Forensic Specialists Compiled the Following Information for Its First Quarter

question 28

Multiple Choice

Forensic Specialists compiled the following information for its first quarter cost of quality report:
$$\begin{array} { l l } \text { Sales } & \$ 5,600,000 \\\text { Cost of goods sold } & \$ 3,360,000 \\\text { Disposing of scrap } & \$ 235,200 \\\text { Quality training } & \$84,000 \\\text { Inspecting materials on delivery } & \$280,000 \\\text { Performance reviews } & \$ 70,000 \\\text { Resolving customer complaints } & \$ 31,920 \\\text { Certifying suppliers } & \$ 140,000\end{array}$$
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The total cost of prevention activities for Forensic Specialists is:

• A) $294,000.
• B) $224,000.
• C) $459,200.
• D) $504,000.

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Definitions:

Cash Inflows

Money received by a business from its operational activities, investments, or financing.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.

Net Present Value

A financial metric that calculates the current value of all future cash flows generated by a project, minus the initial investment cost.

Working Capital

The difference between a company's current assets and current liabilities, indicating short-term financial health and operational efficiency.