The sales manager of ABC Inc. submitted the forecasted credit sales of products for the the last six months of 2014 for budgetary purposes. 1) Sales Forecast 2014 (Units) July $ 200,000 August $ 225,000 September $ 164,000 The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: Collections on credit sales: 45% in month of Sales 35% in the first month following sales 20% in the second month following sales Given these data., the total cash collected during July, August and September would be: XYZ Inc. is working on its cash budget for June. The budgeted beginning cash balance is $14,000. Budgeted Cash Receipts total $183,000 and budgeted Cash Disbursements total $182,000. The desired ending Cash Balance is $33,000. The company has a line-of-credit agreement with its bank up to $80,000 to borrow in case the Cash Balance at the end of a month does not meet the aforementioned minimum balance. ) Kimmel Company. has provided the following data concerning a proposed investment project: Initial investment $250,000 Life of the project 10 years Annual net cash inflows $32,000 Salvage value $5,000 The company uses a discount rate of 15%. Required: Compute the net present value of the project. The management of Erion Corporation is considering the purchase of an automated molding machine that would cost $280,534, would have a useful life of 5 years, and would have no salvage value. The automated molding machine would result in cash savings of $74,000 per year due to lower labor and other costs. Required: Determine the internal rate of return on the investment in the new automated molding machine. Show your work!
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