Part 4: Based on the data presented in the Unit VII Spreadsheet Template in Excel (IRR tab), calculate the internal rate of return (IRR) for the new equipment purchase. Complete your calculations by filling in the highlighted cells, and embed a copy of the completed spreadsheet into this report. Note: the PV Annuity table is provided for you. Discuss if you think the cookie business should accept or reject the purchase of the new equipment and why. Additional information has come to your attention regarding the equipment purchase. One of the partner's brother owns the company that sells the equipment and insists the equipment is needed. Discuss any ethical concerns you see with this type of transaction.

Part 5: Based on the data presented in the Unit VII Spreadsheet Template in Excel (Cash Budget tab), calculate the cash receipts for the first quarter of this year. Complete your calculations by filling in the highlighted cells, and embed a copy of the completed spreadsheet into this report. Discuss your observations about the way cash is collected if the company needs $150,000 per month for expenses.

Part 6: Based on the data presented in the Unit VII Spreadsheet Template in Excel (Variances tab), complete the following calculations. Calculate the material variances. Calculate the labor variances. Complete your calculations by filling in the highlighted cells, and embed a copy of the completed spreadsheet into this report. Discuss your observations about the variances and ways to plan to improve any of the variances.

B C D E F G H $ 1 Cookie Business 2 3 4 Actual Cost of Direct Materials 225,000 5 Standard Cost of Direct Materials $ 224,800 6 Actual Materials Used 30 7 Standard Materials Used 31 8 9 Actual Direct Labor Rate $ 15.50 10 Standard Labor Rate $ 15.00 11 Actual Hours Worked 45 12 Standard Hours Worked 40 13 Favorable/ Unfavorable Amount 14 15 Calculate Materials Variances: 16 Materials Price Variance 17 Materials Quantity Variance 18 19 Calculate Labor Variances: 20 Labor Rate Variance 21 Labor Efficiency Variance 22 23 24 25 26 27 28 29 30 31 32 33 34 35 CM Breakeven Full Variable Special Order IRR Cash Budget Variances B C D E F G March Cookie Business 2 3 4 The budgeted credit sales are as follows: 5 6 December last year $ 250,000 7 January $ 125,000 8 February $ 300,000 9 March $ 90,000 10 11 Collection: 12 Month of the sale 80% 13 Month following the sale 20% 14 15 16 Estimated cash receipts 17 January February 18 Last month's sales 19 Current month's sales 20 Total 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 CM Breakeven Full Variable Special Order IRR Cash Budget Variances A B D E F H L J K L M N O P Cookie Business 2 As the owner of the Cookie Business, you are considering the following investment: $ 250,000.00 $ 48,017.50 7 years 9% PV of Annuity Table n 1% 2% 1 0.9901 0.9804 2 1.9704 1.9416 3 2.941 2.8839 4 3.902 3.8077 5 4.8534 4.7135 6 5.7955 5.6014 7 6.7282 6.472 8 7.6517 7.3255 9 8.566 8.1622 10 9.4713 8.9826 11 10.3676 9.7869 12 11.2551 10.57531 13 12.1337 11.3484 14 13.0037 12.1063 15 13.8651 12.8493 3% 4% 0.9709 0.9615 1.9135 1.8861 2.8286 2.7751 3.7171 3.6299 4.5797 4.4518 5.4172 5.2421 6.2303 6.0021 7.0197 6.73271 7.7861 7.4353 8.5302 8.1109 9.2526 8.7605 9.954 9.3851 10.635 9.9857 11.2961 10.5631 11.938 11.1184 5% 0.9524 1.8594 2.7233 3.546 4.3295 5.0757 5.7864 6.4632 7.1078 7.7217 8.3064 8.8633 9.3936 9.8986 10.3797 6% 0.9434 1.8334 2.673 3.4651 4.2124 4.9173 5.5824 6.2098 6.8017 7.3601 7.8869 8.3838 8.8527 9.295 9.7123 8% 0.9259 1.7833 2.5771 3.3121 3.9927 4.6229 5.2064 5.7466 6.2469 6.7101 7.139 7.5361 7.9038 8.2442 8.5595 10% 0.9091 1.7355 2.4869 3.1699 3.7908 4.3553 4.8684 5.3349 5.759 6.1446 6.4951 6.8137 7.1034 7.36671 7.6061 5 Purchase of new equipment 6 Expected annual increase in sales 7 Time frame 8 Acceptable rate needed 9 10 Calculate the Internal Rate of Return: 11 PV of annuity factor 12 Internal rate of return 13 14 Accept or reject 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 12% 0.8929 1.6906 2.4018 3.0374 3.6048 4.1114 4.5638 4.9676 5.3283 5.6502 5.9377 6.1944 6.4236 6.6282 6.8109 CM Breakeven Full Variable Special Order IRR Cash Budget Variances +