The management of Hansley Corporation is investigating an investment in equipment that would have a useful life of 5 years. The company uses a discount rate of 18% in its capital budgeting. Good estimates are available for the initial investment and the annual cash operating outflows, but not for the annual cash inflows and the salvage value of the equipment. The net present value of the initial investment and the annual cash outflows is -$273,300. (Ignore income taxes.)Refer to Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.Ignoring any salvage value, to the nearest whole dollar how large would the annual cash inflow have to be to make the investment in the equipment financially attractive?
A. $87,400
B. $273,300
C. $54,660
D. $49,194
Answer: A
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Answer the following statements true (T) or false (F)
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Replacement parts for machinery are examples of ______.
A. direct material purchases B. indirect material purchases C. centralized purchases D. decentralized purchases
The four categories of product quality costs are
a. warranty, product liability, training and apprisal. b. external failure, internal failure, prevention and carrying. c. external failure, internal failure, training and apprisal. d. external failure, internal failure, prevention and apprisal.
Unlike optimization models, simulation provides:
A) recommendations. B) operating characteristics. C) suggestions. D) solutions .