Questions from Management Accounting

Q: (a) What is the present value of $8000 received

(a) What is the present value of $8000 received in seven years at 8 per cent interest? (b) Bonnie Lee buys a savings bond for $125. The bond pays 6 per cent and matures in 10 years. What amount will B...

Q: Diamond Ltd agreed to sell some used equipment to one of its

Diamond Ltd agreed to sell some used equipment to one of its employees. Alternative financing arrangements for the sale have been discussed, and the present and future values of each alternative have...

Q: Government supervisors in a remote area of Queensland are considering the purchase

Government supervisors in a remote area of Queensland are considering the purchase of a small, used plane to save on travel costs. The plane will cost $400 000 and can be sold in five years for 20 per...

Q: Overnight Laundry is considering the purchase of a new pressing machine that

Overnight Laundry is considering the purchase of a new pressing machine that would cost $96 000 and produce incremental operating cash flows of $25 000 annually for 10 years. The machine has a termina...

Q: Axel Ltd is planning to buy a new machine with the expectation

Axel Ltd is planning to buy a new machine with the expectation that this investment should earn a rate of return of at least 15 per cent. This machine, which costs $150 000, would yield an estimated n...

Q: If inventory physically increases during the period, income under absorption costing

If inventory physically increases during the period, income under absorption costing will be higher than income using variable costing. Explain.

Q: Garfield Construction is considering replacing an old machine that is currently being

Garfield Construction is considering replacing an old machine that is currently being used. The old machine is fully depreciated, but it can be used for another five years, at which time it would have...

Q: Amaro Hospital, a not-for-profit entity not subject

Amaro Hospital, a not-for-profit entity not subject to income taxes, is considering the purchase of new equipment costing $20 000 to achieve cash savings of $5000 per year in operating costs. The esti...

Q: FreshTucker Limited allows divisional managers to make capital investment decisions up to

FreshTucker Limited allows divisional managers to make capital investment decisions up to $10 million. However, divisional managers are required to send to head office details of each decision taken,...

Q: Refer question 15.23 above. Outline how Ceila might improve

Refer question 15.23 above. Outline how Ceila might improve the investment decision-making model within the hospitality and conference facilities division to cater for strategic investments. Question...