Q2 Total operating expenses$90,125Net operating income$34,875Required:1. Compute payback period off the truck. Is the investment in new truckdesirable if maximum desired payback period of the Euro Transportcompany is 5 years?2. Compute the accounting rate of return promised by the truck. Would theEuro Transport company be interested in new truck if minimum requiredaccounting rate of return is 12%?Q3- The Sunshine company is considering two projects, project A andproject B. Project A requires the purchase of an equipment but noworking capital investment whereas project B requires a working capitalinvestment but no equipment. The relevant information for net presentvalue analysis is given below:Project A Project B$600,000Cost of equipmentWorking capital neededAnnual cash inflows$600,000$160,000 $120,000$40,000Salvage value (scrap value) of equipmentProject lifeThe working capital required for project B will be released at the end ofproject life. Sunshine company uses an 18% discount rate.Required: Are the two projects comparable using net present value(NPV)? If yes, Select the best investment using net present value (NPV)8 years8 Yearsmethod.Q4- PQR company sells two products. The total fixed expenses of thecompany are 1,197,000. The monthly data of PQR is as follows:ProductsProduct AProduct BTotal$1,400,000 $600,000 $2,000,000Sales Al-Balqa Applied UniversityAmman University CollegeAdvanced Managerial AccountingAdvanced cost and Managerial AccountingFinal Exam27/01/ 2022Name:Q1- You have the following data for the four products ( A,B,C,D):PRODUCT VARIABLE FIXED TOTALNETCONTRIBUTION SALES INCOSTCOSTCOSTPROFIT MARGIN RATIODOLLAR300M30%1500700K100012005008001200R.F3002002000Required:Find the unknown values?.Q2 - The Euro Transport company wants to purchase a new truck. Theof its 20-year useful life. The annual estimated revenues and costs$125,000truck would cost $225,000 and its salvage value would be 10% at the endassociated with the new truck are given below:RevenuesLess operating expenses:$20,000$45,000$10,125$15,000MaintenanceDriver's salaryDepreciationInsurance

Payaback Period = Cost of the truck ÷ Net Annual cashflows = $225,000 ÷…

Required: 1. Compute payback period of the truck. Is the investment in new truck desirable if maximum desired payback period of the Euro Transport company is 5 years? 2. Compute the accounting rate of return promised by the truck. Would the Euro Transport company be interested in new truck if minimum required accounting rate of return is 12%?

Required: 1. Compute payback period of the truck. Is the investment in new truck desirable if maximum desired payback period of the Euro Transport company is 5 years? 2. Compute the accounting rate of return promised by the truck. Would the Euro Transport company be interested in new truck if minimum required accounting rate of return is 12%?

Accounting (Text Only)

26th Edition

ISBN:9781285743615

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter21: Cost Behavior And Cost-volume-profit Analysis

Section: Chapter Questions

Problem 21.26EX: Items on variable costing income statement In the following equations, based on the variable costing...

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