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laiz [17]
3 years ago
15

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 the 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 Income from Operations Net Cash Flow1 $20,000 $95,0002 $20,000 $95,0003 $20,000 $95,0004 $20,000 $95,0005 $20,000 $95,000
The cash payback period for this investment is:
a. 5 yearsb. 4 yearsc. 3 yearsd. 20 years
Business
1 answer:
Westkost [7]3 years ago
6 0

Answer:

option (b) 4 years

Explanation:

Data provided in the question:

Cost of the new machine = $380,000

Annual cash flow = $95,000

Rate of return = 6% = 0.06

The present value factor = 4.212

Now,

The cash payback period for this investment

= [ Amount invested ] ÷ [ Annual Net cash flow]

= $380,000 ÷ $95,000 per year

= 4 years

Hence,

The answer is option (b) 4 years

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Answer:

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Eduardwww [97]

Question:                                      

                                                            standard total cost        Actual total cost

Direct material

Standard  2000 pints  $3.50/pint                   $7,000

Actual      2,500 pints   $5.00/pint                                                       $12,000

Answer:

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Explanation:

<em>Material quantity variance occurs when the actual quantity used to achieved a given level of output is more or less than the standard quantity.  </em>

<em>It is determined by the difference between the actual and standard quantity of material for the actual level of output multiplied by the the standard price  </em>

                                                                                               pints

Standard quantity allowed                                                  2,000

Actual quantity used                                                           <u> 2,500</u>

Quantity variance                                                                 500 unfavorable

Standard price                                                                     <u> $3.50 </u>

Materials quantity​ variance                                               <u>1,750  </u>unfavorable

Materials quantity​ variance= $1,750 unfavorable

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