Langton Inc A) $18590
B) $197

question 55

Multiple Choice

Langton Inc. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The CEO believes the IRR is the best selection criterion, while the CFO advocates the MIRR. If the decision is made by choosing the project with the higher IRR rather than the one with the higher MIRR, how much, if any, value will be forgone. In other words, what's the NPV of the chosen project versus the maximum possible NPV? Note that (1) "true value" is measured by NPV, and (2) under some conditions the choice of IRR vs. MIRR will have no effect on the value lost. $\begin{array} { c c c c c c } &r = 700 \% \\\text { Year } & 0& 1 & 2 & 3 & 4 \\ \text { CF }_{S} & - \$ 1,100 & \$ 550 & \$ 600 & \$ 100 & \$ 100 \\\text { CF}_{L} & - \$ 2,750 & \$ 725 & \$ 725 & \$ 800 & \$ 1,400\end{array}$

• A) $185.90
• B) $197.01
• C) $208.11
• D) $219.22
• E) $230.32

Identify appropriate allocation bases for different factory overhead activities.

Determine the factory overhead to be allocated per unit under activity-based costing.

Evaluate the advantages of using multiple production department factory overhead rates over a single plantwide rate.

Apply activity-based costing to allocate indirect costs across different products or services.

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Definitions:

Civil Liability

Refers to the legal responsibility of a person or entity for damages or harm caused to another person or entity.

Financial Statements

Documents that provide an overview of a company's financial condition, including balance sheets, income statements, and cash flow statements.

Registration Statement

A registration statement is a set of documents, including a prospectus, filed with the SEC by a company intending to go public, detailing its business and financial status.

Willfully Violates

Refers to the act of intentionally breaking a law or regulation.