The transactions listed below are typical of those involving New Books Inc. and Readers’ Corner. New Books is a wholesale merchandiser and Readers’ Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers’ Corner are made with terms n/30, and the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended August 31.

1. New Books sold merchandise to Readers’ Corner at a selling price of $550,000. The merchandise had cost New Books $415,000.

2. Two days later, Readers’ Corner complained to New Books that some of the merchandise differed from what Readers’ Corner had ordered. New Books agreed to give an allowance of $10,000 to Readers’ Corner. Readers’ Corner also returned some books, which had cost New Books $2,000 and had been sold to Readers’ Corner for $3,500.

3. Just three days later, Readers’ Corner paid New Books, which settled all amounts owed.

Required:

1. Indicate the effect (direction and amount) of each transaction on the Inventory balance of Readers’ Corner.

2. Prepare the journal entries that Readers’ Corner would record and show any computations.

Oxygen Optimization is considering buying a new purification system. The new system would be purchased today for 19,200 dollars. It would be depreciated straight-line to 1,400 dollars over 2 years. In 2 years, the system would be sold and the after-tax cash flow from capital spending in year 2 would be 2,000 dollars. The system is expected to reduce costs by 6,600 dollars in year 1 and by 14,700 dollars in year 2. If the tax rate is 50 percent and the cost of capital is 7.78 percent, what is the net present value of the new purification system project?

Please show your work

Snow Inc. has just completed development of a new cell phone. The new product is expected to produce annual revenues of $1,400,000. Producing the cell phone requires an investment in new equipment, costing $1,500,000. The cell phone has a projected life cycle of 5 years. After 5 years, the equipment can be sold for $180,000. Working capital is also expected to decrease by $200,000, which Snow will recover by the end of the new product’s life cycle. Annual cash operating expenses are estimated at $820,000. The required rate of return is 8%.

I got 874,392 for the NPV, but the website for my homework says it's incorrect.

Holland Inc. has just completed development of a new cell phone. The new product is expected to produce annual revenues of $1,350,000. Producing the cell phone requires an investment in new equipment, costing $1,440,000. The cell phone has a projected life cycle of 5 years. After 5 years, the equipment can be sold for $180,000. Working capital is also expected to increase by $180,000, which Holland will recover by the end of the new product’s life cycle. Annual cash operating expenses are estimated at $810,000. The required rate of return is 8%.

1. Prepare a schedule of the projected annual cash flows.

2. Calculate the NPV using only discount factors listed below:

Discount Factor

Year 0    1.00000

Year 1    0.92593

Year 2    0.85734

Year 3    0.79383

Year 4    0.73503

Year 5    0.68058

3. Calculate the NPV using discount factors listed below:

Discount Factor

Year 0    1.00000

Year 1-4 3.31213

Year 5    0.68058

New Retirementality Chapters 9 - 10 - 11

Chapter 9: A New Mindset: Retire on Purpose

“Too many people die with their music still in them.” -Oliver Wendell Holmes

1a. The revolution of retirement planning for the purposeful retiree is:

A. the most fertile period of life for the meaningful pursuit

B. a time to enjoy one’s life accomplishments

C. a time to see the world

D. take it easy and relax

Chapter 10: The New Meaning of Re-tired: Your Next 100,000 Miles

“Do not think of retiring until the world will be sorry to see you retire.” -Samuel Johnson

1b. Your next 100,000 miles will depend on you taking life easy and restraining activities to have a long happy life.

A. True. B. False

Chapter 11: Redefining Rich: Bridging the Gap between Means and Meaning

“To allow me to do what I want to do every day” -Warren Buffett on the meaning of money

1c. Rich means?

A. Deciding what gives me meaning.

B. Able to articulate the correct way to preserve my money

C. “A” and “B”

D. “A” primarily

f you are advising a new client to open a new business, would you advise him to form a corporation or a single proprietorship as a small business? Explain.

New Revenue Recognition Standard

Please discuss some of the key changes included in the new standard. The new standard was implemented this year for publicly traded companies and next year for privately-held companies. Have publicly traded companies encountered challenges with implementation?

The New Horizons mission has continued to explore the solar system. When was New Horizons launched? Where is New Horizons now? Describe at least two discoveries that New Horizons has made so far.

On January 1, 2020, Concord Corporation purchased a new machine for $4130000. The new machine has an estimated useful life of nine years and the salvage value was estimated to be $143000. Depreciation was computed using the sum-of-the-years'-digits method. What amount should be shown in Concord's balance sheet at December 31, 2021, net of accumulated depreciation, for this machine?

$2535200

$3987000

$3332600

$2623800

Wendell’s Donut Shoppe is investigating the purchase of a new $42,700 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $6,400 per year. In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 2,400 dozen more donuts each year. The company realizes a contribution margin of $2.00 per dozen donuts sold. The new machine would have a six-year useful life.

Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables.

Required:

1. What would be the total annual cash inflows associated with the new machine for capital budgeting purposes?

2. What discount factor should be used to compute the new machine’s internal rate of return? (Round your answers to 3 decimal places.)

3. What is the new machine’s internal rate of return? (Round your final answer to nearest whole percentage.)

4. In addition to the data given previously, assume that the machine will have a $12,840 salvage value at the end of six years. Under these conditions, what is the internal rate of return? (Round your final answer to nearest whole percentage.)