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# 2 Finance Questions: how much must be invested now if you can earn 14% rate of return? Lusk Company - if Product A is discontinued, the company's overall net operating income would be...?

60. (Ignore income taxes in this problem.) In order to receive \$12,000 at the end of three years and \$10,000 at the end of five years, how much must be invested now if you can earn 14% rate of return?
A) \$12,978. C) \$13,290.
B) \$8,100. D) \$32,054.

61.Lusk Company produces and sells 15,000 units of Product A each month. The selling price of Product A is \$20 per unit, and variable expenses are \$14 per unit. A study has been made concerning whether Product A should be discontinued. The study shows that \$70,000 of the \$100,000 in fixed expenses charged to Product A would continue even if the product was discontinued. These data indicate that if Product A is discontinued, the company's overall net operating income would:
A) decrease by \$60,000 per month. C) increase by \$20,000 per month.
B) increase by \$10,000 per month. D) decrease by \$20,000 per month.

#### Solution Preview

Posting ID: 54349
Business, Accounting/Business Analysis/Financial Reporting Other rate of return & net operating income Bid Credits: 3 Deadline: November 5, 2005, 9:18 pm EST

60. (Ignore income taxes in this problem.) In order to receive \$12,000 at the end of three years and \$10,000 at the end of five years, how much must be invested now if you can earn 14% rate of return?
A) \$12,978. C) \$13,290.
B) \$8,100. D) ...

#### Solution Summary

You will find the answer to this puzzling question inside...

\$2.19