Question

CT expects sales for June, July, and August of $48,000, $54,000, and $44,000, respectively. Experience suggests...

CT expects sales for June, July, and August of $48,000, $54,000, and $44,000, respectively. Experience suggests that 40% of sales are for cash and 60% are on credit. The company collects 50% of its credit sales in the month following sale, 45% in the second month following sale, and 5% are not collected. What are the company's expected cash receipts for August from all customers?

Group of answer choices

A. $29,160

B. $61,160

C. $46,760

D. $78,800

E. $66,200

How is depreciation handled by the following capital budgeting techniques? (Ignore income taxes in this problem.)

Group of answer choices

A. IRR: Included; AARR: Included; Payback: Excluded

B. IRR: Excluded; AARR: Excluded; Payback: Included

C. IRR: Excluded; AARR: Included; Payback: Excluded

D. IRR: Included; AARR: Excluded; Payback: Included

Which of the following is not a batch-level activity?

A. Inspecting the product prior to inserting it in the each individual packaging.

B. Preparation of shipping documents for an order; the minimum order size is 50 units .

C. Preparing the duplicating machine to generate copies of the product from a master mould.

D. Loading the automatic labelling machine with address labels to be used to ship orders.

The net present value method of capital budgeting assumes that cash flows are reinvested at what rate?

A. The rate of return on the company's debt.

B. The discount rate used in the analysis.

C. A zero rate of return.

D. The internal rate of return on the project.

Homework Answers

Answer #1

1. Cash receipts for august = (August Sales * 40%) + (July Sales * 60% * 50%) + (June month Sales * 60% * 45%)

= (44000*40%) + (54000*60%*50%) + (48000*60%*45%)

= 17600 + 16200 + 12960 = $ 46760 (Option C)

2. Depreciation is excluded in computation of Net Cash flows. Net cash flows are used in computation of IRR and payback period that implies depreciation is excluded in computation of IRR and payback period. (Option C)

3. Option A - Here individual product is inspected for packing.

4. Option D: IRR of the project, otherwise the return will get affected

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Felix Co. expects June sales to be $29,000, July sales to be $35,000, August sales to...
Felix Co. expects June sales to be $29,000, July sales to be $35,000, August sales to be $32,000, and September sales to be 33,000. 40% of sales are cash sales and remaining 60% are credit sales. Collection of credit sales are 50% in the month of sale, 40% in the month following sale and 5% two months following sale. The remaining 5% is uncollectible. What is the expected total cash collections in August?
DuPree Enterprises reported the following cash collections in July and August from credit sales: July August...
DuPree Enterprises reported the following cash collections in July and August from credit sales: July August From June receivables $ 41,000 From July sales 152,000 $ 38,000 From August sales 176,000 The company sells a single product for $20, and all sales are collected over a two-month period. Required: A. Determine the number of units that were sold in July. B. Determine the percent of credit sales collected in the month of sale and the percent of sales collected in...
34. Crane Company expects August sales to be $50,000. Of these sales, credit sales are expected...
34. Crane Company expects August sales to be $50,000. Of these sales, credit sales are expected to be $15,000. Collection of credit sales are 60% in the month of sale, 30% in the month following sale and 5% two months following sale. The remaining 5% is uncollectable. ________ is the expected cash collection in October from August sales. A) $750   B) $1,500 C) $3,500 D) $4,400 38. Budgets that focus on the budgeted cost of activities required to produce and...
Cruises, Inc. has budgeted sales revenues as follows: June July August Credit Sales $135,000 $135,000 $90,000...
Cruises, Inc. has budgeted sales revenues as follows: June July August Credit Sales $135,000 $135,000 $90,000 Cash Sales 90,000 225,000 195,000 Total Sales $225,00 $380,000 $285,000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Cash disbursements were $421,000 for July and $250,500 for August. The company wishes to maintain a minimum cash balance of $50,000 at the end of each...
Consider the following information provided by a Travel Agency: Sales (€) June July August September October...
Consider the following information provided by a Travel Agency: Sales (€) June July August September October November 180 000 220 000 220 000 310 000 500 000 200 000 60% of the sales are for credit and are collected one month after the sale. Other receipts: €60 000 in October Monthly Gross Margin of 30% Fixed Costs: €8 000 Taxes in July: €75 000 Debt repayment in November: €400 000 Cash at the Beginning of June: €50 000 Minimum operating...
V had actual sales and purchases for July and August 2020 as given in the Excel...
V had actual sales and purchases for July and August 2020 as given in the Excel spreadsheet, along with its forecast sales and purchases for the period September 2020 through February 2021. The firm makes 30% of all sales for cash and collects 35% of its sales in each of the two months following the sale. Other cash inflows are expected to be $22,000 in September and February, $25,000 in November and January, and $37,000 in December. The firm pays...
A division in XYZ Co. had the following financial data for 2019: sales $500,000, average operating...
A division in XYZ Co. had the following financial data for 2019: sales $500,000, average operating assets $200,000, margin (or profit margin) 4%, minimum required rate of return 8%. What was the return on investment for the division? A. 10%. B. 20%. C. 16%. D. 12%. Patricia’s housekeeping company has the following data projected for June. Beginning cash balance $24,500 Cash collections from customers 36,200 Cash disbursements 54,300 Patricia wants to maintain a cash balance of $10,000 or more. Any...
SHOW CALCULATION AND EXPLANATION, PLEASE! 1- For a given amount, the lower the discount rate, the...
SHOW CALCULATION AND EXPLANATION, PLEASE! 1- For a given amount, the lower the discount rate, the less the present value. A) True B) False 2- What is the NPV of a project that costs $100,000 and returns $45,000 annually for three years if the cost of capital is 14%? A) $3,397.57 B) $4,473.44 C) $16,100.00 D) $35,000.00 3- The decision rule for net present value is to: A) Accept all projects with cash inflows exceeding initial cost. B) Reject all...
Required: Prepare a master budget for San Marcos Collectibles for the third quarter of 2016. The...
Required: Prepare a master budget for San Marcos Collectibles for the third quarter of 2016. The following component budgets must be included: Sales Budget Cost of Goods Sold, Inventory and Purchases Budget Operating Expense Budget Budgeted Income Statement Schedule of Expected Cash Collections Schedule of Expected Cash Disbursements - Merchandise Purchases Schedule of Expected Cash Disbursements - Operating Expenses Combined Cash Budget Budgeted Balance Sheet San Marcos Collectibles is a merchandising business located downtown in San Marcos, Texas. The owners...
1) On January 1, 2014, Bullitt Corporation sold a machine to Sting Corporation and simultaneously leased...
1) On January 1, 2014, Bullitt Corporation sold a machine to Sting Corporation and simultaneously leased it back for ten years. The following information is available regarding the lease: Estimated remaining useful life at December 31, 2013 10 years Sales price $ ,90,000 Carrying value at December 31, 2103 $ 52,500 Annual rental under leaseback $14,600 Interest rate implicit in the lease 10% Present value of the lease rentals $ 89,711 (14,600 for 10 years at 10%) How much profit...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT