Cookie Business As the owner of the Cookie Business, you are considering the following investment: PV of Annuity Table Purchase of new equipment $250,000.00 1% 2% 3% 4% 3%% 8% 10% 12% Expected annual increase in sales $ 48,017.50 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9259 0.9091 0.8929 Time frame 7 years 2 1.9704 1.9416 1.9135 1.8861 1.8594 1.8334 1.7833 1.7355 1.6906 Acceptable rate needed 9%% 2.941 2.8839 2.8286 2.7751 2.7233 2.673 2.5771 2.4869 2.4018 4 3.902 3.8077 3.7171 3.6299 3.546 3.4651 3 3121 3.1699 3.0374 Calculate the Internal Rate of Return: 5 4.8534 4.7135 4.5797 4.4518 4.3295 4.2124 3.9927 3.7908 3.6048 PV of annuity factor 6 5.7955 5.6014 5.4172 5.2421 5.0757 4.9173 4.6229 4.3553 4.1114 Internal rate of return 7 6.7282 6.472 5.2303 6.0021 5.7864 5.5824 5.2064 4.8684 4.5638 8 7.6517 7.3255 7.0197 6.7327 5.4632 6.2098 5.7466 5.3349 4.9676 Accept or reject 8.566 8.1622 .7861 7.4353 .1078 6.8017 6.2469 5.759 5.3283 10 9.4713 8.9826 8.5302 8.1109 7.7217 7.3601 6.7101 6.1446 5.6502 11 10.3676 9.7869 9.2526 8.7605 8.3064 7.8869 7.139 6.4951 5.9377 12 11 2551 10.5753 9.954 9.3851 8.8633 8.3838 -5361 6.8137 6.1944 13 12.1337 11.3484 10.635 9.9857 9.3936 8.8527 79038 7.1034 6.4236 Cookie Business 14 13 0037 12 1063 11.2961 10.5631 9.8986 9.295 8.2442 7.3667 6.6282 15 13 8651 12.8493 11 938 11 1184 10.3797 9.7123 8.5595 7.6061 6.8109 The budgeted credit sales are as follows: December last year S 250,000 January 125,000 Cookie Business February 300,000 March 90,000 Actual Cost of Direct Materials $225,000 Collection: Standard Cost of Direct Materials $224,800 Month of the sale 80% Actual Materials Used 30 Month following the sale 20% Standard Materials Used 31 Actual Direct Labor Rate $15.50 Estimated cash receipts Standard Labor Rate $15.00 January February March Actual Hours Worked 45 Last month's sales Standard Hours Worked 40 Current month's sales Tota Favorable/ Amount Unfavorable Calculate Materials Variances: Materials Price Variance Materials Quantity Variance Calculate Labor Variances: Labor Rate Variance Labor Efficiency Variance