Table 11.2 Computer Disk Duplicators, Inc. Has Been Considering Several Capital Investment

question 44

Multiple Choice

Table 11.2
Computer Disk Duplicators, Inc. has been considering several capital investment proposals for the year beginning in 2014. For each investment proposal, the relevant cash flows and other relevant financial data are summarized in the table below. In the case of a replacement decision, the total installed cost of the equipment will be partially offset by the sale of existing equipment. The firm is subject to a 40 percent tax rate on ordinary income and on long-term capital gains. The firm's cost of capital is 15 percent.
________________________________________________________ *Not applicable
-For Proposal 2, the initial outlay equals ________. (See Table 11.2)

• A) $120,720 cash outflow
• B) $164,560 cash outflow
• C) $150,000 cash outflow
• D) $167,520 cash outflow

Understand the definitions and calculations of fixed and variable costs.

Identify and describe the four organizational responses to an uncertain environment.

Understand the purpose and limitations of Management by Objectives (MBO) within an organization.

Recognize the application and functionality of Project Evaluation and Review Technique (PERT) in project management.

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Definitions:

Performance Targets

Specific goals established to evaluate the effectiveness and efficiency of operations or individuals.

Tactical Goals

Short-term objectives designed to implement the broader strategies of an organization, focusing on how to operationalize actions needed to achieve higher level goals.

Objectives

Specific, measurable goals set by an individual or organization aiming to achieve desired outcomes.

Missions

Statements that define the core purpose of an organization, why it exists, and its intentions toward its stakeholders.