating Income		Net Cash Flow
1	$100,000		$180,000
2	60,000		120,000
3	30,000		100,000
4	10,000		90,000
5	10,000		90,000

The average rate of return for this investment is

a.21%

b.53%

c.10%

d.18%

118.

The expected average rate of return for a proposed investment of $4,800,000 in a fixed asset, using straight-line depreciation, with a useful life of 20 years, no residual value, and an expected total net income of $10,560,000 over the 20 years, is

a.10%

b.24%

c.45%

d.22%