Honeysuckle Manufacturing has the following data: Selling Price Variable manufacturing cost Fixed manufacturing cost Variable selling & administrative costs 60 33 $ 250,000per month 9 Fixed selling & administrative costs $ 120,000per month What dollar sales volume does Honeysuckle need to break even? |

Honeysuckle Manufacturing has the following data: Selling Price Variable manufacturing cost Fixed manufacturing cost Variable selling & administrative costs 60 33 $ 250,000per month 9 Fixed selling & administrative costs $ 120,000per month What dollar sales volume does Honeysuckle need to break even? |

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The cash flows associated with a project can be represented by the following decision tree (conditional probabilities are in parentheses): Year 0 Year 1 -$800 $400 (4) $212 56 $500 (6) Year 2 $300 (5) $500 (5) $400 (5) $600 (15) Year 3 $200 (5) $400 (5) $400 (5) $600 (.5) $300 (5) $500 (5) $500 (5) $700 (5) Given this data, determine the expected NPV for this project if the appropriate cost of capital is 12.36 percent.
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A4 9a We find the following information on NPNG (No-Pain-No-Gain) Inc.: A4 9a EBIT = $2,000,000Depreciation = $250,000Change in net working capital = $100,000Net capital spending = $300,000 These numbers are projected to increase at the following supernormal rates for the next three years, and 5% after the third year for the foreseeable future: EBIT: 20%Depreciation: 10%Change in net working capital: 15%Net capital spending: 10% The firm’s tax rate is 35%, and it has 1,000,000 outstanding shares and $8,000,000 in debt. We have estimated the WACC to be 15%. a. Calculate the EBIT, Depreciation, Changes in NWC, and net capital spending for the next four years.
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3. Early in 2025, Dobbs Corporation engaged Kiner, Inc. to design and construct a complete modernization of Dobbs's manufacturing facility. Construction began on June 1, 2025 and was completed on December 31, 2025. Dobbs made the following payments to Kiner, Inc. during 2025: Date June 1, 2025 August 31, 2025 December 31, 2025 Payment $2,000,000 3,000,000 2,500,000 To help finance the construction, Dobbs issued the following during 2025: 1. $1,700,000 of 10-year, 9% bonds payable, issued at par on May 31, 2025, with interest payable annually on May 31. 2. 300,000 shares of no-par common stock, issued at $10 per share on October 1, 2025. In addition to the 9% bonds payable, the only debt outstanding during 2025 was a $425,000, 12% note payable dated January 1, 2024 and due January 1, 2025, with interest payable annually on January 1. Instructions Compute the amounts of each of the following (show computations): 1. Weighted-average accumulated expenditures qualifying for capitalization…
Based on the given information, how much is the weighted average cost of capital? *
Consider the following sets of investment projects n(years) A($) B($) C($) D($) 0 -3,500 -5,800 -5,200 -40,000 1 600 3,000 2,000 12,000 2 600 2,000 4,000 14,000 3 1,000 1,000 2,000 18,000 4 1,000 500 4,000 18,000 5 1,000 500 2,000 14,000 Compute the equivalent annual worth of each project at i=10% and determine the acceptability of each project.
JJ. 173.
10B
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On March 1, 2010, Dennis Company purchased land for an office site by paying $540,000 cash. Dennis began construction on the office building on March 1. The following expenditures were incurred for construction: March 1, 2010 - $360,000 April 1, 2010 - $504,000 May 1, 2010 - $900,000 June 1, 2010 - $1,440,000 The office was completed and ready for occupancy on July 1. To help pay for the construction, $720,000 was borrowed on March 1, 2010 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2010 was a $300,000, 11%, 6-year note payable dated January 1, 2010. (Hint: Be sure to include the cost of land in the total March 1 expenditure amount) Use commas, but do not use $ signs or cents. 1. How much are the weighted-average accumulated expenditures on the construction project during 2010?