Assume Laksko’s has credit sales of $462,400 in March, $507,500 in April, and $550,200 in May. Also assume that 64 percent of sales are collected in the month of sale, 35 percent are collected in the following month, and the remainder are never collected. Credit purchases are $224,600 in March, $236,700 in April, and $252,700 in May. Credit purchases are paid in 30 days. Interest is $12,400 a month, wages and other expenses are $64,400 a month. Fixed assets purchases of $119,500 are scheduled for April with additional purchases of $56,400 in May. The April 1 cash balance was $321,060 and taxes of $180,000 must be paid on April 15. What is the cash balance at the end of May?

Nadine’s Boutique has an accounts payable period of 30 days. Sales of $3,300, $3,400, $4,600, and $4,100 are expected for Quarters 1 through 4, respectively. The cost of goods sold is equal to 62 percent of the next quarter’s sales. The accounts payable balance is $975 as of the beginning of Quarter 1. What is the amount of the projected cash disbursements for accounts payable for Quarter 2 of next year? Assume a year has 360 days.

A bond had a price of $945.60 at the beginning of the year and a price of $977.09 at the end of the year. The bond’s par value is $1,000 and its coupon rate is4.5 percent. What was the percentage return on the bond for the year?

An investment that provides annual cash flows of $20,100 for 8 years costs $87,500 today. At what rate would you be indifferent between accepting the investment and rejecting it?

Project A costs $47,800 with cash inflows of $34,200 in Year 1 and $28,700 in Year 2. Project B costs $63,200 with cash inflows of $21,900 in Year 1 and $59,200 in Year 2. These projects are independent and have an assigned discount rate of 15 percent. Based on the profitability index, what is your recommendation concerning these projects?

Hatch Idea Labs purchased some equipment two years ago for $287,600. These assets are classified as five-year property for MACRS. The MACRS rates are .2, .32, .192, .1152, .1152, and .0576, for Years 1 to 6, respectively. The company is currently replacing this equipment so the old equipment is being sold for $150,000. What is the aftertax salvage value from this sale if the tax rate is 21 percent and no bonus depreciation is claimed?

A project will require spending $3,200,000 on new fixed assets that will be depreciated on a straight-line basis to a value of zero over five years, at which point the assets will be worthless. The project involves selling new products for $40,000 per unit, with a variable cost of $18,000 per unit. Annual fixed costs are expected to be $485,000. The company uses a 20 percent discount rate. What is the financial break-even point?

Bi-Lo Traders is considering a project that will produce sales of $29,850 and have costs of $17,900. Taxes will be $3,200 and the depreciation expense will be $1,675. An initial cash outlay of $1,450 is required for net working capital. What is the project’s operating cash flow?

Leung Crafts is contemplating the purchase of a new $218,000 computer-based order entry system. The system will be depreciated straight-line to zero over the system’s five-year life. No bonus depreciation will be taken. The system will be worth $20,000 at the end of five years. The company will save $73,500 before taxes per year in order processing costs and will reduce working capital by $18,600 on Day 1. The net working capital will return to its original level when the project ends. The tax rate is 21 percent. What is the internal rate of return for this project?

Pet Supply purchased $62,800 of fixed assets two years ago. The company no longer needs these assets so it is going to sell them today for $29,500. The assets are classified as five-year property for MACRS. The MACRS rates are .2, .32, .192, .1152, .1152, .0576, for Years 1 to 6, respectively. What is the net cash flow from this sale if the firm’s tax rate is 23 percent and no bonus depreciation is taken?