Customers of a retailing business are known as wholesalers

Flint Systems is considering investing in production-management software that costs $630,000, has $67,000 residual value, and leads to cost savings of $1,650,000 per year over its five-year life

Calculate the average amount invested in the asset that should be used for calculating the accounting rate of return. A) $697,000 B) $630,000 C) $348,500 D) $67,000

DM Corporation has provided you with the following budgeted income statement for one of its products

Sales revenue $700,000 Variable costs (430,000 ) Contribution margin $270,000 Fixed costs (320,000 ) Operating loss $(50,000 ) DM has just encountered environmental problems with the product and will be forced to drop the product line altogether. DM will be able to eliminate 70% of the fixed costs. What will be the impact on operating income of the company? A) Operating income will decrease by $224,000. B) Operating income will decrease by $46,000. C) Operating income will increase by $224,000. D) Operating income will increase by $46,000.