A new machine can be purchased for $1,200,000. It will cost $35,000 to ship and $15,000 to modify
the machine.
A $12,000 recently completed feasibility study indicated that the firm can employ an
existing factory owned by the firm, which would have otherwise been sold for $180,000. The firm
will borrow $750,000 to finance the acquisition. Total interest expense for 5-years is expected to
approximate $350,000. What is the investment cost of the machine for capital budgeting purposes?
A) $1,430,000 B) $2,180,000 C) $1,442,000 D) $1,780,000
A
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Given a current ratio of 5 to 3, what is the effect of paying a supplier within 30 days of the purchase?
a. The current ratio would increase. b. The current ratio would decrease. c. The current ratio would remain the same. d. Unable to determine.
The following set of items describes activities completed by a company in collecting cash for merchandise sales. For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. An employee in the accounting department records cash receipts from customers and prepares a bank deposit slip
a. Adheres to sound internal control procedures b. Violates sound internal control procedures c. Neither strengthens nor violates internal control
Cheryl, age 16, ordered a new dress to wear to the school prom. She has contracted to pay $500 when the dress arrives. Before the dress arrives, Cheryl decides that the dress is too expensive. If she now wishes to cancel the order, Cheryl:
A) must pay $500 for the dress because the dress was specially ordered for Cheryl. B) must pay $500 for the dress because clothing is classified as a necessity. C) may disaffirm this executory contract. D) must accept the dress and pay the reasonable value of the dress.
Morals are rules people develop as a result of cultural values and norms.
Answer the following statement true (T) or false (F)