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MBA, Ph.D in Management
Harvard university
Feb-1997 - Aug-2003
Professor
Strayer University
Jan-2007 - Present
2. Detmer Enterprises has budgeted sales for the next three months as follows:
Budgeted Sales in Units
January 7,200 units
February 5,400 units
March 4,600 units
Past experience has shown that the ending inventory for each month should be equal
to 25% of the next month's expected sales in units. The company is in the process
of preparing a production budget.Calculate the total number of units budgeted to be produced in January. Enter your
answer as a number (i.e., 1,000). Do not use the $, decimals, or type the word units
after your answer.
3. Krauth Company purchased a machine for $117,000. The machine has a life of seven years
with no salvage value. It is expected that the machine will generate annual net cash inflows
of $26,000 per year over its useful life. Assume Krauth Company employs a cost of capital
of 10% on all capital investment projects.
The internal rate of return (IRR) on the machine is closest to: A) 6%, B) 8% C)9% D) 10% E)12% F)15%
4. Shown below are the budgeted sales for ABC Company for the next six months:
Sales for Cash Sales on Account
January $18,000 $ 70,000
February $19,000 $ 90,000
March $24,000 $130,000
April $15,000 $100,000
May $26,000 $120,000
June $14,000 $ 95,000
On average, 40% of the sales on account are collected in the month of sale, 30% are
collected in the month following sale, 10% are collected in the second month following
sale, and the remaining 20% is collected three months after the month of sale.
Calculate the expected cash collections for April. Do not use decimals in your answer.
5. Shown below are the budgeted sales for ABC Company for the next six months:
Sales for Cash Sales on Account
January $18,000 $ 70,000
February $19,000 $ 90,000
March $24,000 $130,000
April $15,000 $100,000
May $26,000 $120,000
June $14,000 $ 95,000
On average, 40% of the sales on account are collected in the month of sale, 30% are
collected in the month following sale, 10% are collected in the second month following
sale, and the remaining 20% is collected three months after the month of sale.
Calculate ABC Company's budgeted accounts receivable at June 30. Do not use decimals
in your answer.
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