Question : 61. A business considering a cash outlay of $300,000 for the : 1239641

 

 

61. A business is considering a cash outlay of $300,000 for the purchase of land, which it could lease for $36,000 per year. If alternative investments are available which yield an 18% return, the opportunity cost of the purchase of the land is: A. $54,000B. $36,000C. $18,000D. $72,000

 

62. A business is considering a cash outlay of $400,000 for the purchase of land, which it could lease for $40,000 per year. If alternative investments are available which yield a 21% return, the opportunity cost of the purchase of the land is: A. $84,000B. $40,000C. $44,000D. $ 8,400

 

63. A business received an offer from an exporter for 20,000 units of product at $15 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: 

Domestic unit sales price

$21

Unit manufacturing costs:

 

  Variable

12

  Fixed

5

 

 

What is the differential revenue from the acceptance of the offer? A. $300,000B. $420,000C. $120,000D. $240,000

 

64. A business received an offer from an exporter for 10,000 units of product at $17.50 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data is available: 

Domestic unit sales price

$20

Unit manufacturing costs:

 

  Variable

11

  Fixed

1

 

 

What is the differential revenue from the acceptance of the offer? A. $200,000B. $175,000C. $130,000D. $140,000

 

65. A business received an offer from an exporter for 10,000 units of product at $17.50 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data is available: 

Domestic unit sales price

$20

Unit manufacturing costs:

 

  Variable

11

  Fixed

1

 

 

What is the differential cost from the acceptance of the offer? A. $200,000B. $175,000C. $140,000D. $110,000

 

66. A business received an offer from an exporter for 10,000 units of product at $17.50 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data is available: 

Domestic unit sales price

$20

Unit manufacturing costs:

 

  Variable

11

  Fixed

1

 

 

What is the amount of gain or loss from acceptance of the offer? A. $65,000 gainB. $50,000 lossC. $30,000 lossD. $20,000 loss

 

67. A business received an offer from an exporter for 30,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: 

Domestic unit sales price

$22

Unit manufacturing costs:

 

  Variable

11

  Fixed

6

 

 

What is the differential cost from the acceptance of the offer? A. $120,000B. $330,000C. $300,000D. $510,000

 

68. A business received an offer from an exporter for 30,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: 

Domestic unit sales price

$22

Unit manufacturing costs:

 

  Variable

11

  Fixed

6

 

 

What is the amount of the gain or loss from acceptance of the offer? A. $30,000 lossB. $40,000 gainC. $150,000 gainD. $50,000 gain

 

69. Relevant revenues and costs refer to: A. activities that occurred in the pastB. monies already earned and/or spentC. last year’s net incomeD. differences between the alternatives being considered

 

70. Assume that Penguin Co. is considering disposing of equipment that cost $50,000 and has $40,000 of accumulated depreciation to date. Penguin Co. can sell the equipment through a broker for $25,000 less 5% commission. Alternatively, Teal Co. has offered to lease the equipment for five years for a total of $48,750. Penguin will incur repair, insurance, and property tax expenses estimated at $10,000. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is: A. $15,000B. $ 5,000C. $25,000D. $12,500