A cash flow that only occurs once is referred to as:

The resources used in the manufacturing process are frequently called

This question is worth a total of 14 points A. Serrano is opening Serrano Realty on January 2.  For several weeks she has been busy putting together an operating budget for the first quarter of operation for her new business.  Ms. Serrano has estimated her selling and administrative (S&A) costs as follows:                                                                                January            February           March             Depreciation                                       $    500             $   500           $   500             Marketing expenses                            $ 1,000             $   700           $   500             Miscellaneous costs                            $    250             $   200           $   200             Rent expense                                      $ 2,500             $2,500           $2,500             Salary expense                                    $ 2,000             $4,000           $4,000             Sales commissions                             $    500             $   600           $   700             Utilities expense                                 $    500             $   400           $   500               Total S&A costs before interest       $ 7,250             $8,900           $8,900 All selling and administrative costs are paid when incurred except utilities, marketing expenses, and sales commissions.  These items are paid in the month following the month incurred.           Required:  (NOTICE there are three (3) questions to this problem!) 1. Prepare a schedule of cash payments for selling and administrative expenses for January through March.  List each item and then total the month. (LABEL YOUR ACCOUNTS)        Jan.                              Feb.                             March   TOTAL Cash Payments                $                                 $                                       $   2.  How much will be owed for utilities as of March 31?   3.  Compute the amount of sales commissions payable as of March 31.      

Hamilton Company expects to begin operating on July 1, Year 1.  The company’s master budget contained the following operating expense budget:                                                                                   July                 August            September             Salary expense                                    $18,000           $18,000           $18,000             Sales commissions 5% of sales            15,000             16,000             12,000             Utilities                                                   1,400               1,400               1,400             Depreciation on store equipment           500                  500                  500             Rent                                                         3,600               3,600               3,600             Miscellaneous                                            900                  900                  900             Total operating expenses                    $39,400           $40,400           $36,400 Sales commissions are paid in cash in the month following the month in which the expense is recognized.  All other expense items requiring cash payment are paid in the month in which they are recognized.  The amount of commissions payable that would appear on the company’s September 30, Year 1 pro forma balance sheet is:

An investment yielding fixed annual payments is called a(n): 

Mickey Mouse Company is considering two investment opportunities whose cash flows are provided below: Year Investment A Investment B 0 ($15,000) ($9,000) 1     5,000   5,000 2     5,000   4,000 3     5,000   3,000 4     4,000   1,000 The company’s hurdle rate is 12%.  What is the present value index of Investment A?  (Do not round your present value factors and intermediate calculations.)

This question is worth a total of 14 points. Happy Company is considering investing in the following two mutually exclusive projects:                                                                   Annual Cash Inflows             Year                            Project A                    Project B                1                               $  2,500                       $  4,000                2                                   2,500                           3,000                3                                   2,500                           2,000                4                                   2,500                           1,000             Total                           $10,000                       $10,000   Required: (NOTICE there are three (3) questions to this problem!) 1.  Which project is more desirable strictly in terms of cash inflows? Why? 2.  Compute the present value of each project’s cash inflows assuming the company’s required rate of return is 10%.  (Round your numbers to the nearest two decimal places (the nearest penny).)    SHOW COMPUTATIONS!   3.  Suppose each project costs $8,000. Compute the Net Present Value of each project.  Which project should be accepted, if only one can be selected?  Why?  (Show computations to explain your answer if necessary.)                                                                                          Project A                         Project B  

Gus Gus Company has two investment opportunities.  Both investments cost $5,000 and will provide the same total future cash inflows.  The cash receipt schedule for each investment is given below:          Investment I Investment II Period 1 $1,000 $3,000 Period 2   1,000   2,000 Period 3   2,000   2,000 Period 4   4,000   1,000 Total $8,000 $8,000  Select the correct statement:

Dopey is considering a capital project that costs $16,000.  The project will deliver the following cash flows:            Year 1 Year 2 Year 3 Year 4 Year 5 $8,000 $6,000 $5,000 $6,000 $5,000  Using the incremental approach, the payback period for the investment is:

Mental break time.  This is your last Accounting test here at CCC.  You deserve an easy question.  What is the Accounting Equation?