### Rate of Return And NPV – Homework – Accounting & Finance

The key terms in these Finance Chapters include Rate of Return, NPV, Costs, Accounts Receivables, Bad Debts, Allowance for Doubtful Accounts, Cowboy Ice Cream. Homework – Accounting & Finance

A company has two different investment opportunities, both requiring an initial payment of \$150,000.  The company’s desired rate of return is 10%.

What is the NPV of Project B?

26,859.5

A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that \$24,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of \$675. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Correct

##### Explanation

A company has two different investment opportunities, both requiring an initial payment of \$150,000.  The company’s desired rate of return is 10%.

Which project would you recommend based on NPV?

A

B

A company has two different investment opportunities, both requiring an initial payment of \$150,000.  The company’s desired rate of return is 10%.

What is the NPV of Project B?

26,859.5

Rubio, Inc. is considering eliminating one of its segments.  The segment incurs the following fixed costs.  If the segment is eliminated, the building it uses will be sold.

Identify the relevant costs associated with the segment. (Select all that apply)

Book value of building

Maintenance costs on equipment

##### Supervisory Salaries

Allocation of company-wide facility costs

Original cost of building

Real estate taxes on building

Market value of building

What was Cowboy Ice Cream’s sales volume variance, and was it favorable or unfavorable?

500; favorable

\$32,000; favorable

\$33,750; unfavorable

\$1,750; unfavorable

\$33,750; favorable

\$32,000; unfavorable

\$4,000; favorable

500; unfavorable

\$2,250; favorable

\$2,250; unfavorable

\$1,750; favorable

\$4,000; unfavorable

A company has two different investment opportunities, both requiring an initial payment of \$150,000.  The company’s desired rate of return is 10%.

What is the NPV of Project B?

26,859.5

A company has two different investment opportunities, both requiring an initial payment of \$150,000.  The company’s desired rate of return is 10%.

Which project would you recommend based on NPV?

A

B

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