Question

6. Spring Corp.hato . D al Tulip Dubodieduces spati could use is its production. To by purchases 100 po s tepen Daffodils variable o p erate the cost $35 Dube for $13 cach. Ir Duflod is opening the full capacity, the transfer price Daffodil would c o ntender A. 56.00 B. 59.35 C. $12.50 D) $13.00 7. Hiawatha Corp is desidering the purchase of the the equipment would rest e n ahdowe 300.000 The equipment. If the hurdle is what is the pro p os e stom ST 8% er 6 years is 4633 A. 5924,600 B. 524.600 C. $900.000 D $300.000 s 8. Smitty Corp word e of equipment. The e project would have A ccounting of 1. a payback period e C. a t present of Dan pret value greater than t e purchase y e, the The discount rate that would return A Amalie of return B Accounting rate of return C, Hunde D) Internal of s 10. Hiawatha Corp is considering the purchase the equipment would rein c have an initial cost of $900.000 d e equipment What is the pay back per A 133 years B. 2.57 years C. 4.50 years D. 6.00 years wiece n t. The co m in cash flow of $200,000. The questi eur . There is tovage value for the

Answer 1

I think you want to ask the last question 10 .

Cost savings from equipment = $200000

Depreciation of equipment = $900000/6 = $150000

So cash flow = $200000+$150000 = $350000

Payback period = initial investment / cash flow

= $900000/$350000

= 2.57 years

That is option B

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