I have two questions in accounting. Can someone help me out? See below Question 1: Complete Problem 14.1 on page 290 of the course text (solution is on page 523). Next, work the problem again using the following variables: project yield annual net cash inflows are $10,500 for the next five years; interest rate of 16.5%, and the initial investment of $33,000. Calculate the net present value of the cash flows and the IRR for the project using the Excel spreadsheet formula. Explain the concept of Net Present Value. Page 290 Question 14.1 The Whitton Co. has an opportunity to buy a computer now for 18,000 that will yield annual net cash inflows of 10,000 for the next three years, after which its resale value would be zero. Whitton?s cost of capital is 16% Calculate the net present value of the cash flows for the computer using spreadsheet formula. What is the IRR? Solution for 14.1 (Page 523) Formula for present value= +NPV (16%, C3:E3). The cash flows are entered in columns C (Year 1) to E (Year 3). See Table S 14.1. Table S14.1 Col A Col B Col C Col D Col E Year 0 Year 1 Year 2 Year 3 Cash flows 10,000 10,000 10,000 Present value 22,459 Initial investment -18,000 NPV 4,459 To calculate IRR using the spreadsheet function, a negative figure (the initial cash investment) must be part of the range of values. Formula for IRR = + IRR (B3:E3). Year 0 Year 1 Year 2 Year 3 Cash flows - 18,000 10,000 10,000 10,000 IBR 31% Question 2: Complete Problem 16.4 on page 329-330 of the course text (solution is on page 533-534 - Table S16.4). Next work the problem again using the following variables: The selling price is expected to be 350 per ton for the first three months and 360 per ton thereafter. Variable costs per ton are predicted as 100 in the first quarter, 120 in the second quarter, and 130 in the last two quarters; and salary and wages do not increase in the last two quarters. The rest of the assumptions are as listed on problem 16.4. What is the cumulative cash flow at the end of Quarter 4? Be prepared to paste your worksheet for this problem into the OAES Page 329-330 Problem 16.4 Griffin Metals Co. has provided the following data: Anticipated volumes (assumes production equals sales each quarter): Quarter 1 100,000 tonnes Quarter 2 110,000 tonnes Quarter 3 105,000 tonnes Quarter 4 120,000 tonnes The selling price is expected to be 300 per tonne for the first six months and 310 per tonne thereafter. Variable costs per tonne are predicted as 120 in the first quarter, 125 in the second and third quarter, and 130 in the fourth quarter. Fixed costs (in ?000 per quarter) are estimated as follows: Salaries and wages 3,000 for the first half year, increasing by 10 for the second half year Maintenance 1,500 Council rates 400 Insurance 120 Electricity 1,000 Depreciation 5,400 Other costs 2,500 in the first and fourth quarters, 1,800 in the second and third quarters Interest 600 Capital expenditure 6,500 in the first quarter, 2,000 in the second quarter, 1,000 in the third quarter and 9,000 in the fourth quarter. Dividend payment 10,000 in the third quarter Debt repayments 1,000 in the first quarter, 5,000 in the second quarter, 4,000 in the third quarter and 3,000 in the fourth quarter. Griffin has asked you to produce a profit budget and a cash forecast for the year (in four quarters) using the above data. Solution for 16.4 (Pages 533-534) Budget Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total Volume (tonne) 100,000 110,000 105,000 120,000 Selling price (per tonne) 300 300 310 310 Variable (per tonne) 120 125 125 130 Budget in ?000 Sales and production 30,000 33,000 32,550 37,200 132,750 Variable costs (raw materials) 12,000 13,750 13,125 15,600 54,475 Contribution 18,000 19,250 19,425 21,600 78,275 Total fixed costs: Salaries and wages 3,000 3,000 3,300 3,300 12,600 Maintenance 1,500 1,500 1,500 1,500 6,000 Council rates 400 400 400 400 1,600 Insurance 120 120 120 120 480 Electricity 1,000 1,000 1,000 1,000 4,000 Budget Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total Depreciation 5,400 5,400 5,400 5,400 21,600 Other costs 2,500 1,800 1,800 2,500 8,600 Total fixed costs 13,920 13,220 13,520 14,220 54,880 Operating profit 4,080 6,030 5,905 7,380 23,395 Interest expense 600 600 600 600 2,400 Profit after interest 3,480 5,430 5,305 6,780 20,995 Cash forecast Profit after interest 3,480 5,430 5,305 6,780 20,995 Add back depreciation 5,400 5,400 5,400 5,400 21,600 8,880 10,830 10,705 12,180 42,595 Less capital expenditure 6,500 2,000 1,000 9,000 18,595 Less dividend 10,000 10,000 Less debt repayments 1,000 5,000 4,000 3,000 13,000 Net cash flow 1,380 3,830 -4,295 180 1,095 Cumulative cash flow 1,380 5,210 915 1,095

Question 1: Complete Problem 14.1 on page 290 of the course text (solution is on page 523). Next, work the problem again using the following variables: project yield annual net cash inflows are $10,500 for the next five years; interest rate of 16.5%, and the initial investment of $33,000. Calculate the net present value of the cash flows and the IRR for the project using the Excel spreadsheet formula. Explain the concept of Net Present Value. Page 290 Question 14.1 The Whitton Co. has an opportunity to buy a computer now for 18,000 that will yield annual net cash inflows of 10,000 for the next three years, after which its resale value would be zero. Whitton's cost of capital is 16% Calculate the net present value of the cash flows for the computer using spreadsheet formula. What is the IRR? Solution for 14.1 (Page 523) Formula for present value= +NPV (16%, C3:E3). The cash flows are entered in columns C (Year 1) to E (Year 3). See Table S 14.1. Table S14.1 Col A Col B Year 0 Cash flows Present value Col C Year 1 10,000 Col D Year 2 10,000 Col E Year 3 10,000 22,459 Initial investment -18,000 NPV 4,459 To calculate IRR using the spreadsheet function, a negative figure (the initial cash investment) must be part of the range of values. Formula for IRR = + IRR (B3:E3). Year 0 Year 2 Year 3 - 18,000 Cash flows Year 1 10,000 10,000 10,000 IBR 31% Question 2: Complete Problem 16.4 on page 329-330 of the course text (solution is on page 533-534 - Table S16.4). Next work the problem again using the following variables: The selling price is expected to be 350 per ton for the first three months and 360 per ton thereafter. Variable costs per ton are predicted as 100 in the first quarter, 120 in the second quarter, and 130 in the last two quarters; and salary and wages do not increase in the last two quarters. The rest of the assumptions are as listed on problem 16.4. What is the cumulative cash flow at the end of Quarter 4? Be prepared to paste your worksheet for this problem into the OAES Page 329-330 Problem 16.4 Griffin Metals Co. has provided the following data: Anticipated volumes (assumes production equals sales each quarter): Quarter 1 100,000 tonnes Quarter 2 110,000 tonnes Quarter 3 105,000 tonnes Quarter 4 120,000 tonnes The selling price is expected to be 300 per tonne for the first six months and 310 per tonne thereafter. Variable costs per tonne are predicted as 120 in the first quarter, 125 in the second and third quarter, and 130 in the fourth quarter. Fixed costs (in '000 per quarter) are estimated as follows: Salaries and wages 3,000 for the first half year, increasing by 10 for the second half year Maintenance 1,500 Council rates 400 Insurance 120 Electricity 1,000 Depreciation 5,400 Other costs 2,500 in the first and fourth quarters, 1,800 in the second and third quarters Interest 600 Capital expenditure 6,500 in the first quarter, 2,000 in the second quarter, 1,000 in the third quarter and 9,000 in the fourth quarter. Dividend payment 10,000 in the third quarter Debt repayments 1,000 in the first quarter, 5,000 in the second quarter, 4,000 in the third quarter and 3,000 in the fourth quarter. Griffin has asked you to produce a profit budget and a cash forecast for the year (in four quarters) using the above data. Solution for 16.4 (Pages 533-534) Budget Qtr 1 Volume (tonne) Qtr 2 Qtr 3 Qtr 4 Total 100,000 110,000 105,000 120,000 Selling price (per tonne) 300 300 310 310 Variable (per tonne) 120 125 125 130 Budget in '000 Sales and production 30,000 33,000 32,550 37,200 132,750 Variable costs (raw materials) 12,000 13,750 13,125 15,600 54,475 Contribution 18,000 19,250 19,425 21,600 78,275 Salaries and wages 3,000 3,000 3,300 3,300 12,600 Maintenance 1,500 1,500 1,500 1,500 6,000 Council rates 400 400 400 400 1,600 Insurance 120 120 120 120 480 Electricity 1,000 1,000 1,000 1,000 4,000 Total fixed costs: Budget Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total Depreciation 5,400 5,400 5,400 5,400 21,600 Other costs 2,500 1,800 1,800 2,500 8,600 Total fixed costs 13,920 13,220 13,520 14,220 54,880 Operating profit 4,080 6,030 5,905 7,380 23,395 Interest expense 600 600 600 600 2,400 3,480 5,430 5,305 6,780 20,995 Profit after interest 3,480 5,430 5,305 6,780 20,995 Add back depreciation 5,400 5,400 5,400 5,400 21,600 8,880 10,830 10,705 12,180 42,595 6,500 2,000 1,000 9,000 18,595 Profit after interest Cash forecast Less capital expenditure Less dividend 10,000 10,000 Less debt repayments 1,000 5,000 4,000 3,000 13,000 Net cash flow 1,380 3,830 -4,295 180 1,095 Cumulative cash flow 1,380 5,210 915 1,095