21 . ( TCO 10 ) Shirt Company wants to purchase a new cutting machine for its sewing plant . The investment is expected to generate annual cash inflows of $ 500,000 . The required rate of return is 12 % and the current machine is expected to last for four years . What is the maximum dollar amount Shirt Company would be willing to spend for the machine , assuming its life is also four ……….. ( Points : 5 ) 21 . ( TCO 10 ) The Zeron Corporation wants to purchase a new machine for its factory operations at a cost of $ 950,000 . The investment is expected to generate $ 350,000 in annual cash flows for a period of four years . The required rate of return is 14 %. The old machine can be sold for $ 50,000 . The machine is expected to have zero value at the end of the four-year period . What is the net present value of the investment ? Would the company want to purchase the new machine ? Income taxes are not considered . ( Points : 5 ) 21 . # TCO 10 # The Zeron Corporation wants to purchase a new machine for its factory operations at a cost of $ 950,000 . The investment is expected to generate $ 400,000 in annual cash flows for a period of four years . The required rate of return is 12 %. The old machine can be sold for $ 50,000 . The machine is expected to have zero value at the end of the four-year period . 22 . ( TCO 11 ) The four cost categories in a cost of quality program are ( Points : 5 ) 22 . ( TCO 11 ) An advantage of financial cost of quality measures is that they ( Points : 5 ) 23 . ( TCO 11 ) Regal Products has a budget of $ 900,000 in 20X6 for prevention costs . If it decides to automate a portion of its prevention activities , it will save $ 60,000 in variable costs . The new method will require $ 18,000 in training costs and $ 120,000 in annual equipment costs . Management is willing to adjust the budget for an amount up to the cost of the new equipment . The budgeted production level is 150,000 units . Appraisal costs for the year are budgeted at $ 600,000 . The new 24 . ( TCO 12 ) The costs associated with storage are an example of which …..? ( Points : 5 ) 25 . ( TCO 12 ) Liberty Celebrations , Inc ., manufactures a line of flags . The annual demand for its flag display is estimated to be 100,000 units . The annual cost of carrying one unit in inventory is $ 1.60 , and