Ieso company has two stores j and k during novenber ieso

Reference no: EM13599407

1) Treads Corporation is considering the replacement of an old machine that is currently being used. The old machine is fully depreciated but can be used by the corporation for five more years. If Treads decides to replace the old machine, Picco Company has offered to purchase the old machine for $60,000. The old machine would have no salvage value in five years.

The new machine would be acquired from Hillcrest Industries for $1,000,000 in cash. The new machine has an expected useful life of five years with no salvage value. Due to the increased efficiency of the new machine, estimated annual cash savings of $300,000 would be generated.

Treads Corporation uses a discount rate of 12%.

Q:The internal rate of return of the project is closest to: A: 14%, B:16%, C:18%, D:20%

2)Reardon Retail Company consists of two stores, A and B. Store A had sales of $80,000 during March, a contribution margin ratio of 30%, and a segment margin of $11,000. The company as a whole had sales of $200,000, a contribution margin ratio of 36%, and segment margins for teh two stores totaling $31,000. If net operating income for the company was $15,000 for the month, the traceable fixed expenses in Store B must have been:

A:$16,000

B:$20,000

C:$31,000

D:$28,000

3) Ieso Company has two stores: J and K. During Novenber, Ieso Company reported a net operating income of $30,000 and sales of $450,000. The contribution margin in Store J was $100,000, or 40% of sales. The segment margin in Store K was $30,000 or 15% of sales. Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K.

Variable Expenses in Store K totaled:

A:$70,000

B:$110,000

C:$200,000

D:$130,000

Reference no: EM13599407

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