Two mutually exclusive alternatives are under consideration, with the same initial investment of $300,000. The difference between the alternatives is in the revenue. Alternative A will earn a fixed revenue of $60,000 per year. The revenue for Alternative B starts slowly at an estimated $10,000 in the first year, with a growth of $15,000 per year. The MARR is 896 per year, and the maximum projection period is 10 years for either alternative. Use: (a) payback analysis to select the more economical alternative. Ans: Select based on payback analysis
(b) present worth analysis (for n=10 years) to select the more economical alternative. Ans: Select based on Present Worth analysis
(c) Is there any difference in selection between the two analysis?Ans:

Miller company’s total sales are $171,000. the company’s direct labor cost is $20,520, which represents 30% of its total conversion cost and 40% of its total prime cost. its total selling and administrative expense is $25,650 and its only variable selling and administrative expense is a sales commission of 5% of sales. the company maintains no beginning or ending inventories and its manufacturing overhead costs are entirely fixed costs. required: 1. what is the total manufacturing overhead cost? 2. what is the total direct materials cost? 3. what is the total manufacturing cost? 4. what is the total variable selling and administrative cost? 5. what is the total variable cost? 6. what is the total fixed cost? 7. what is the total contribution margin?