Q4 Total operating expenses$90,125Net operating income$34,875Required:1. Compute payback period off the truck. Is the investment in new truckdesirable if maximum desired payback period of the Euro Transportcompany is 5 years?2. Compute the accounting rate of return promised by the truck. Would theEuro Transport company be interested in new truck if minimum requiredaccounting rate of return is 12%?Q3- The Sunshine company is considering two projects, project A andproject B. Project A requires the purchase of an equipment but noworking capital investment whereas project B requires a working capitalinvestment but no equipment. The relevant information for net presentvalue analysis is given below:Project A Project B$600,000Cost of equipmentWorking capital neededAnnual cash inflows$600,000$160,000 $120,000$40,000Salvage value (scrap value) of equipmentProject lifeThe working capital required for project B will be released at the end ofproject life. Sunshine company uses an 18% discount rate.Required: Are the two projects comparable using net present value(NPV)? If yes, Select the best investment using net present value (NPV)8 years8 Yearsmethod.Q4- PQR company sells two products. The total fixed expenses of thecompany are 1,197,000. The monthly data of PQR is as follows:ProductsProduct AProduct BTotal$1,400,000 $600,000 $2,000,000Sales Contribution margin ratio60%70%Required:1. Prepare Income statement for the company.2. Calculate break-even point in dollars.Q5- Amber Manufacturing provided the following information for lastmonth:SalesVariable costsFixed costs$20,0006,0009,000Operating income $5,000If sales double next month, what is the projected operating income?Q6- Benjamin Company has the following data:Budgeted Sales$108,000132,000144,000120,000MonthJanuaryFebruaryMarchAprilCost of goods sold average 60% of sales. The inventory at December 31was $19,440. Desired ending inventory levels are 20% of next month'ssales at cost. What is the desired ending inventory value at February28?Q7- Downstairs Company has the following sales budget for the lastsix months of 2010:JulyAugustSeptemberOctober$100,00080,000110,00080,000100,00094,000NovemberDecember

PQR sells two products , Product A and Product B. The contribution margin is 60% and 70 % , thus the…

Q4- PQR company sells two products. The total fixed expenses of the company are 1,197,000. The monthly data of PQR is as follows: Products Product A Product B Total ales $1,400,000 $600,000 $2,000,00C

Q4- PQR company sells two products. The total fixed expenses of the company are 1,197,000. The monthly data of PQR is as follows: Products Product A Product B Total ales $1,400,000 $600,000 $2,000,00C

Fundamentals of Financial Management (MindTap Course List)

15th Edition

ISBN:9781337395250

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter12: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 16P: REPLACEMENT CHAIN The Lesseig Company has an opportunity to invest in one of two mutually exclusive...

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