Rayburn Industries is evaluating the investment of $137,100in a new packing machine that should provide annual cash operating inflows of $29,340for6years. At the end of6years, the packing machine will be sold for $5,200. Rayburn's required rate of return is8%.
Marilyn's parents have agreed to help her purchase a new car upon graduation in four years. They have given her two choices. The first choice is that they will give her $3,680 each year for the next four years for her to invest herself. The second choice is that they will wait four years and give her $16,510. Marilyn can invest the money at a 3% rate.
(a) Which option should Marilyn choose? (Round present value factor calculations to 4 decimal places, e.g. 1.2512 and final answers to 0 decimal places e.g. 58,971.)
A manufacturer of potting soil has the following financial data:
| Pounds produced and sold |
24,800 |
| Sales |
$186,200 |
| Less: Variable manufacturing costs |
121,800 |
| Fixed manufacturing costs |
11,000 |
| Variable selling and administrative costs |
29,000 |
| Fixed selling and administrative costs |
14,300 |
| Net operating income |
$10,100 |
(a) What is the company's unit contribution margin? (Round answer to 2 decimal places, e.g. 1.64.)