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Question
Pearl Manufacturing is considering an investment in equipment costing $660,000. The equipment will be depreciated on the straight-line basis over an eight-year period with an estimated residual value of $120,000. The investment is expected to generate annual net cash inflows of $135,000 for 8 years. Using the rate of return model, what is the minimum average annual operating income that must be generated from this investment in order to achieve a 14% rate of return?
A) $18,900
B) $37,800
C) $54,600
D) $92,400
Answer
This answer is hidden. It contains 67 characters.
Related questions
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Zygot Biotech Company is budgeting for the 3rd quarter, and provide the following data: Jul
Aug
Sep Cash collections
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$40,000
$48,000 Cash payments: Purchases of inventory
31,000
22,000
18,000 Operating expenses
12,000
9,000
11,600 Capital expenditures
0
19,000
0 The cash balance at June 30 is projected to be $5,600. There are no financing transactions planned in the 3rd quarter. What is the projected cash balance at the end of September?
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B) $12,600
C) $18,000
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Berkeley Products has a cash balance of $20,000 at April 1, 2011. They are now preparing the cash budget for the second quarter. Budgeted cash collections and payments are as follows: Apr
May
Jun Cash collections
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$9,000
$10,500 Cash payments: Purchases of inventory
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4,000 Operating expenses
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5,200
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Q:
Bartholomew Manufacturing Company is preparing the operating budget for the first quarter of 2012. They forecast sales of $50,000 in January, $60,000 in February, and $70,000 in March. Cost of goods sold is budgeted at 40% of Sales. Variable and fixed expenses are as follows:
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A) Cost of goods available for sale
B) Cost of goods sold
C) Sales discounts and Sales returns and allowances
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Q:
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Q:
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Q:
Which of the following is TRUE of a completed worksheet?
A) The total debits in the trial balance column equal the total debits in the adjusted trial balance column.
B) The total debits in the income statement column equal the dividends paid.
C) The total debits in the income statement column equal the total debits in the balance sheet column.
D) The total debits equal the total credits in each column.
Q:
The current ratio and the debt ratio are shown on the income statement.
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Q:
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B) long-term assets.
C) current liabilities.
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Q:
A balance sheet that has the assets listed above the liabilities and equity sections is a(n):
A) report form balance sheet.
B) classified form balance sheet.
C) account form balance sheet.
D) audited form balance sheet.
Q:
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D) $20,000
Q:
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B) Current assets
C) Long-term liabilities
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Q:
Only temporary accounts appear on the post-closing trial balance.
Q:
Only permanent accounts appear on the post-closing trial balance.
Q:
The post-closing trial balance is an optional step.
Q:
When a business makes a cash payment, the cash account is always debited.
Q:
The accounting process of copying a transaction from the journal to the ledger is called:
A) journalizing.
B) posting.
C) proofing.
D) footing.
Q:
A) chart of accounts.
B) ledger.
C) trial balance.
D) journal.
Answer: B
Q:
Which of the following statements about revenue is CORRECT?
A) Revenues decrease owner's equity, so a revenue account's normal balance is a credit balance.
B) Revenues decrease owner's equity, so a revenue account's normal balance is a debit balance.
C) Revenues increase owner's equity, so a revenue account's normal balance is a debit balance.
D) Revenues increase owner's equity, so a revenue account's normal balance is a credit balance.
Q:
The balance of an account is the:
A) amount remaining in an account.
B) account number, as shown in the chart of accounts.
C) sum of the debits only.
D) sum of the credits only.
Q:
Journalizing a transaction means:
A) calculating the balance in an account.
B) finding the account number in the chart of accounts.
C) recording the transaction, including a brief explanation.
D) copying the information from the journal to the ledger.
Q:
In the accounting system, the first place that transactions are recorded is the ledger.
Q:
For liabilities and revenues, a debit increases the account.
Q:
Zennick Fashion Products uses standard costs for their manufacturing division. Standards specify 3.0 direct labor hours per unit of product. At the beginning of the year, the static budget for variable overhead costs included the following data:
Production volume: 1,000 units
Estimated variable overhead costs: $120,000
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At the end of the year, actual data were as follows:
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Actual variable overhead costs: $174,300
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How much is the spending (price) variance for variable overhead?
A) $6,300 Favorable
B) $6,300 Unfavorable
C) $12,000 Favorable
D) $12,000 Unfavorable