• KC Corporation is planning to invest P80,000 in a three-year project.KC's expected

rate of return is 10%. The present value of P1 is at 10% for one year is .909, for two years is

.826, and for three years is .751. The cash flow, net of income tax, will be P30,000, for the

first year (present value of P27, 270) and P36,000 for the second year (present value of

P29,736).

Assuming the rate of return is exactly 10%, what will be the cash flow, net of

income tax, for the third year?

• The Dec. 31, 2007 balance sheet of Cyber Inc is presented below. These are

only accounts in Cyber's balance sheet. Amounts indicated by a question mark

(?) can be calculated from the additional information given

Assets

Cash 25,000

Accounts receivable (net) ?

Inventory ?

Property, plant and equipment (net) 294,000

432,000

Liabilities & Stockholders' Equity

Current ratio (at year end) 1.5 to 1

Total liabilities divided by total

stockholders' equity 0.8

Inventory turnover (based on EI) 10.5 times

Cost of sales for 2007 735,000

What was Cybers' Dec. 31, 2007 inventory?

• The Heaven Co. makes and sells a single product called Zoom. Overhead costs are

applied to products on a basis of direct labor hours. The following data applies to the

company's activities for the month of November:

Actual fixed overhead cost incurred 161,450

Budgeted direct labor hours

(denominator activity) 40,000

Number of zoom completed 21,000

Fixed overhead budget variance - Favorable 11,450

Standard direct labor hours allowed/ Zoom 2

Standard overhead rate 5

The volume variance for November is: