Ignoring the Cash Inflows,to the Nearest Whole Dollar How Large

question 90

Multiple Choice

Ignoring the cash inflows,to the nearest whole dollar how large would the salvage value of the equipment have to be to make the investment in the equipment financially attractive?

• A) $625,400
• B) $1,518,333
• C) $273,300
• D) $49,194

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, indicating how much contributes to covering fixed costs and generating profit.

Indirect Costs

Expenses not directly tied to a specific product or service, such as overhead, administrative salaries, and utilities.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues.

Department Contribution Margin

A measure of a department's profitability, calculated as the difference between its sales and variable costs.