Drew Cane Products, Inc., processes sugar cane in batches. The company buys a batch of sugar cane from farmers for $90 which is then crushed in the company's plant at a cost of $11. Two intermediate products, cane fiber and cane juice, emerge from the crushing process. The cane fiber can be sold as is for $21 or processed further for $13 to make the end product industrial fiber that is sold for $45. The cane juice can be sold as is for $41 or processed further for $29 to make the end product molasses that is sold for $103. What is the financial advantage (disadvantage) for the company from processing one batch of sugar cane into the end products industrial fiber and molasses rather than not processing that batch at all?
A. ($39)
B. $5
C. ($143)
D. $44
Answer: B
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Land acquired as a speculation is reported under Investments on the balance sheet
a. True b. False Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
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Boxton Corporation's required rate of return is 12%. The company is considering the purchase of a new machine that will save $20,000 per year in cash operating costs. The machine will cost $128,360 and will have a 10-year useful life with zero salvage value. Straight-line depreciation will be used. (Ignore income taxes.)Refer to Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.Required:Compute the machine's internal rate of return. Would you recommend purchase of the machine?
What will be an ideal response?