A company is considering purchasing a machine for $21,000. The machine will generate an after-tax net income of $2,000 per year. Annual depreciation expense would be $1,500. What is the payback period for the new machine?

A. 4 years.
B. 6 years.
C. 42 years.
D. 14 years.
E. 10.5 years.


Answer: B

Business

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Matamoros, Inc., manufactures and sells two products: Product D7 and Product J3. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected ProductionDirect Labor-Hours Per UnitTotal Direct Labor-HoursProduct D76005.03,000Product J31007.0700Total direct labor-hours  3,700The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:  EstimatedExpected ActivityActivity Cost PoolsActivity MeasuresOverhead CostProduct D7Product J3TotalLabor-relatedDLHs$66,1933,0007003,700Machine setupssetups 65,772400500900Order sizeMHs 153,9323,0002,8005,800  $285,897   If the company allocates all of its

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Business

Daisy and Arlie are Star Wars fans. They were talking about the Clone Wars after a business class recently and debating whether the clones were mass produced through an analytical process or synthetic process. Daisy was confused about what mass production is. Which of the following best represents the definition of mass production?

A. Mass production is a manufacturing process that breaks raw materials into different component parts. B. Mass production is a manufacturing process that combines raw materials or components to create a finished product. C. Mass productionis a manufacturing process that lowers the cost required to produce a large number of identical or similar products over a long period of time. D. Mass production is a manufacturing process that produces tangible goods that customers want.

Business