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Salvage value 10 $70,000 0.191 13,370
Working capital release 10 $60,000 0.191 11,460
Net present value ($80,735)
Required:
(a) What is the net present value of this investment opportunity?
(b) Based on your answer to (a) above, should Simpson go ahead with
the new conditioning shampoo? (Points : 30)
Question 3.3. (TCO A) The following data (in thousands of dollars)
have been taken from the accounting records of the Maroon Corporation
for the just-completed year.
Sales 1,700
Raw materials inventory, beginning 50
Raw materials inventory, ending 25
Purchases of raw materials 210
Direct labor 360
Manufacturing overhead 330
Administrative expenses 400
Selling expenses 200
Work-in-process inventory, beginning 120
Work-in-process inventory, ending 150
Finished goods inventory, beginning 80
Finished goods inventory, ending 120
Use the above data to prepare (in thousands of dollars) a schedule of
Cost of Goods Manufactured and a Schedule of Cost of Goods Sold for
the year. In addition, what is the impact on the financial statements if the
ending finished goods inventory is overstated or understated? (Points :
25)
Question 4.4. (TCO F) Walker Corporation is preparing its cash budget
for November. The budgeted beginning cash balance is $43,000.
Budgeted cash receipts total $117,000 and budgeted cash disbursements
total $122,000. The desired ending cash balance is $55,000. The
company can borrow up to $100,000 at any time from a local bank, with
interest not due until the following month.
Required: