PLEASE ANSWER BOTH THIS IS MY LAST QUESTION PLEASEEEEE!!!!

1. The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow:

	Total	Dirt Bikes	Mountain Bikes	Racing Bikes
Sales	$ 927,000	$ 266,000	$ 403,000	$ 258,000
Variable manufacturing and selling expenses	465,000	112,000	200,000	153,000
Contribution margin	462,000	154,000	203,000	105,000
Fixed expenses:
Advertising, traceable	69,300	8,200	40,900	20,200
Depreciation of special equipment	43,500	20,900	7,300	15,300
Salaries of product-line managers	115,300	40,800	38,900	35,600
Allocated common fixed expenses*	185,400	53,200	80,600	51,600
Total fixed expenses	413,500	123,100	167,700	122,700
Net operating income (loss)	$ 48,500	$ 30,900	$ 35,300	$ (17,700)

*Allocated on the basis of sales dollars.

Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out.

Required:

1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes?

2. Should the production and sale of racing bikes be discontinued?

3. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines.

2. Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The companys discount rate is 16%. After careful study, Oakmont estimated the following costs and revenues for the new product:

Cost of equipment needed	$ 150,000
Working capital needed	$ 64,000
Overhaul of the equipment in two years	$ 10,000
Salvage value of the equipment in four years	$ 14,000
Annual revenues and costs:
Sales revenues	$ 290,000
Variable expenses	$ 140,000
Fixed out-of-pocket operating costs	$ 74,000

When the project concludes in four years the working capital will be released for investment elsewhere within the company.

Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.

Required:

Calculate the net present value of this investment opportunity. (Round your final answer to the nearest whole dollar amount.)

RXH1H11 12B-1 Fresnt Valae ef 5 H iCl+FM1 RNHIHIT 12R-2 Present Valae of an Anneity of $1 in Arrears; 1/1(1+(1N(1+D))