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Question
Laurel and Hardy are managers of two product lines for Keaton Company. One of them is a candidate for promotion based on performance. Using the data below, determine who had the better performance. Detail your calculations and support your answer.
| Laurel | Hardy | |
| Revenue | $412,000 | $450,000 |
| Costs | 380,000 | 411,000 |
| Average assets | 400,000 | 600,000 |
Answer
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Related questions
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The _______________________________ is computed by discounting the future net cash flows from the investment at the project's required rate of return and then subtracting the initial amount invested.
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The _______________________________ is computed by dividing a project's after-tax net income by the average amount invested in it.
Q:
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Q:
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A. Sell the units as scrap.
B. Rebuild the units.
C. It does not matter because both alternatives have the same result.
D. Neither sell nor rebuild because both alternatives produce a loss. Instead, the company should store the units permanently.
E. Throw the units away.
Q:
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A. Sell the units as scrap.
B. Rebuild the units.
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Q:
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E. $100,000
Q:
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C. Buy Beta since the relevant cost to make it is $48.
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Q:
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D. Sunk cost
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Q:
An additional cost that is incurred only if a particular action is taken is a(n):
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Q:
Periods
12 Percent 1
8929 2
1.6901 3
2.4018 4
3.0373 Assuming all revenue is to be received at the end of each year, what are the net cash flows for this investment if net present value equals ($11,790)?
A. $78,210
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C. $25,750
D. $237,547
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Q:
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B. $(251.52) and Scott would be willing to pay $29,748.48 for the machine.
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Q:
A disadvantage of using the payback period to compare investment alternatives is that:
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B. It includes the time value of money.
C. It cannot be used when cash flows are not uniform.
D. It cannot be used if a company records depreciation.
E. It cannot be used to compare investments with different initial investments.
Q:
A given project requires a $25,000 investment and is expected to generate end-of-period annual cash inflows as follows: Year 1
Year 2
Year 3
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$15,000
$6,000
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i = 10% n = 2
i = 10% n = 3 .9091
.8264
.7513 A. $6,217.50
B. ($4,459.80)
C. ($6,217.50)
D. $8,275.00
E. $0.00
Q:
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B. Internal rate of return, payback period, and accounting rate of return.
C. Accounting rate of return, net present value, and payback period.
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Q:
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A. To eliminate all risk.
B. To discount all future and past cash flows.
C. To earn a satisfactory return on investment.
D. To reverse past decisions.
E. To reduce the number of investment activities.
Q:
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Q:
What is the difference between an opportunity cost and a sunk cost?
Q:
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A. Yes, because income will increase by $14,000 per year.
B. Yes, because income will increase by $23,000 in total.
C. No, because the company will be $23,000 worse off in total.
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E. Rocko will be not be better or worse off by replacing the machine.
Q:
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Dept. R
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$7,000
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2,000
3,000
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1,500
2,500
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5,500
8,500 Net income (loss)
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$1,500
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A. $500 increase
B. $500 decrease
C. $4,000 increase
D. $4,000 decrease
E. $3,500 decrease
Q:
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$75
$62 Variable costs per unit
42
25 A. 15,000 croquet sets.
B. 12,000 volleyball games.
C. 4,000 croquet sets and 10,000 volleyball games.
D. 4,000 croquet sets and 8,800 volleyball games.
E. 2,500 croquet sets and 10,000 volleyball games.
Q:
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$900
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600
675
76 A. Both product A and product B should be processed further.
B. Neither product A nor product B should be processed further.
C. Only product B should be processed further.
D. Only product A should be processed further.
E. A processing further decision cannot be made from the available data.
Q:
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20 Overhead (fixed and variable)
22 Total
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A. Income will decrease by $7 per unit.
B. Income will increase by $7 per unit.
C. Income will increase by $12 per unit.
D. Income will decrease by $12 per unit.
E. Income will increase by $10 per unit.
Q:
A company expects to produce and sell 7,000 units of a single product. The following additional company information is available: Variable costs (per unit) Production costs
$20 Nonproduction costs
$3 Fixed costs (in total) Overhead
$175,000 Nonproduction
$14,000 Compute this companys total cost per unit.
A. $23
B. $45
C. $27
D. $50
E. $5
Q:
Assume markup percentage equals desired profit divided by total costs. What is the correct calculation to determine the dollar amount of the markup per unit?
A. Total cost times markup percentage.
B. Total cost per unit times markup percentage per unit.
C. Total cost per unit divided by markup percentage per unit.
D. Markup percentage per unit divided by total cost per unit.
E. Markup percentage divided by total cost.
Q:
Capital budgeting decisions are generally based on:
A. Tentative predictions of future outcomes.
B. Perfect predictions of future outcomes.
C. Results from past outcomes only.
D. Results from current outcomes only.
E. Speculation of interest rates and economic performance only.
Q:
If net present values are used to evaluate two investments that have equal costs and equal total cash flows, the one with more cash flows in the early years has the higher net present value.