2071 end of semester test 1. Dokley is deciding whether to accept a project requiring a $110,000 investment. Projected operating cash flows are: yr 1 30,000 yr 2 40,000 yr 3 60,000 if HT requires rate of return is 5.7% how much is NPV 2. An investment costing $950,000 will yield cash inflows of $400,000 per year for 2 years, then $200,000 for the next 2 yrs. required rate of return is 8.2%. what is internal rate of return 3. Billings Rail Company’s sales for the next five months are as follows: February $175,000 March $160,000 April $145,000 May $135,000 June $130,000 Collection history for the company indicates that 50% of sales are collected in the month of the sale, 30% is collected in the following month, 10% is collected two months later and 10% is uncollectible. How much are total budgeted cash receipts for the second quarter? 4. The delivery trucks of Slavin Transport Company incurred $3,600 of maintenance costs during the busiest month of 2004, in which 12,000 miles were driven collectively. During the slowest month, $2,800 in maintenance costs were incurred, and 8,000 miles were driven. Using the high-low method, what maintenance cost would the company expect to incur if 15,000 miles were driven? 5. Consider the following information for Executive Electronics. Total assets Noninterest-bearing current liabilities Net income Interest expense Tax rate Cost of capital Required rate of return 12/31/2011 $11,800,000 500,000 700,000 2,100,000 35% 7% 9% 12/31/2012 $11,000,000 520,000 800,000 300,000 35% 8% 10% How much is residual income for 2012? 6. Harris Company’s sales revenue for 2005 was $300,000. Harris has one product that sells for $25 and has variable costs of $18. Fixed costs total $155,000. How many units must Harris sell to break even? Round your answer up to the nearest whole unit. 7. Beginning raw materials inventory for Johnson Inc. was $15,000. Ending raw materials was $7,000. Goods completed during the year were $30,000. Purchases of raw materials totaled $25,000. How much were the raw materials used in current manufacturing costs?