1 (15 points) BADM2010 Ltd. is considering purchasing new manufacturing equipment at a cost of $825,000. It is expected to save $120,000 in cash operating costs per year. Its estimated useful life is 10 years and it will have a salvage value of $100,000. The required rate of return is 8% Required: Compute the following, indicating your answer in the blanks provided. To receive marks, your work must be shown in the spaces provided and must fully support your answers 1. Net Present Value 2. Payback Period 3. Accrual Accounting Rate of Return 4. Should the equipment be purchased? Explain your answer. D Question 3 (8 points) A sales budget is given below for one of the products manufactured by GH Inc.: January February March April May June 4 25,000 units 40,000 units 65,000 units 45,000 units 35,000 units 30,000 units The inventory of finished goods at the end of each month must equal 20% of the next month's sales. However, on December 31, the finished goods inventory totaled only 4,000 units. Required: Prepare a production budget for January. Format B T 11 Question 4 (7 points) The following information has also been provided by GH Inc.: All sales are made in cash for $10 per unit. For the month of January, direct material cash costs were $70,000, direct labour cash costs were $50,000, MOH cash costs were $60,000, cash selling and administration costs were $100,000, depreciation expense on factory equipment was $10,000, depreciation expense on the office building was $30,000. At the end of December, GH Inc. had a cash balance of $20,000. That is the minimum balance required. GH Inc. has a $100,000 line of credit. The interest expense is 12% on the outstanding amount borrowed, payable on July 31st and December 31st. Any amount borrowed is borrowed on the first of the month, and repayments are made on the last day of the month. Required: Prepare a cash budget for January