Lizz and Taylors, a retail business, has supplied the following information in relation to their actual sales in 2017 and planned sales for the first quarter of 2018.

                                                                                  Cash        Credit            Total

                                                                                        $                $                $

2017 Actual Sales for                  November      25,000      25,000            50,000

                                                       December      35,000      40,000            75,000

2018 Estimated Sales for              January          15,000      20,000            35,000

                                                        February        18,000      30,000            48,000

                                                        March             22,000      40,000            62,000

Past records indicate that expected receipts collected from debtors will be:

            60% in the month of sale

            40% in the month following the sale

1. What is the projected cash inflow from debtors in both January and February?
2. What is the total cash expected to be collected from all sales in March?

Based on your answers above, explain how the preparation of a cash budget could assist a company to identify short-term problems.

You are hired as a financial manager and your first task is to establish the cash budget of your firm.

You gathered the following information.

The firm receives all income from sales

• Sales estimates (in millions)
  12. Q1 = 1,000; Q2 = 1,250; Q3 = 1,500; Q4 = 2,000; Q1 next year = 1,200
• Accounts receivable
  12. Beginning receivables = $3000
  13. Average collection period = 45 days
• Accounts payable
  12. Purchases = 60% of next quarter’s sales
  13. Beginning payables = 1,200
  14. Accounts payable period is 45 days
• Other expenses
  12. Wages, taxes, and other expense are 25% of sales
  13. Interest and dividend payments are $100
  14. A major capital expenditure of $500 is expected in the second quarter
• The initial cash balance is $100 and the company maintains a minimum balance of $50

Nicole Martins is the controller at UMC Corp., a publicly-traded manufacturing company. Last year, UMC had annual sales revenue of $15 million. The first quarter of this year just ended, and Nicole needs to prepare a trial balance so she can prepare the quarterly financial statements. However, trial balance is out of balance by $750 (credits exceed debits). Nicole is running out of time as the report is due today! Therefore, she decides to balance by plugging the $750 into the Equipment account. She chose the Equipment account because it has the largest account balance. Therefore, with the $750 added, it will be the least-misstated account. Identify the stakeholders in the case. Explain the ethical issues the case involves. If you were Nicole, what would you do?

Suppose you have $250,000 of loan. The terms of the loan are that the yearly interest is 6% compounded quarterly. You are to make equal quarterly payments of such magnitude as to repay this loan over 30 years.

(Keep all your answers to 2 decimal places, e.g. XX.12.)

(a) How much are the quarterly payments?

(b)  After 5 years' payments, what principal remains to be paid?

(c) How much interest is paid in the first quarter of the 6^th year?

(d) How much is the total interest paid over the 30 years?

(e) If you have a lump sum payment of $20,000 at the end of 5 years, and maintain the same level of quarterly payment, when will you pay off your loan, i.e. how many years in total will you pay off the loan?

Glitter Inc. uses one-quarter common stock and three-quarters debt to finance their operations. The after-tax cost of debt is 7 percent and the cost of equity is 13 percent.
The management of Glitter Inc. is considering an expansion project that costs $1.2 million. The project will produce a cash inflow of $45,000 in the first year and 150,000 in each of the following 10 years (i.e., $150,000 in years 2 through 11.. What is the WACC and should Glitter Inc. invest in this project?

a. 10 percent, no because the NPV is negative

b. 10 percent, yes because the NPV is positive

c. 8.5 percent, no because the NPV is negative

d. 8.5 percent, yes because the NPV is positive

HOW CAN I SOLVE IT BY HAND STEP BY STEP PLEASE

DO NOT USE EXCEL

Stuart Sporting Goods Corporation makes two types of racquets, tennis and badminton. The company uses the same facility to make both products even though the processes are quite different. The company has recently converted its cost accounting system to activity-based costing. The following are the cost data that Jane Price, the cost accountant, prepared for the third quarter of 2018 (during which Stuart made 70,000 tennis racquets and 30,600 badminton racquets).

Franklin Sporting Goods Corporation makes two types of racquets, tennis and badminton. The company uses the same facility to make both products even though the processes are quite different. The company has recently converted its cost accounting system to activity-based costing. The following are the cost data that Jane Price, the cost accountant, prepared for the third quarter of 2018 (during which Franklin made 72,000 tennis racquets and 30,400 badminton racquets).

Inspectors are paid according to the number of actual hours worked, which is determined by the number of racquets inspected. Engineers who set up equipment for both products are paid monthly salaries. TV commercial fees are paid at the beginning of the quarter. Facility-level cost includes depreciation of all production equipment.

Required

1. Compute the cost per unit for each product.

2. If management wants to price badminton racquets 30 percent above cost, what price should the company set?

Horten Sporting Goods Corporation makes two types of racquets, tennis and badminton. The company uses the same facility to make both products even though the processes are quite different. The company has recently converted its cost accounting system to activity-based costing. The following are the cost data that Jane Price, the cost accountant, prepared for the third quarter of 2018 (during which Horten made 70,000 tennis racquets and 30,000 badminton racquets).

   
Inspectors are paid according to the number of actual hours worked, which is determined by the number of racquets inspected. Engineers who set up equipment for both products are paid monthly salaries. TV commercial fees are paid at the beginning of the quarter. Facility-level cost includes depreciation of all production equipment.

   
Required

Compute the cost per unit for each product.

If management wants to price badminton racquets 30 percent above cost, what price should the company set?

Thornton Sporting Goods Corporation makes two types of racquets, tennis and badminton. The company uses the same facility to make both products even though the processes are quite different. The company has recently converted its cost accounting system to activity-based costing. The following are the cost data that Jane Price, the cost accountant, prepared for the third quarter of 2018 (during which Thornton made 68,500 tennis racquets and 29,000 badminton racquets).

Inspectors are paid according to the number of actual hours worked, which is determined by the number of racquets inspected. Engineers who set up equipment for both products are paid monthly salaries. TV commercial fees are paid at the beginning of the quarter. Facility-level cost includes depreciation of all production equipment.

Required

1. Compute the cost per unit for each product.

2. If management wants to price badminton racquets 30 percent above cost, what price should the company set?

Hamby Corporation Balance Sheet June 30 Assets Cash $ 71,000 Accounts receivable 131,000 Inventory 45,500 Plant and equipment, net of depreciation 215,000 Total assets $ 462,500 Liabilities and Stockholders’ Equity Accounts payable $ 76,000 Common stock 307,000 Retained earnings 79,500 Total liabilities and stockholders’ equity $ 462,500 The company managers have made the following additional assumptions and estimates: Estimated sales for July, August, September, and October will be $260,000, $280,000, $270,000, and $290,000, respectively. All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July. Each month’s ending inventory must equal 25% of the cost of next month’s sales. The cost of goods sold is 70% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July. Monthly selling and administrative expenses are always $48,000. Each month $5,000 of this total amount is depreciation expense and the remaining $43,000 relates to expenses that are paid in the month they are incurred. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30. How much is the Company's expected cash collections in the month of August?

How much is the Company's expected merchandise purchases in the month of September?