Question 1 of 10
Capital expenditure decisions
0 are useful for estimating inventory acquisition costs.
0 always involve the acquisition of long-lived assets.
0 consist of a final list of approved projects.
0 all of these answer choices are correct.
Question 2 of 10
Which of the following is not a component of a time value of money calculation?
0 The amount of cash to be received.
0 The time until the cash will be received.
0 The opportunity costs of the alternative actions.
0 The required rate of return.
Question 3 of 10
Which of the following is correct concerning a budget?
O It is a formal document that quantifies a company’s plans for achieving its goals.
O It is prepared by the budget committee.
O It identifies the causes of significant deviations from expected performance.
0 All of the answer choices are correct.
Question 4 of 10
A budget is useful in the planning process because it
0 determines who is to blame for poor operations.
0 forces managers to think about goals and objectives and means of achieving them.
0 identifies budget padding. 0 creates budget slack.
Question 5 of 10
Which of the following transactions will affect the cash budget for a particular month in which each transaction occurs?
Sale of a product when payment will be received in 60 days Payment for direct labor Amortization of prepaid insurance Depreciation of a piece of equipment that was purchased last year
Question 6 of 10
Paver Corporation is making a $84,300 investment in equipment with a 5-year life. The company uses the straight-line method of depreciation and has a tax rate of 20 percent. The company’s required rate of return is 13 percent.
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What is the present value of the tax savings related to depreciation of the equipment? (Round present value factor calculations to 4 decimal places, e.g. 1.2151 and hoot answer to 0 decimal place, ea. 125. Enter negative amounts using either a negative sign preceding the number es. -45 or parentheses eg- (45).)
The present value
Question 7 of 10
Carla Hardy recently rejected a 523.600.000. five-year contract with the Vancouver Seals hockey team. The contract offer called for an immediate signing bonus of S8.850.000 and annual payments of 52.950.000. To sweeten the deal. the president of player personnel for the Seals has now offered a 525.770.000. five-year contract. This contract calls for annual increases and a balloon payment at the end of five years.
Year 1 52.950.000
Year 2 3.030.000
Year 3 3.110.000
Year 4 3.190.000
Year 5 3.460.000
Year 5 balloon payment 10.030.000
Total 525.770.000
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Suppose you are Hardy’s agent and you wish to evaluate the two contracts using a required rate of return of 15 percent. In present value terms. how much better is the second contract? (Round present value factor calculations to 4 decimal pleas e.g. 1.2151 and final answers to 0 decimol places, e-s. 125. Enter negative *mounts using either a negative sign preceding the number e.g. -45 or parentheses e_g. (45).)
Question 8 of 10
Cinrich Industrial has estimated that production for the next five quarters will be: Production Information 1st quarter. 2020 46.800 units 2nd quarter, 2020 42.400 units 3rd quarter. 2020 51.200 units 4th quarter. 2020 40.000 units 1st quarter. 2021 48.400 units
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Finished units of production require 6 pounds of raw material per unit. The raw material cost is $7 per pound. There is $294.840 of raw material on hand at the beginning of the first quarter. 2020. Cinrich desires to have 15 percent of next quarter’s material requirements on hand at the end of each quarter.
Prepare quarterly direct materials purchases budgets for Cinrich Industrial for 2020.
Question 8 of 10
Cinrich Industrial has estimated that production for the next five quarters will be:
Production Information 1st quarter, 2020 46.800 units 2nd quarter. 2020 42.400 units 3rd quarter. 2020 51.200 units 4th quarter. 2020 40.000 units
1st quarter. 2021 48,400 units
Finished units of production require 6 pounds of raw material per unit. The raw material cost is 57 per pound. There is 5294.840 of raw material on hand at the beginning of the first quarter. 2020. Cinrich desires to have 15 percent of next quarter’s material requirements on hand at the end of each quarter.
Prepare quarterly direct materials purchases budgets for Cinrich Industrial for 2020.
Question 8 of 10
Cinrich Industrial has estimated that production for the next five quarters will be:
Production Information 1st quarter. 2020 46.800 units 2nd quarter, 2020 42,400 units 3rd quarter. 2020 51.200 units 4th quarter. 2020 40.000 units 1st quarter. 2021 48.400 units
Finished units of production require 6 pounds of raw material per unit. The raw material cost is 57 per pound. There is $294.840 of raw material on hand at the beginning of the first quarter, 2020. Cinrich desires to have 15 percent of next quarters material requirements on hand at the end of each quarter.
Prepare quarterly direct materials purchases budgets for Cinrich Industrial for 2020.
Question 9 of 10
The Sipacore Antique Mall budgeted credit sales in the first quarter of 2021 to be as follows: January $147,200 February 156.400
March 167.200
Credit sales in December 2020 are expected to be 5184.000. The company expects to collect 60 percent of a months sales in the month of sale and 40 percent in the following month.
Estimate cash receipts for each month of the first quarter of 2021.
Question 10 of 10 <
The Tri Town Antique Mall expects to make purchases in the first quarter of 2021 as follows:
January $91200
February 115200
March 81.600
Purchases in December 2020 are expected to be 588000. The company expects that 50 percent of a month’s purchases will be paid in the month of purchase and SO percent will be paid in the following month.
Estimate cash disbursements related to purchases for each month of the first quarter of 2021.

 

 

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