Smith Corporation is involved in the evaluation of a new computer-integrated manufacturing system. The system has a projected initial cost of $1,000,000 . It has an expected life of six years, with no salvage value, and is expected to generate annual cost savings of $250,000 . Based on Smith Corporation's analysis, the project has a net present value of $57,625. Refer to Smith Corporation. What
is the project's profitability index?
a. 1.058
b. .058
c. .945
d. 1.000
A
PI = $1,057,625/1,000,000 = 1.058
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A company's ending inventory of finished goods has a cost of $45,000 and consists of 750 units. If the overhead applicable to these goods is $8,400, and overhead is applied at the rate of 60% of direct labor cost, what is the cost of the direct materials used to produce these units?
What will be an ideal response?
Agreements by which the seller or lessor of a product conditions the agreement upon the buyer's or lessee's promise not to deal in a competitor's goods are:
a. tying arrangements. b. exclusive dealing arrangements. c. attempts to monopolize. d. None of these.
Regret is the difference between the payoff from the:
A) best decision and all other decision payoffs. B) worst decision and all other decision payoffs. C) best decision and the worst decision payoffs. D) none of the above
The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used, representing the expense of using the assets, is called:
A. The expense recognition (matching) principle. B. An accrued account. C. A contra account. D. Depreciation expense. E. Accumulated depreciation.