Steering Corporation is making a $90,650 investment in equipment with a 5-year life. The company uses the straight-line method of depreciation and has a tax rate of 20 percent. The company’s required rate of return is 13 percent. Click here to view factor tables What is the present value of the tax savings related to depreciation of the equipment? (Round present value factor calculations to 4 decimal places, e.g. 1.2151 and final answer to 0 decimal place, e.g. 125. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
The present value
$enter present value in dollars rounded to 0 decimal place
Martinez Hardy recently rejected a $24,400,000, five-year contract with the Vancouver Seals hockey team. The contract offer called for an immediate signing bonus of $9,150,000 and annual payments of $3,050,000. To sweeten the deal, the president of player personnel for the Seals has now offered a $26,630,000, five-year contract. This contract calls for annual increases and a balloon payment at the end of five years.
Year 1
$3,050,000
Year 2
3,130,000
Year 3
3,210,000
Year 4
3,290,000
Year 5
3,580,000
Year 5 balloon payment
10,370,000
Total
$26,630,000
Click here to view factor tables Suppose you are Hardy’s agent and you wish to evaluate the two contracts using a required rate of return of 15 percent. In present value terms, how much better is the second contract? (Round present value factor calculations to 4 decimal places, e.g. 1.2151 and final answers to 0 decimal places, e.g. 125. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Present value of old contract
enter a dollar amount
Present value of new contract
enter a dollar amount
In present value terms, the second contract is select an option than the old one.
Sipacore Industrial has estimated that production for the next five quarters will be:
Production Information
1st quarter, 2020
41,400 units
2nd quarter, 2020
37,600 units
3rd quarter, 2020
45,200 units
4th quarter, 2020
35,200 units
1st quarter, 2021
43,000 units
Finished units of production require 6 pounds of raw material per unit. The raw material cost is $7 per pound. There is $260,820 of raw material on hand at the beginning of the first quarter, 2020. Sipacore desires to have 15 percent of next quarter’s material requirements on hand at the end of each quarter. Prepare quarterly direct materials purchases budgets for Sipacore Industrial for 2020.
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Sipacore Industrial Direct Materials Purchases Budget For the Year Ending December 31, 2020
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Year
select an opening direct materials purchases budget item
enter a number of units
enter a number of units
enter a number of units
enter a number of units
enter a number of units
select an item
$enter a dollar amount
$enter a dollar amount
$enter a dollar amount
$enter a dollar amount
$enter a dollar amount
select a summarizing line for the first part
enter a total dollar amount for the first part
enter a total dollar amount for the first part
enter a total dollar amount for the first part
enter a total dollar amount for the first part
enter a total dollar amount for the first part
select between addition and deduction : select an item
enter a dollar amount
enter a dollar amount
enter a dollar amount
enter a dollar amount
enter a dollar amount
select a summarizing line for the second part
enter a total dollar amount for the second part
enter a total dollar amount for the second part
enter a total dollar amount for the second part
enter a total dollar amount for the second part
enter a total dollar amount for the second part
select between addition and deduction : select an item
enter a dollar amount
enter a dollar amount
enter a dollar amount
enter a dollar amount
enter a dollar amount
select a closing direct materials purchases budget item
$enter a total amount for the direct materials purchases budget
$enter a total amount for the direct materials purchases budget
$enter a total amount for the direct materials purchases budget
$enter a total amount for the direct materials purchases budget
$enter a total amount for the direct materials purchases budget
The Clinton Antique Mall budgeted credit sales in the first quarter of 2021 to be as follows:
January
$192,000
February
204,000
March
217,600
Credit sales in December 2020 are expected to be $240,000. The company expects to collect 75 percent of a month’s sales in the month of sale and 25 percent in the following month. Estimate cash receipts for each month of the first quarter of 2021.
Collection of credit sales
January
February
March
Collection of December sales
$enter a dollar amount
$enter a dollar amount
$enter a dollar amount
Collection of January sales
enter a dollar amount
enter a dollar amount
enter a dollar amount
Collection of February sales
enter a dollar amount
enter a dollar amount
enter a dollar amount
Collection of March sales
enter a dollar amount
enter a dollar amount
enter a dollar amount
$enter a total dollar amount
$enter a total dollar amount
$enter a total dollar amount
The Cinrich Antique Mall expects to make purchases in the first quarter of 2021 as follows:
January
$98,800
February
124,800
March
88,400
Purchases in December 2020 are expected to be $95,200. The company expects that 50 percent of a month’s purchases will be paid in the month of purchase and 50 percent will be paid in the following month. Estimate cash disbursements related to purchases for each month of the first quarter of 2021.
