1.

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?

1 point

$280,000

$266,200

$292,820

$260,000

2.

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?

1 point

25,000

26,000

21,000

31,000

3.

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 materials to be purchased (in kilograms) in Q2?

1 point

26,000

86,700

78,000

78,900

4.

Question 4

Disintegration, Inc. is considering a long-term investment. The investment will require an investment of $84,000. 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?

1 point

3 years

3.5 years

4 years

4.5 years

5.

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 $22,000.

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.

1 point

($1,818)

$4,000

($3,636)

$3,636