The data for an investment center is given below. 1/1/22 $ 300,000 3,000,000 Current assets Plant assets Idle plant assets Land held for future use The controllable margin is $780,000. 250,000 1,200,000 12/31/21 $ 500,000 4,000,000 330,000 1,200,000

Consider the two mutually exclusive investment projects given in the table below for which MARR = 9%. On the basis of the IRR criterion, which project would be selected under an infinite planning horizon with project repeatability likely? ●● Screen Shot 2017-04-20 at 3.22.38 PM ✓ Click the icon to view the cash flows for the investment projects. The rate of return on the incremental investment is %. (Round to one decimal place.) View Zoom Share n 0 1 2 3 IRR Highlight Rotate Markup. Net Cash Flow Project A - $5,000 3,000 4,000 4,000 49.39% Project B - $10,500 9,500 9,500 50.57% Q Search Search

Patricia Gomez owns a company called Ceram-Lite which manufactures ceramic kitchenware. Over the past 10 years, Ceram-Lite has enjoyed steady growth. However, recently, there has been increased competition in kitchenware as a result of successful TV shows like Celebrity Chef. Gomez, Ceram-Lite's CEO, believes an aggressive strategy will be needed to meet the company's goals. You have been provided with the following information for the current year (2022) for Ceram- Lite's flagship Dutch Oven dish, which Gomez has indicated will be the focus product for the upcoming holiday season: Variable Costs (per dutch oven) Direct Materials Direct Manufacturing Labour Variable Overhead (manufacturing, marketing, distribution, and customer service) Total Variable cost per dutch oven Fixed Costs Selling Price Expected Sales Income tax rate Manufacturing Marketing, distribution, and customer service Total Fixed Costs 50,000 units 555 $ $ $ 18 30 28 76 $ 18,000 $ 155,760 $ 173,760 $ 88 $4,399,500 38%

Question 6 Which one of the following methods predicts the amount by which the value of a firm will change if a project is accepted? O Payback O Profitability index O Net present value O Internal rate of return O Discounted payback