Problem #1 Davidson Company makes and sells bottles of soda to grocery stores. Davidson's only plant can produce up to 12 million bottles of soda per year. Current annual production is 10 million bottles. Fixed manufacturing, selling and administrative costs total $15 million per year. The variable cost of making and selling each bottle of soda is $6.00. Stockholders expect a 15% annual return on the company's $40 million of assets. Requirements: 1) What is Davidson's current total cost of making and selling 10 million bottles of soda ? What is the current cost per bottle of soda? Problem #2 Big Ed's Dog Food Corporation has found that 60% of its sales in any given month are credit sales, while the remainder are cash sales. Of the credit sales, Big Ed's Dog Food Corporation has experienced the following collection pattern;" 25% received in the month of the sale 50% received in the month after the sale 16% received two months after the sale 9% of the credit sales are never received November sales for last year were $90,000, while December sales were $115,000. Projected sales for the next three months are as follows: January sales $145,000 February sales 125,000 March sales 180,000 Requirement: Prepare a cash collections budget for the first quarter, with a column for each month and for the quarter Problem #3 Environmental Industries is evaluating whether to invest in solar panels to provide some of the electrical needs of its main office building in Schenectady New York. The solar panel project would cost $600,000 and would provide cost savings in its utiltiy bills of $50,000 per year. It is anticipated that the solar panels would have a life of 20 years and would have no residual value. Requirements: 1) Calculate the payback period in years for the solar panel project. 2) If the company uses a discount rate of 12%, what is the net present value (NPV) of this project ? 3) If the company has a rule that no projects will be undertaken that have a payback period of more than five years, would this investment be accepted