Advanced Cost Accounting

  1. The City of Miami is about to replace an old fire truck with a new vehicle in an effort to save maintenance and other operating costs. Which of the following items, all related to the transaction, would not be considered in the decision? (Points : 5) Savings in operating costs as a result of the new vehicle. Proceeds from disposal of the old vehicle. Purchase price of the new vehicle. Purchase price of the old vehicle.
  2. Susan Jackson is considering buying a machine to produce silk-screened T-shirts. The following estimated data are available for her proposed project: Cost of the machine: $16,000 Annual net cash flows generated: 5,000 Salvage value of the machine : 1,000 Useful life of the machine: 5 years Minimum required return: 10% The net present value of this investment opportunity is: (Points : 5) $3,955 $6,746 $3,576 $2,955
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