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26) Supply the missing data for each of the following proposals. Proposal AProposal BProposal C Initial investment(a)$62,900$226,000 Annual net cash inflow$60,000(c)(e) Life in years10610 Salvage value$0$10,000$0 Payback period in year(b)(d)5.65 Internal rate of return12%24%(f) 27) Book & Bible Bookstore desires to buy a new coding machine to help control book inventories. The machine sells for $36,586 and requires.
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20.4   Apply the concept of relevance to DCF methods of capital budgeting. 1) Initial machine investment costs include cash outflows for installation and transportation. 2) Relevant cash flows are expected future cash flows that differ among the alternative uses of investment funds. 3) In determining whether to keep a machine or replace.
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28) Hentgen and Ferraro, baseball consultants, are in need of a microcomputer network for their staff. They have received three proposals, with related facts as follows: Proposal AProposal BProposal C Initial investment in equipment$90,000$90,000$90,000 Annual cash increase in operations: Year 180,00045,00090,000 Year 210,00045,0000 Year 345,00045,0000 Salvage value000 Estimated life3 yrs.3 yrs.1 yr. The company uses straight-line depreciation for all.
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21) Criticism of backflush accounting included all of the following EXCEPT A) WIP exists but is not recorded. B) GAAP is not followed for external reporting purposes. C) there is an absence of audit trails. D) the accounting system cannot pinpoint the uses of resources. E) managers can keep track of operations by personal observation. 22).
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27) Corry Corporation manufactures filters for cars, vans, and trucks. A backflush costing system is used and standard costs for a filter are as follows: Direct materials $2.60 Conversion costs 4.20    Total $6.80 Filters are scheduled for production only after orders are received, and are shipped immediately upon completion. This results in product costs being charged.
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19.4   Differentiate a materials requirements planning (MRP) strategy from an enterprise resource planning (ERP) strategy of supply-chain management. 1) The term, supply-chain, describes the flow of goods, services and information from cradle to grave, regardless of whether those activities occur in the same organization or in other organizations. 2) An Enterprise Resource.
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20.1   Apply the concept of the time value of money to capital budgeting decisions. 1) In capital budgeting decisions, revenues and costs are analyzed over the short-run. 2) Accrual accounting measures income on a year-to-year basis. 3) Cost systems with an exclusive period-by-period focus are more likely to identify project costs over multiple.
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31) Vision Enterprises manufactures converter boxes for high definition TVs. All processing is initiated when an order is received. For March there were no beginning inventories. Conversion costs and direct materials are the only manufacturing cost accounts. Direct materials are purchased under a just-in-time system and there was no variance..
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14) EIF Manufacturing company needs to overhaul its drill press or buy a new one. The facts have been gathered, and are as follows: Current New machine        Purchase price, new$80,000$100,000 Current book value30,000 Overhaul needed now 40,000 Annual cash operating costs 70,000 40,000 Current salvage value20,000 Salvage value in five years 5,00020,000 Required: Based on present value.
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20.6   Apply the concept of defensive strategic investment to the capital budgeting process. 1) Net present value can be used to examine the effects of alternative ways of increasing customer loyalty. 2) Defensive strategies can be difficult to quantify because opportunity costs are difficult to predict. 3) Companies should make decisions concerning investing.
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35) Garden Equipment Manufacturing Ltd. (GEM) has introduced a just-in-time production process and is considering the adoption of lean accounting principles to support its new production philosophy. The company has two product lines: lawnmowers and weed whackers. Two individual products are made in each line. The company's traditional cost accounting.
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19) Terrain Vehicle has received three proposals for its new vehicle painting machine. Information on each proposal is as follows: Proposal XProposal YProposal Z Initial investment in equipment$180,000$120,000$190,000 Working capital needed  0 010,000 Annual cash saved by operations: Year 175,00050,00080,000 Year 275,00048,00080,000 Year 375,00044,00080,000 Year 475,0008,00080,000 Salvage value end of year: Year 1100,00080,00060,000 Year 280,00060,00050,000 Year 340,00040,00030,000 Year 410,00020,00015,000 Working capital returned0010,000 Required: Determine each.
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51) The Zero Machine Company is evaluating a capital expenditure proposal that requires an initial investment of $20,960 and has predicted cash inflows of $5,000 per year for 10 years. It will have no salvage value. Required: a.Using a required rate of return of 16%, determine the net present value of the.
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For each of the following items tell whether the increase in order size caused an increase, a decrease, or no change. A) no change B) increase C) decrease 80) average inventory 81) cost of goods sold 82) number of orders per year 83) total annual carrying costs 84) total annual ordering costs 19.2   Resolve conflicts that can arise from.
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11) Management control systems motivate managers and other employees to exert effort through a variety of rewards tied to the achievement of goals. 12) A benefit of decentralization should be increased motivation of subunit managers. 13) One benefit of centralization is an increase in development of an experienced pool of.
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22) Jensen Manufacturing Ltd. is considering buying a laser machine which costs $250,000. It requires working capital of $25,000 which will be returned at the end of the project. Annual cash savings are anticipated to be $103,000 for five years. The salvage value at the end of five years is.
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18) The Jarvis Corporation produces bucket loader assemblies for the tractor industry. The product has a long term life expectancy. Jarvis has a traditional manufacturing and inventory system. Jarvis is considering the installation of a just-in-time inventory system to improve its cost structure. In doing a full study using its.
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19.3   Analyze the relevant benefits and costs of JIT alternatives. 1) Just-in-Time (JIT) Production is also called "lean production." 2) Just-in-Time (JIT) Production is a system in which each component on a production line is produced immediately as needed by the next step in the production line. 3) The lack of buffer inventory.
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21) Kretzinger Company makes extensive use of financial performance reports for each of its departments. Although most departments have been reporting favourable cost variances with the company's current inventory system, management is concerned about the overall performance of the purchasing and production departments. For example, the following information is for.
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11) Lean accounting is a costing method that supports creating value for customers by costing the value streams, as distinguished from individual products or departments,thereby eliminating waste in the accounting process. 12) Traditional budgeted and standard costing systems use A) backflush costing. B) delayed costing. C) post-deduct costing. D) synchronous tracking. E) variable costing. Use the information.
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Use the information below to answer the following question(s). Neptune Ltd. wants to expand its operations by manufacturing a new product line. New equipment will cost $225,000. Incremental sales are estimated at $150,000 per year for 6 years. Variable costs of producing the new product line are 52% of sales and.
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21) Brown Corporation recently purchased a new machine for $339,013.20. The new equipment has a useful life of 10 years. Net cash flows will be $60,000 per year, end of year payments. What is the internal rate of return? A) 10 percent B) 12 percent C) 14 percent D) 16 percent E) 18 percent 22) Soda Manufacturing.
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19.5   Evaluate and decide upon an appropriate backflush costing method. 1) Sequential tracking refers to a method of costing in which the accounting system entries occur at the same order as actual purchases and products. 2) Backflush costing describes a costing system that omits recording some journal entries. 3) Backflush costing is an.
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30) The president of Silicon Company has just returned from a week of professional development courses and is very excited that she will not have to change the organization from a centralized structure to a decentralized structure just to have responsibility centres. However, she is somewhat confused about how responsibility.
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54) Lion Enterprises Inc. is evaluating 3 investment alternatives. Each alternative requires a cash outflow of $102,000. The cash inflows are summarized below (ignore taxes): Project A Project B Project C Year 1 $55,000 $30,000 $0 Year 2 $40,000 $30,000 $0 Year 3 $20,000 $30,000 $45,000 Year 4 $5,000 $30,000 $55,000 Year 5 $2,000 $30,000 $65,000 The company has a required rate of return of 9%. Required: Evaluate and rank each alternative using net present value.
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20.5   Assess the complexities in capital budgeting within an interdependent set of value-chain business functions. 1) The payback method measures the time required to recoup the total dollars invested in the project through cash inflows. 2) The payback method discounts cash flows prior to the payback date. 3) The accrual accounting rate of.
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79) Discuss considerations that should be fully taken into account when developing inventory related relevant costs for use in an economic order quantity (EOQ) model. Due to unprecedented growth during the year Denise's Flowers decided to use some of its surplus cash to increase the size of several inventory order quantities.
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33) Falcon Industries manufactures customized industrial compounds. All processing is initiated when an order is received. For April there were no beginning inventories. Conversion costs and direct materials are the only manufacturing cost accounts. Direct materials are purchased under a just-in-time system. Journal entries are recorded at three trigger points.
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11) Cost analysis has two dimensions, which are A) financial and non-financial. B) present and the future. C) project and financial. D) project and non-financial. E) project and time. 12) Life cycle costing is the accounting system that corresponds to A) the non-financial dimension of costs analysis. B) the project dimension of costs analysis. C) the cost dimension of.
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21.1   Integrate the accounting internal control system assurance framework with existing legislation. 1) A management control system is a means of gathering and using information to aid and coordinate the process of making planning and control decisions throughout the organization, and to guide employee behaviour. 2) Subunit managers are better informed about.
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21) The costs, as opposed to benefits, of decentralization include all of the following, except A) management development and learning. B) duplication of output. C) increased costs of information-gathering. D) focus of manager's attention on the subunit rather than the company as a whole. E) suboptimal decision making. 22) Which of the following is FALSE concerning.
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11) Which of the following methods is used when production is driven by downstream workstations? A) an activity-based systems B) a just-in-time system C) a product-need system D) a station-priority system E) safety system 12) All of the following are potential financial benefits of just-in-time EXCEPT A) lower investments in inventories. B) higher investments in "efficient" storage space. C).
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29) Jefferson Ltd. is considering the acquisition of new production equipment. If purchased, the new equipment would cost $1,850,000. Installation and testing costs would be $35,000 and $25,000 respectively. Once operational, the equipment will cause an increase in working capital of $120,000. The new equipment is expected to generate increased.
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31) Which of the following are not considered in capital-budgeting? A) initial machine investment B) depreciation C) cash flow from current disposal of old machine D) cash flow from terminal disposal of new machine E) recurring after-tax operating flows 32) Which of the following is not a relevant cash flow in capital budgeting? A) after-tax cash flow.
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20.2   Evaluate discounted cash flow (DCF) and non-DCF methods to calculate rate of return (ROR). 1) Internal rate of return is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time. 2) The.
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57) What conflicts can arise between using discounted cash flow methods for capital budgeting decisions and accrual accounting for performance 58) Retail Outlet is looking for a new location near a shopping mall. It is considering purchasing a building rather than leasing, as it has done in the past. Three.
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13) Xanadu Manufacturing Ltd. (XML) has two main customers in its' Eastern Canada division. The current year is 2016 and the company is evaluating its' customers current and projected profitability taking the time value of money into consideration. XML has a required rate of return of 12%. The customer gross margins.
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