Accounting :
Please solve Question 2 and 3 if Question 1 is not clear to you . I can just suggest that in question 1 you manage and suppose any value in incomplete fields. I will be thankful of you and will rate you always. So kind of you.
(10 Marks) Question No. 3 (15 Marks) Question No. 1 Material Cost (80% direct, 20% indirect) Mattel 10000 units @ $50 Plastic 2000 unit @ $20 Miscellaneous supplies for production support 2000 units @ 10 Atlas Engineering is planning to install new machinery in their manufacturing division. The total investment budget is $120000. Atlas Engineering is reviewing three machinery that will generate three different cash inflow with the similar investment. For comparison and optimal capital budgeting decision, company require to analyze three project options with the following cash inflows. Labor cost 10 labors with 40000 hours (70% direct, 30% indirect) Manufacturing overhead Indirect Material $8000 Indirect Labor $4000 Security guard salary $2000 Factory Electricity Expense $1000 General Manager salary $20000 Profit Margin 40% of total cost Year 1 2 3 4 5 6 Required: A. Calculate Total Direct cost and Total Indirect Cost (2 marks) B. Calculate Total Product Cost and Cost per unitif 50 000 units are produced. (3 Marks) C. If the Market price is $ 1200000 what will be the target cost? (5 Marks) Project A Inflow $29.064 33,960 30.600 17.400 15,672 15,672 15,672 13,560 11,400 11,400 Project B Inflow $31,970 $37,356 $33.660 $19.140 $17.239 $17.239 ($17,239) $14,916 $12.540 $12.540 Project C Inflow $34.877 $40.752 $36.720 $20,880 $18.806 ($18.806) $18.806 $16.272 $13,680 $13.680 7 8 9 10 Question No. 2 (5 Marks) Continuing illustration 19, it the firm has 18.000 equity shares of $100 each outstanding and the current market price is $300 per share. The cost of issuing shares is 12%. The market you are required to use Net Present Value (NPV) technique to compare three projects for Atlas Engineering capital budgeting and finally advise them to select or reject any one project among them. Rate of return assume to be 12% annually. Further give clear decision on what bases project is accepted and others are rejected? values and book values of the debt is $1500000 with the cost of debt 5% and preference capital is $1200000 with cost of acquiring 10%. 1. What is the total capital of this company with proportions of each capital component in total capital structure (percentage)? (1 Marks) 2. Calculate the market value weighted average cost of capital (WACC). (4 Marks)
