Looking for help with the following questions in the attachment.. Thank you.

Module Four Accounting Section BUS495 Problem One: (10 Points) Your Last Name, First Initial Herder, Inc. acquired an offroader on January 1, 2009, for $42,000. The machine is estimated to have a five-year life, with a residual value of $6,000. Herder, Inc. is not certain whether to use the straight-line or double-declining-balance method of depreciation. Prepare the following depreciation schedule: Straight-Line Depreciation Date 01/01/0 9 12/31/0 9 12/31/1 0 12/31/1 1 Expense Book value $42,000 Double-DecliningBalance Depreciation Expense Book value $42,000 Problem Two: (20 Points) Centex Company surveys American television-viewing trends. The company's balance sheet reports the following assets under Property and Equipment: Land, Buildings, Office Furniture, Communication Equipment, and Televideo Equipment. The company has a separate accumulated depreciation account for each of these assets except land. Assume that Centex Company completed the following transactions: Jan. 2 Aug. 31 Nov. 4 Dec. 31 Traded in communication equipment with book value of $11,000 (cost of $96,000) for similar new equipment with a cash cost of $88,000. The seller gave Centex a trade-in allowance of $15,000 on the old equipment, and Centex paid the remainder in cash. Sold a building that had cost of $475,000 and had accumulated depreciation of $353,500 through December 31 of the preceding year. Depreciation is computed on a straight-line basis. The building has a 30year useful life and a residual value of $47,500. Centex received $150,000 cash and a $450,000 note receivable. Purchased used communication and televideo equipment from Diebold polling organization. Total cost was $80,000 paid in cash. An independent appraisal valued the communication equipment at $75,000 and the televideo equipment at $25,000. Recorded depreciation as follows: Equipment is depreciated by the double-declining-balance method over a 5-year live with zero residual value. Record depreciation separately on the equipment purchased on January 2 and on November 4. Record the transactions in the journal of Centex Company. 1 Module Four Accounting Section BUS495 Your Last Name, First Initial 2 Module Four Accounting Section BUS495 Problem Three: (10 Points) Your Last Name, First Initial Hillsboro Company purchased a tract of land and contracted with a commercial developer to build an office building. Hillsboro Company also engaged other contractors for fencing, paving, lighting, and landscaping. Based on the following data, determine the cost of the land, the building, and the land improvements. Purchased land for $100,000. Paid $2,000 for seller's back property taxes. Paid a builder $225,000 to design and build the office building. Paid an excavation company $6,000 to grade and clear the land to make it suitable for building purposes. Paid a landscaping company $6,000 for trees and shrubs. Paid a lighting contractor $10,000 for outside lighting around the parking area and sidewalks. Paid $15,000 to have the parking lot paved. Paid a fence builder $12,000 to construct a security fence around the property. Problem Four: (10 Points) The top management of The Office Depot, Inc., examines company accounting records at January 24, one week before the end of the fiscal year (amounts in billions): Total current assets............................................................ Noncurrent assets............................................................. Total current liabilities....................................................... Noncurrent liabilities......................................................... Owners' equity................................................................ $13.3 21.1 $34.4 $9.6 12.8 12.0 $34.4 Suppose Office Depot's top management wants to achieve a current ratio of 1.5. How much in current liabilities should Office Depot pay off within the next week to achieve its goal? 3 Module Four Name, First Name Finance Section BUS 495 Problem One: (10 Points) Your Last Felix Industries purchased a grinder 5 years ago for $15,000. It is being depreciated on a straight-line basis over 15 years to an estimated salvage value of zero. It could be sold now for $6,000. The firm is considering selling it and purchasing a new one. The new grinder would cost $25,000 installed and would be depreciated on a straightline basis over 10 years to a zero estimated salvage value. The company's marginal tax rate is 40%. Determine the net investment if the old grinder is sold and the new one purchased. Problem Two: (10 Points) SMG Corporation is evaluating replacing their large mainframe computer with a modern network system that requires much less office space. The network would cost $500,000 (including installation costs) and would generate $125,000 per year in operating cash flows (accounting for taxes and depreciation) over the next five years due to efficiency gains. The mainframe has a remaining book value of $50,000 and would be immediately donated to a charity for the tax benefit. SMG's cost of capital is 10 percent and tax rate, 40 percent. On the basis of NPV, should management install the network system? Problem Three: (10 Points) Using a 14 percent cost of capital, calculate the NPV for each of the projects shown in the following table and indicate whether or not each is acceptable. Project A Initial cash outflow (CF0) $20,000 Year (t) 1 $3,000 2 3 4 5 6 7 8 9 10 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 Project B $600,000 Project C $150,000 Project D $760,000 Cash Inflows (CFt) $120,000 $18,000 $185,00 0 145,000 17,000 185,000 170,000 16,000 185,000 190,000 15,000 185,000 220,000 15,000 185,000 240,000 14,000 185,000 13,000 185,000 12,000 185,000 11,000 10,000 Project E $100,00 0 $ 0 0 0 25,000 36,000 0 60,000 72,000 84,000 Problem Four: (20 Points) You have a $10 million capital budget and must make the decision about which investments your firm should accept for the coming year. Projects 1, 2, and 3 are 4 Module Four Name, First Name Finance Section BUS 495 Your Last mutually exclusive, and Project 4 is independent of all three. The firm's cost of capital is 12 percent. Project 1 Project 2 Project 3 Project 4 Initial cash outflow $4,000,000 $5,000,000 $10,000,000 $5,000,000 Year 1 cash inflow 1,000,000 2,000,000 4,000,000 2,700,000 Year 2 cash inflow 2,000,000 3,000,000 6,000,000 2,700,000 Year 3 cash inflow 3,000,000 3,000,000 5,000,000 2,700,000 a. Use the information on the three mutually exclusive projects to determine which of those three investments your firm should accept on the basis of NPV. b. Which of the three mutually exclusive projects should the firm accept on the basis of PI? c. If the three mutually exclusive projects are the only investments available, which one do you select? d. Now given the availability of Project 4, the independent project, which of the mutually exclusive projects do you accept? (Note: Remember there is a $10 million budget constraint.) Is the better technique in this situation NPV or PI? Why? 5