Reference no: EM132864111

Question 1 - Kaplan Inc. had 100,000 in unit-sales during the last quarter of last year. Managers expect the sales to increase by 10% each quarter over the next four quarters.

The selling price is expected to remain the same for the next four quarters at $2 per unit.

What is the quarter-specific budgeted sales revenue for the 4th quarter of the coming year?

Question 2 - Waunakee Metals expects sales for the year to be 100,000 units, with quarterly sales of 20%, 25%, 30%, and 25%, respectively. The sales price is expected to be $40.

Management desires an ending finished goods inventory each quarter of 20% of the next quarter's sales volume.

Each unit requires 3 kilograms of materials at a cost of $5 per kilogram. Management desires an ending raw materials inventory each quarter of 10% of the next quarter's production needs.

What is the budgeted production (in units) in Q2?

Question 3 - Waunakee Metals expects sales for the year to be 100,000 units, with quarterly sales of 20%, 25%, 30%, and 25%, respectively. The sales price is expected to be $40.

Management desires an ending finished goods inventory each quarter of 20% of the next quarter's sales volume.

Each unit requires 3 kilograms of materials at a cost of $5 per kilogram. Management desires an ending raw materials inventory each quarter of 10% of the next quarter's production needs.

What is the budgeted cost for materials to be purchased (in $) in Q2?

Question 4 - Disintegration, Inc. is considering a long-term investment. The investment will require an investment of $72,000. It will have a useful life of 5 years, and no salvage (i.e., ending) value.

Annual cash savings from the investment are $40,000, and annual cash outflows are $16,000.

Assume that cash flows other than the initial investment occur evenly throughout the year.

What is the payback period?

Question 5 - Seventeen Seconds, Inc. is considering a long-term investment. The investment will require an investment of $40,000. It will have a useful life of 2 years, and no salvage (i.e., ending) value.

Annual cash savings from the investment are $24,000.

Assume that cash flows other than the initial investment occur at the end of the year, and that the cost of capital (i.e., discount rate) is 10%.

Calculate the net present value of the investment.