Q&A Hero

Q: The primary focus of an HRM audit is based on: A. motivating customers. B. estimating the costs of implementing an HR practice. C. reviewing the various outcomes of HRM functions. D. determining the dollar value of the HRM program. E. determining the legality of HR practices.

Q: A formal review of the outcomes of HRM functions, based on identifying key HRM functions and measures of business performance, is referred to as a(n) _____. A. balanced scorecard B. profit-and-loss statement C. evidence-based HRM D. job description E. HRM audit

Q: The HR department of an organization can meet the needs of employees by: A. providing qualified staffing. B. conducting performance management. C. hiring people with niche skills. D. providing training and development. E. enforcing labor law regulations.

Q: Which of the following is a way in which the HR department meets the needs of strategic planners? A. They provide them qualified staffing. B. They aid in performance management. C. They introduce rewards systems. D. They provide training and development. E. They enforce labor law regulations.

Q: The HR department meets the needs of line managers by: A. providing qualified staffing. B. assisting in performance management. C. designing a rewards system. D. providing training and development. E. enforcing labor law regulations.

Q: In the context of an organization's human resource division, which of the following statements is true of customers? A. They refer specifically to the organization's shareholders. B. They refer specifically to the organization's offshore clients. C. They usually refer to the top management. D. They refer to the organization as a whole and its other divisions. E. They refer to the labor law enforcement agencies.

Q: Alamos Inc. has extensively made use of the technology called cloud computing for several functions of its HR department. This technology has helped manage department functions, store necessary data, and also has given employees access to the required databases to resolve customer queries and complaints. Which of the following, if true, would disrupt the services provided by this arrangement? A. Internet access in the facility is intermittent for three hours every day. B. An updated version of the cloud is available with more features. C. Many other companies are making use of this device to store and manage data. D. The data stored can be subject to cyber crimes. E. The technology automatically blocks access to those who do not have required credentials.

Q: WingDing Inc. is a popular retailer with outlets in more than 30 cities in the United States. After a recent expansion during which it opened an additional 15 outlets, it was looking to expand its IT infrastructure to accommodate growing data needs. The IT department decided against increasing the capacity of the company's servers. Instead, the team used a third-party hosting service for its data storage needs and for running its applications. The employees at the megastore were allowed access to this information through a web interface. In this scenario, WingDing is employing _____. A. management information systems B. relational database management C. cloud computing D. analytical processing E. decision support systems

Q: Which of the following statements accurately characterizes e-HRM? A. It requires employees to contact an HR staff person when they need information. B. It poses new challenges to employees and new issues for HR managers to address. C. It is less economical compared to traditional HR systems. D. It has unfavorable effects on employee manageability. E. It excludes information-gathering activities of human resource management.

Q: Identify the correct statement regarding e-HRM. A. Most administrative and information-gathering HRM activities can be part of e-HRM. B. E-HRM is less economical than traditional HR systems. C. E-HRM has adversely affected employee manageability. D. The number of organizations actively engaged in e-HRM is steadily decreasing. E. A major drawback of e-HRM is that employees cannot help themselves to the information they need when they need it.

Q: Most human resource information is confidential, so organizations engaging in e-HRM: A. continuously limit the amount and type of information made available to company personnel. B. increasingly place company-specific information on a secure intranet with links to resources on the broader Internet. C. consolidate information into a single file and limit access to the database to top-level personnel within the company. D. do not favor of knowledge sharing within the organization. E. encourage employees to restrict the use of intranet.

Q: Which of the following exemplifies one of the most creative developments in human resource information systems technology? A. Decision support system B. Transactional processing system C. HR dashboard D. Expert system E. Intranet

Q: Which of the following is a vital tool in making confidential HR-related information widely accessible to authorized users within an organization? A. A decision support system B. An expert system C. An intranet D. A transactional processing system E. A judge-advisor system

Q: A leading IT firm experiences a major exodus of production employees department to a rival firm. The firm uses a tool that tracks such movements, which is part of the human resource information system (HRIS). Which of the following tools will help the firm track such data? A. Expert system B. Cloud computing database C. Decision support system D. HR dashboard E. Judge-advisor system

Q: Roger, an HR specialist at Maestro Inc., claims that the department is running exceptionally well because of the HR dashboard. Progress and developments of various tasks are accessed easily using HRIS technology. Which of the following validates Roger's claim? A. Roger believes in using traditional methods rather than new age innovations. B. The HR dashboard can be accessed by employees with little training. C. The dashboard provides an easy-to-scan review of HR performance on a companywide basis. D. The HRIS receives frequent upgrades when there is a sudden increase in data storage. E. Roger has not taken into account that his team has helped in creating satisfying results.

Q: The HR department at TIP Consulting uses a human resource information system (HRIS). The employees of the department can view and track their individual progress as well as the progress that the department has made using HRIS. The component of the HRIS that enables this is called a(n) _____. A. HR banner B. HR bulletin board C. HR showcase D. HR dashboard E. HR scroll

Q: Which of the following refers to a display of a series of HR measures, showing human resource goals and objectives and the progress toward meeting them? A. A performance review template B. A job preview C. An expert system D. An HR dashboard E. A relational database

Q: Identify the advantage of a relational database. A. It facilitates the storage of employee information in a single, large file. B. It replicates the traditional method of filing employee data by name, a system that is strongly preferred by organizations worldwide. C. It helps HR staff in retrieving information about specific applicants. D. It helps people arrive at decisions that reflect expert knowledge. E. It is designed to exclusively meet the needs of the HR department.

Q: A standard feature of a modern HRIS (Human Resource Information Systems) is the use of _____, which store data in separate files that can be linked by common elements. A. graph databases B. hypermedia databases C. relational databases D. unstructured databases E. parallel databases

Q: Which of the following statements is true of expert systems? A. They can only be used by employees who have proven expertise in a certain area. B. They increase errors arising from decision-making biases. C. They are typically unstable. D. They deliver quality at a very high cost. E. They aid in reducing errors that result from fatigue.

Q: A firm's HR department uses a computer system that assists in the selection of candidates to be interviewed for a job opening. The computer system enables the interviewer to act as both an interviewee and interviewer in a simulation, thus providing the HR specialist with comprehensive knowledge about the overall interview and selection process. This computer system is likely to be a(n) _____. A. expert system B. employee retention system C. decision support system D. work-action system E. document management system

Q: _____ are computer systems that incorporate the decision rules used by people who are considered to have proficiency in a certain area. A. Decision support systems B. Expert systems C. E-HRM systems D. Transactional processing systems E. Clouds

Q: The senior management of a firm is undecided about the number of employees needed for its new project. Management uses a network of computer software systems that enables it to know the various possible outcomes required for the formation of the new project team. The type of system most likely to have been used in this case is a(n) _____. A. expert system B. employee retention system C. decision support system D. work-action system E. document management system

Q: A manager wishes to test a range of assumptions on the availability of a certain skill in the labor market. He plans to enter different assumptions or data to check how the likely outcomes alter in accordance with the corresponding change in data. Which of the following is the most suitable system for such a purpose? A. A decision support system B. An expert system C. An e-HRM system D. A transactional processing system E. A transitional matrix

Q: Which of the following best defines decision support systems? A. It refers to computer software systems that allow managers to see how outcomes vary when assumptions or data are altered. B. It is a network of remote servers used to store reusable data. C. It is a network of systems that incorporates decision rules used by people who are considered to have expertise in a certain area. D. It refers to the set of topics on which a human resource information system collects and maintains information. E. It refers to online training and development materials that employees can access at their own convenience from anywhere around the world.

Q: The HR department at AYM Resources is having a tough time documenting its strategies. In addition, irregularities were uncovered when reviewing the training expenses for a new group of employees. As a solution to these issues, the general manager proposes that all policies, decisions, expenses, and other plans be documented thoroughly with the help of computers that would store pertinent data and organizational information. In this scenario, the general manager proposes using _____. A. transformational processing B. expert systems C. decision support systems D. micro processing E. transaction processing

Q: Which of the following refers to the computations and calculations involved in reviewing and documenting HRM decisions and practices? A. E-HRM B. Transaction processing C. Automation D. Expert systems E. Decision support systems

Q: New technology usually involves _____that is, using equipment and information processing to perform activities that had been performed by people. A. downsizing B. outsourcing C. offshoring D. automation E. diversification

Q: To improve the performance of employees at RowYourBoat Inc., the company provides recognition and monetary benefits to those employees whose performance exceeds expectations. This strategy can motivate some employees to perform better. This is an example of a(n) _____ strategy. A. occupational intimacy B. brand alignment C. appraisal D. compensation E. job design

Q: Compensation systems can help create the conditions that contribute to high performance. Consequently, organizations can increase empowerment and job satisfaction by: A. communicating the basis for decisions about pay. B. disassociating compensation from performance measures. C. discouraging negotiations regarding pay. D. limiting employee participation in management. E. limiting the use of gainsharing and profit sharing.

Q: Ronaldo, the general manager of RipnRoll Furniture, believes that each employee must thoroughly understand the goals of the organization. He understands that adhering to the vision and mission of the organization will help increase employee satisfaction and will also result in improved employee performance. Which of the following strengthens Ronaldo's belief? A. The vision and mission of the organization are ethical. B. Understanding the organization's goals helps employees improve their performance. C. Employee performance can be enhanced by keeping costs under control. D. Ronaldo has too many expectations of his employees. E. The organization's goals constantly change.

Q: A media company gives its employees monetary bonuses at the end of the company's fiscal year based on employees' contribution to the firm's financial success. This is a method of: A. including employees in organizational planning. B. disassociating compensation from performance measures. C. disseminating organizational learning. D. increasing employee participation in strategic decision making. E. linking compensation to performance measures.

Q: Winston Memorial Hospital has a well-disciplined and focused staff. Doctors and other health care professionals are taught to follow the organization's policies and guidelines and strictly conduct themselves and their jobs in a manner that reflects the hospital's goals. These policies have helped the hospital gain recognition as one of the best hospitals in the region. This is an example of _____. A. resource management B. performance management C. recruitment and selection D. training and feedback E. job design and job maintenance

Q: One way performance management systems can support organizational goals is by: A. defining and measuring performance in broad behavioral terms. B. linking performance measures to meeting internal and external customers' needs. C. ignoring situational constraints. D. outsourcing those goals to professional behavior management firms. E. choosing business goals based on employees' skills and abilities.

Q: At a high-performance organization, recruitment and selection aim at obtaining the kinds of employees who can thrive in this type of setting. These employees are _____. A. primarily individual contributors B. enthusiastic about knowledge sharing C. averse to risk taking D. averse to experimentation E. averse to taking initiatives

Q: Which of the following selection methods is used by organizations to identify employees who innovate, share ideas, and take initiative? A. Technical proficiency B. Psychological testing C. Structured interview D. Aptitude E. Physical ability

Q: Identify the right HRM practice that can assist firms in becoming a high-performance organization. A. Discipline system is conservative. B. Organizations avoid monitoring employees' satisfaction. C. Selection system is job related and legal. D. Work design encourages rigidity. E. Technology is used sparingly.

Q: ITI Inc., a software company, is currently looking for employees to fill vacant positions. It is looking for prospective candidates who are enthusiastic about work and willing to share their knowledge with their colleagues on various topics related to their field. The HR department is responsible for finding the right type of candidate to fit the roles in the organization. In this scenario, the HR department at ITI Inc. is engaged in _____. A. job design B. training C. performance management D. recruitment and selection E. job search

Q: ThinkBig Inc. has been known for its excellent customer service since its start more than 40 years ago. The founder of the company believes that it is because of the dedicated efforts of his employees. The company boasts of carefully selected employees who, through various tests, are hired based on their skills and their ability to contribute to the organization. The organization has benefited greatly because of its process of selecting employees, which, in turn, has resulted in customer loyalty to the services it provides. Rival companies have envied the type of selection methods the company has used to hire candidates. Which of the following would undermine the recruitment efforts of this company? A. ThinkBig Inc. is not recognized as providing the best customer service. B. Customers feel that there is no room for improvement in terms of service provided by ThinkBig Inc. C. High performers in the company find it difficult to refer their friends to open vacancies in the company. D. Other companies have adopted the same style of recruiting employees as ThinkBig Inc. E. ThinkBig Inc. begins hiring employees without thoroughly assessing their skills and knowledge.

Q: Job design aimed at empowerment: A. is complex. B. limits flexibility. C. includes access to resources. D. increases employee turnover. E. includes a rigid pay structure.

Q: Which of the following is an HRM practice that helps organizations achieve high performance? A. Work is performed by individuals. B. Organization discourages continuous learning. C. Performance management system measures customer satisfaction and quality. D. Pay systems primarily reward loyalty to the company. E. Technology increases costs.

Q: Numerous cases of unethical behavior have been reported in a leading beverage company. Which of the following, if true, would strengthen the reason for the increase in these cases? A. The firm uses only a written code of ethics. B. The firm uses a continuous learning culture. C. The firm failed to use its cloud computing services. D. The employees at the firm experience occupational intimacy. E. The firm excludes ethical behavior in its performance measures.

Q: Unity Inc. sells novelty products to a niche market. With support from the human resources team, the customer services team handles the firm's unique brand and reaches out to specific audiences. To ensure that its product line remains strong, the company's CEO emphasizes team adherence to the ethics and policies of the organization. In this scenario, which of the following methods of employee engagement is the CEO of Unity Inc. encouraging? A. Continuous learning B. Opportunities for career progress C. Recognition for accomplishments D. Brand alignment E. HR analytics

Q: A firm's marketing department plans to introduce a new product into the market. The department invites suggestions from employees about the new product. New employees at the firm are also given an exhaustive orientation by the HR department about the company's vision and goals, and how the firm's products have traditionally formed an integral part of their daily work life. This orientation activity organized by the HR department is an example of _____. A. brand alignment B. brand extension C. brand equity D. brand valuation E. brand earnings

Q: Which of the following processes involves ensuring that HR policies, practices, and programs support or are congruent with an organization's overall culture or brand, including its products and services? A. Brand reinforcement B. Brand alignment C. Crowdsourcing D. Brand dilution E. Corporate social responsibility

Q: Which of the following practices is most likely to enhance occupational intimacy? A. Lowering emphasis on organizational learning B. Narrowing the scope of work C. Setting highly abstract goals D. Establishing rigid and enduring pay structures E. Establishing policies that show concern for employees' needs

Q: James works at a publishing house. He is fond of his work and is a passionate team member. His colleagues show concern for him and his work, and he experiences a positive feeling about his work. In the context of job satisfaction, this feeling experienced by Vincent is known as _____. A. job altruism B. occupational intimacy C. work loyalty D. task obedience E. job compliance

Q: People experience _____ when they love their work, when they and their co-workers care about one another, and when they find their work meaningful. A. burnout B. cognitive job satisfaction C. occupational intimacy D. diminished personal accomplishment E. emotional dissonance

Q: Colin Bleuze, the new CEO of Silver Star, claims that work equals life for him. He believes that when one learns to love his or her job, it will result in job satisfaction. He provides employees with the best amenities the firm can afford, such as a sports center, a health clinic, and other facilities. The results are clear: reduced absenteeism, increased productivity, and an interactive social culture. Which of the following is most likely to cause conflict and dissatisfaction in the work that the employees engage in at Silver Star? A. The employees feel that such amenities are to be enjoyed outside of work. B. The employees are given tasks that vary significantly from their job descriptions. C. The employees demand fewer working hours or more pay. D. Silver Star's major competitor is changing its organizational structure. E. Other companies are trying to replicate Silver Star's approach to employee engagement.

Q: A company is considering two projects, Project A and Project B. The following information is available for each project: Project A Project B Investment........................................... $2,000,000............................ $500,000 Net present value of cash flows $800,000 $300,000 Calculate the profitability index for each project. Based on the profitability index, which project should the company pursue and why?

Q: A company can buy a machine that is expected to have a three-year life and a $30,000 salvage value. The machine will cost $1,800,000 and is expected to produce a $200,000 after-tax net income to be received at the end of each year. If a table of present values of 1 at 12% shows values of 0.8929 for one year, 0.7972 for two years, and 0.7118 for three years, what is the net present value of the cash flows from the investment, discounted at 12%?

Q: A company purchases a machine for $1,000,000. The machine has an expected life of 9 years and no salvage value. The company anticipates a yearly net income of $60,000 after taxes of 30% to be received uniformly throughout each year. What is the accounting rate of return?

Q: A company is evaluating the purchase of a machine for $900,000 with a six-year useful life and no salvage value. The company uses straight-line depreciation and it assumes that the annual net cash flow from using the machine will be received uniformly throughout each year. In calculating the accounting rate of return, what is the company's average investment?

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Q: A company is trying to decide which of two new product lines to introduce in the coming year. The predicted revenue and cost data for each product line follows: Product A Product B Sales............................................................ $80,000 $96,000 Direct materials............................................................ 3,000 6,000 Direct labor............................................................ 30,000 45,000 Other cash operating expenses............................................................ 7,500 9,000 New equipment costs............................................................ 75,000 100,000 Estimated useful life (no salvage)............................................................ 5 years 5 years The company has a 30% tax rate, it uses the straight-line depreciation method, and it predicts that cash flows will be spread evenly throughout each year. Calculate each product's payback period. If the company requires a payback period of three years or less, which, if either, product should be chosen?

Q: A company is considering purchasing a machine for $75,000. The machine is expected to generate a net after-tax income of $11,250 per year. Depreciation expense would be $7,500. What is the payback period for this machine?

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Q: A company must decide between scrapping or rebuilding units that do not pass inspection. The company has 15,000 such units that cost $6 per unit to manufacture. The units were built to satisfy a special order, which must still be satisfied if the defective units are scrapped. The units can be sold as scrap for $2.50 each or they can be reworked for $4.50 each and sold for the full price of $9.00 each. If the units are sold as scrap, the company will have to build 15,000 replacement units and sell them at the full price. Required: (1) What is the net return from selling the units as scrap? (2) What is the net return from reworking and selling the units? (3) Should the company sell the units as scrap or rework them?

Q: A company is planning to introduce a new portable TV to its existing product line. Management must decide whether to make the TV case or buy it from an outside supplier. The lowest outside price is $100. If the case is produced internally, the company will have to purchase new equipment that will yield annual depreciation of $130,000. The company will also need to rent a new production facility at $200,000 a year. At 20,000 cases per year, a preliminary analysis of production costs shows the following: Per Case Direct materials.......................................................... .............................................. $ 40.00 Direct labor.......................................................... ............................................... 32.00 Variable overhead.......................................................... ............................................... 10.00 Equipment depreciation.......................................................... ............................................... 6.50 Building rental .......................................................... ............................................... 10.00 Allocated fixed overhead.......................................................... .............................................. 7.50 Total cost.......................................................... ............................................. $106.00 Required: (1) Determine whether the company should make the cases or buy them from the outside supplier. (2) What decision should be made if only 15,000 cases are needed? (3) What other factors, besides cost, should the company consider?

Q: Peters, Inc. sells a single product and reports the following results from sales of 100,000 units: Sales ($45 unit) ... $4,500,000 Less costs and expenses: Direct materials ($16/unit). $1,600,000 Direct labor ($9/unit).. 900,000 Variable overhead ($3/unit)... 300,000 Fixed overhead ($8.10/unit).......... 810,000 Variable administrative ($4.50/unit). 450,000 Fixed administrative ($4/unit)... 400,000 Total costs and expenses... $(4,460,000) Operating income $ 40,000 A foreign company wants to purchase 15,000 units. However, they are willing to pay only $36 per unit for this one-time order. They also agree to pay all freight costs. To fill the order, Peters will incur normal production costs. Total fixed overhead will have to be increased by $60,000 to pay for equipment rentals and insurance. No additional administrative costs (variable or fixed) will be incurred in association with this special order. Required: (1) Should Peters accept the order if it does not affect regular sales? Explain. (2) Assume that Peters can accept the special order only by giving up 5,000 units of its normal sales. Should Peters accept the special order under these circumstances?

Q: Jorgensen Department Store has three departments: Clothing, Toys, and Jewelry. The most recent income statement, showing the total operating profit and departmental results is shown below: Total Clothing Toys Hardware Sales......................................... $2,100,000 $1,000,000 $600,000 $500,000 Cost of goods sold......................................... (1,260,000) (500,000) (400,000) (360,000) Gross profit......................................... 840,000 500,000 200,000 140,000 Direct expenses......................................... (420,000) (200,000) (100,000) (120,000) Allocated expenses......................................... (350,000) (100,000) (75,000) (175,000) Net income (loss)......................................... $ 70,000 $ 200,000 $ 25,000 $(155,000) Based on this income statement, management is planning on eliminating the hardware department, as it is generating a net loss. If the hardware department is eliminated, the toy department will expand to fill the space, but sales will not change in total, nor will direct expenses. None of the allocated expenses will be avoided, but they will be reallocated. Clothing will be allocated $200,000 of these expenses, and Toys will be allocated $150,000 of these expenses. Prepare a new income statement for Jorgensen Department Store, showing the results if the Hardware Department is eliminated. Should the Hardware Department be eliminated?

Q: A company has just received a special, one-time order for 1,000 units. Producing the order will have no effect on the production and sales of other units. The buyer's name will be stamped on each unit, at a total cost of $2,000. Normal cost data, excluding stamping, follows: Direct materials $ 10 per unit Direct labor.. 16 per unit Variable overhead 4 per unit Allocated fixed overhead. 12 per unit Allocated fixed selling expense 8 per unit What selling price per unit will this company require to earn $3,000 on the order?

Q: Fleming Company had the following results of operations for the past year: Sales (10,000 units at $6.80).......................................... $ 68,000 Materials and direct labor.......................................... (20,000) Overhead (40% variable).......................................... (10,000) Selling and administrative expenses (all fixed) (6,000) Operating income.......................................... $ 32,000 A foreign company (whose sales will not affect Fleming's regular sales) offers to buy 2,000 units at $5.00 per unit. In addition to variable manufacturing costs, there would be shipping costs of $1,200 in total on these units. Should Fleming take this order? Explain.

Q: A company inadvertently produced 6,000 defective portable CD players. The CD players cost $20 each to be manufactured. A salvage company will purchase the defective units as they are for $16 each. The production manager reports that the defects can be corrected for $9 per unit, enabling the company to sell them at the regular price of $30.00. The repair operations would not affect other production operations. Prepare an analysis that shows which action should be taken.

Q: For each of the capital budgeting methods listed below, place an X in the correct column, indicating the measurement basis of each, the ability to make comparison among projects, and whether each method reflects or ignores the time value of money. Measurement Basis Comparison among projects Time value of money Cash flows Accrual income Allows comparison Difficult to compare Reflects time value of money Ignores time value of money Payback period Accounting rate of return Net present value _ Internal rate of return

Q: Identify at least three reasons for managers to favor the internal rate of return (IRR) over other capital budgeting approaches.

Q: You have evaluated three projects using the net present value (NPV) method. How would you decide which one of the projects to select?

Q: What is one advantage and one disadvantage of using the accounting rate of return to evaluate investment alternatives?

Q: When making capital budgeting decisions, companies usually prefer shorter payback periods. Explain why shorter payback periods are desirable.

Q: Briefly describe both the payback period method and the net present value method of comparing investment alternatives.

Q: How does the calculation of break-even time (BET) differ from the calculation of payback period (PBP)?

Q: Good management accounting indicates that projects be evaluated using relevant data. In choosing among alternatives, what factors (considerations) are relevant?

Q: In using the internal rate of return method, management must consider a hurdle rate in making its decisions. What is a hurdle rate? What factors does management have to consider in selecting a hurdle rate?

Q: Briefly describe the time value of money. Why is the time value of money important in capital budgeting?

Q: What is capital budgeting? Why are capital budgeting decisions often difficult and risky?

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Q: Presented below are terms preceded by letters a through g and followed by a list of definitions 1 through 7. Match the letter of the term with the definition. Use the space provided preceding each definition. (a) Net Present Value (b) Capital Budgeting (c) Accounting Rate of Return (d) Net Cash Flow (e) Internal Rate of Return (f) Payback Period (g) Hurdle Rate ______ (1) A discount rate that results in a net present value of zero. ______ (2) Cash inflows minus cash outflows for the period. ______ (3) A minimum acceptable rate of return. ______ (4) The time expected to pass before the net cash flows from an investment equals its initial cost. ______ (5) Annual after-tax net income divided by annual average investment. ______ (6) A process of analyzing alternative long-term investments. ______ (7) Initial cost of an investment subtracted from discounted future cash flows from the investment.

Q: A machine costs $180,000 and is expected to yield an after-tax net income of $10,800 each year. Management estimates the machine will have a ten-year life, a $20,000 salvage value, and straight-line depreciation is used. Compute the accounting rate of return for the investment. A. 12.0%. B. 26.8%. C. 11.8%. D. 10.8%. E. 28.8%.

Q: Eagle Company is considering the purchase of an asset for $100,000. It is expected to produce the following net cash flows. The cash flows occur evenly throughout each year. Compute the payback period for this investment. (Round to two decimal places.) Annual Net Cash Flows Year 1 $40,000 Year 2 $40,000 Year 3 $35,000 Year 4 $35,000 Year 5 $30,000 A. 2.85 years. B. 2.57 years. C. 3.00 years. D. 2.50 years. E. 3.62 years.

Q: A new manufacturing machine is expected to cost $286,000, have an eight-year life, and a $30,000 salvage value. The machine will yield an annual incremental after-tax income of $35,000 after deducting the straight-line depreciation. Compute the accounting rate of return for the investment. A. 22.2%. B. 23.4%. C. 46.9%. D. 12.2%. E. 24.5%.