Oriole, Inc. is considering the purchase of a new machine for $640000 that has an estimated useful life of 5 years and no salvage value. The machine will generate net annual cash flows of $112000. It is believed that the new machine will reduce downtime
because of its reliability. Assume the discount rate is 8%. In order to make the project acceptable, the increase in cash flows per year
resulting from reduced downtime must be at least
Year
1
2
3
4
Present Value PV of an Annuity
of 1 at 8% of 1 at 8%
.926
.926
.857
1.783
.794
2.577
.735
3.312
.681
3.993
5
O $24389 per year.
O $47968 per year.
O $19568 per year.
$48280 per year.
C
M M
No

Oerstman, inc. uses a standard costing system and develops its overhead rates from the current annual budget.the budget is based on an expected annual output of 120,000 units requiring 480,000 direct labor hours.(practical capacity is 500,000 hours)annual budgeted overhead costs total $772,800, of which $556,800 is fixed overhead.a total of 119,300 units, using 478,000 direct labor hours, were produced during the year.actual variable overhead costs for the year were $260,400 and actual fixed overhead costs were $555,450.required: 1. compute the fixed overhead spending variance and indicate if favorable or unfavorable.2. compute the fixed overhead volume variance and indicate if favorable or unfavorable.

Because the demand for wheat tends to be inelastic. true or false

Which of the following is a competitive benefit experienced by the first mover firm in an industry? a. the first mover will be able to achieve a less steep learning curve. b. the first mover will be able to reduce the switching costs. c. the first mover will not have to patent its products or technology. d. the first mover will be able to reduce costs through economies of scale.