AFB Corp needs to replace an old lathe with a new, more efficient model. The old lathe was
purchased for $50,000 nine years ago and has a current book value of $5,000.
(The old machine is
being depreciated on a straight-line basis over a ten-year useful life.) The new lathe costs $100,000.
It will cost the company $10,000 to get the new lathe to the factory and get it installed. The old
machine will be sold as scrap metal for $2,000. The new machine is also being depreciated on a
straight-line basis over ten years. Sales are expected to increase by $8,000 per year while operating
expenses are expected to decrease by $12,000 per year. AFB's marginal tax rate is 40%. Additional
working capital of $3,000 is required to maintain the new machine and higher sales level. The new
lathe is expected to be sold for $5,000 at the end of the project's ten-year life. What is the
incremental free cash flow during years 2 through 10 of the project?
A) $15,800 B) $14,400 C) $16,400 D) $13,600
C
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In a lock-box system ________.
A) customers send their checks directly to a post office box that belongs to the company B) there is a delay in getting the cash into the company's bank account C) a bank employee empties the box daily and records the deposits into the company's bank account D) a bank employee records the journal entry
Equipment should be evaluated for possible replacement only as it nears the end of its useful life.
Answer the following statement true (T) or false (F)
All of the following are benefits of direct marketing for sellers EXCEPT ________
A) access to small groups or individuals B) program flexibility C) mass reach and immediate returns D) low cost E) easy to personalize products
For the Knights of Labor, the central conflict that needed to be won was between:
A. Workers and their employers. B. Anyone considered a "producer" (i.e., farmers, shopkeepers, and employers) and those who controlled money (i.e., bankers, stockbrokers, lawyers). C. Workers and those who controlled money (i.e., bankers, stockbrokers, lawyers, employers). D. Workers and government officials.