Accounting Help Please Explain To Me?

roduct A requires 6 machine hours per unit to be produced, Product B requires only 4 machine hours per unit, and the company’s productive capacity is limited to 240,000 machine hours. Product A sells for $18 per unit and has variable costs of $7 per unit. Product B sells for $16 per unit and has variable costs of $5 per unit. Assuming the company can sell as many units of either product it produces, the company should…
Produce A and B in the ratio of 61% A to 39% B.
Produce only Product B.
Produce equal amounts of A and B.
Produce only Product A.
Produce A and B in the ratio of 89% A and 11% B.
Rocko Inc. has a machine with a book value of $55,000 and a five year remaining life. A new machine is available at a cost of $90,000 and Rocko can also receive $43,000 for trading in the old machine. The new machine will reduce variable manufacturing costs by $14,500 per year over its seven year life. Should the machine be replaced?
Yes, because income will increase by $14,500 per year.
No, because the company will be $54,500 worse off.
Rocko will be not be better or worse off by replacing the machine.
Yes, because income will increase by $54,500.
No, because the income will decrease by $14,500 per year.
A given project requires a $29,200 investment and is expected to generate end-of-period annual cash inflows of $12,700 for each of three years. Assuming a discount rate of 12%, what is the net present value of this investment? Selected present value factors for a single sum are shown in the table below.
i = 12% i = 12% i = 12%
n¯1 n¯2 n¯3
.8929 .7972 .7118
$1,304.13
$2,630.53
$30,504.13
($7,498.47)
$0.00

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