3- In activity-based management, which quality cost would NOT be considered value added? a.internal failures b.Evaluation. c.External faults. d.None of the above.

4- ISO 9000 is a set of international quality standards that are adopted by companies. True

False

20- Durable Incorporated is considering replacing an old drilling machine that cost $200,000 six years ago with a new one that costs $450,000. Shipping and installation cost an additional $60,000. The old machine has been depreciated using the straight-line (SL) method with no salvage value over an estimated 8-year useful life. The old machine can be sold for $40,000 now or $10,000 in two years. Management expects increases in inventories of $10,000, accounts receivable of $32,000, and accounts payable of $12,000 if the new machine is acquired. Durable's income tax rate is expected to be 30 percent over the years affected by the investment.

Required:

What is Durable's net initial investment (i.e., its after-tax initial cash outlay for the machine)? Round answer to nearest whole dollar.