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Quantity = 3000 X 120% = 3,600
SP = 50 x 110% = 55
Quantity x SP = 198,000
Less: Returned Sales = (6%x198,000)
Sales Projection = $186,120
Beginning Inventory $21 X 400 = 8400
Production $24 X 800 = 19200
Cost of Goods Sold 700 units
FIFO (21 X 400) + (24 X 300) = $15,600
Beginning Inventory $10 X 725 = 8400
Production $14 X 650 = 19200
Cost of Goods Sold 700 units
LIFO (14 X 650) + (10 X 350) = $12,600
Sales and Cash Collections Budget
Quarter Ending Dec 31st, 2011
Total
Sales:
Total sales
$25,000
$35,000
$30,000
$90,000
Total cash sales (40%)
$5,000
$7,000
$6,000
$18,000 Total credit sales (60%)
$20,000
$28,000
$24,000
$72,000
Cash collections:
Current month cash sales
$5,000
$7,000
$6,000
$18,000
Collection of credit sales
$20,000
$28,000
$24,000
Total cash collections
$5,000
$27,000
$34,000
$42,000
Quarter end receivables
$72,000
Cash Budget
Quarter Ending Dec 31, 2011
October
November
December
Total
Receipts:
Cash, beginning balance
$0
$6,000
$6,000
$12,000
Collections from customers
$5,000
$27,000
$34,000
$66,000
Total cash available
$5,000
$33,000
$40,000
$78,000
Total disbursements
$0
$30,400
$29,800
$60,200
Excess (deficiency) of cash
$5,000
$2,600
$10,200
$17,800
Draws online of credit
$1,000
$3,400
$0
$4,400
Repayments
$0
$0
$4,200
$200
Cash, ending balance
$6,000
$6,000
$6,000
$22,000
5.
a) PV = 8000/(1+ 0.06)10 = $4,467.16
b) PV = 16000/(1+ 0.12)5 = $9,078.83
c) PV = 25000/(1+ 0.08)15 = $7,881.04
6.
a. FV = 12000 X (1+ 0.07)6 = $18,008.76
b. FV = 12000 X (1+ 0.12)15 = $65,682.79
c. FV = 12000 X (1+ 0.10)25 = $130,016.47
13
WACC = Ke [Ve / (Ve + Vd )] + Kd [Vd/(Ve + Vd)]
= 17% [0.5] + 5% [0.5]
= 11%
Project A should be accepted
14. Airborne airlines, Inn. Has a $1,000 par value bond outstanding with 25 years to maturity. The bond carries an annual interest payment of $75 and is currently selling for $875. Airborne is in the 30% tax bracket. The firm wishes.....