Geico is considering expanding an existing plant on a piece of land it already owns. the land was purchased 15 years ago for $325,000 and its current market appraisal is $820,000. a capital budgeting analysis shows that the plant expansion has a net present value of $130,000. the expansion will cost $1.73 million, and the discounted cash inflows are $1.86 million. the expansion cost of $1.73 million does not include any provision for the cost of the land. the manager preparing the analysis argues that the historical cost of the land is a sunk cost, and, since the firm intends to keep the land whether or not the expansion project is accepted, the current appraisal value is irrelevant. should the land be included in the analysis? if so, how?

Oceanside marine company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor. oceanside uses standard costs to prepare its flexible budget. for the first quarter of the year, direct materials and direct labor standards for one of their popular products were as follows: direct materials: 2 pound per unit; $ 11 per pound direct labor: 2 hours per unit; $ 19 per hour oceanside produced 2 comma 000 units during the quarter. at the end of the quarter, an examination of the direct materials records showed that the company used 7 comma 500 pounds of direct materials and actual total materials costs were $ 98 comma 100. what is the direct materials cost variance? (round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

You are evaluating two different silicon wafer milling machines. the techron i costs $285,000, has a three-year life, and has pretax operating costs of $78,000 per year. the techron ii costs $495,000, has a five-year life, and has pretax operating costs of $45,000 per year. for both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $55,000. if your tax rate is 24 percent and your discount rate is 11 percent, compute the eac for both machines.

Afinancing project has an initial cash inflow of $42,000 and cash flows of −$15,600, −$22,200, and −$18,000 for years 1 to 3, respectively. the required rate of return is 13 percent. what is the internal rate of return? should the project be accepted?