in the to get and assumptions ase Probien 3: chapter 6 K'S BOARD SHOP s Board Shop is contemplating several alternative means o ition of $350,000 in w Sndget broken down by year 300,000 from a local ban new equipment in year 1, One option is to bor- equi The bank has asked them to produce a 3-year to increase 3 percent each year. Year I begin- sles of 40 percent and a required ending inven- k. $300,000 and are cx year (Year 1, 2, and 3). Sales in the prior year were sash was $97.450 and beginning are nventory was $30,000. Purchases hased on an expected cost of s B of 25 percent of next year's sales. Prior year expenses ina included advertising 2.500, depreciation expense expense of $2.500, de of $1,000, wages expense of $46,000 supp depre lies expense of $450, and utilities expense of $1.600. All expenses exce ciation are paid in the year in which they are incurred and are expected to is expe 8 percent each year. Interest expense is expected o de are $15,000 each year for years 1-3. Collections in the year of sale are expected to at increase 8