Product A is one of the joint products in a manufacturing process. Management is considering whether to sell Product A at the split-off point or to process Product A further into Product B, and has gathered data regarding the following factors: The selling price of each product. The variable manufacturing costs incurred after the split-off point. The avoidable fixed manufacturing costs incurred after the split-off point. The variable manufacturing costs incurred before the split-off point. Which factors are relevant in the decision to sell Product A as is or to process further into Product B?

Product A is one of the joint products in a manufacturing process. Management is considering whether to sell Product A at the split-off point or to process Product A further into Product B, and has gathered data regarding the following factors: The selling price of each product. The variable manufacturing costs incurred before the split-off point. The avoidable fixed manufacturing costs incurred after the split-off point. The variable manufacturing costs incurred after the split-off point. Which factors are relevant in the decision to sell Product A as is or to process further into Product B?

Acme Company manufactures widgets. A major foreign distributor has offered to buy an unusually large quantity (1,750 units) at a reduced price. If Acme accepts the special order, it will incur additional one-time legal costs in connection that increase the minimum per-unit selling price that Acme must charge to break even on the order by $32 per unit. At the last minute, the customer decides to reduce the special order to 1,400 units. This change has no effect on the total amount of one-time legal costs, but it does increase the minimum per-unit selling price that Acme must charge to break even on a special order to $729 per unit. What are Acme’s per-unit variable manufacturing costs?

Acme Company plans to invest $133,000 in new equipment that has a useful life of 4 years and a salvage value of $20,000. Acme expects the new equipment to produce annual net cash inflows of $38,000 in Years 2 through 4. Assuming the project’s internal rate of return is 8%, what is the expected net cash inflow in year 1? Round to the nearest whole dollar amount and do not enter a dollar sign or a decimal point (e.g., enter 89, not $89.00). 

Acme Company is considering investing in Project X, which requires an initial investment of $285,000. Project X has an economic life of ten years, and the project is expected to generate the following results each year: cash revenues of $250,000, cash operating expenses of $208,000, depreciation expense of $10,000, and incremental operating income of $32,000. What is the payback period of this project in years? Round to one decimal place.

ABC Company anticipates its sales to be a bit lower than normal in January and February of the coming year due to major road construction on the street where it is located, which will draw away foot traffic from the store. The company anticipates that this will reduce its sales in these two months by 5%. Use the information from Problems 2–3 to update the sales forecast.

Assume you are the financial manager for a large electronics retailer. You are going to prepare a cashforecast. What key cash inflows and outflows do you anticipate will be in your forecast? Identify at least 5 cash inflows and at least 5 cash outflows, respectively. Your answer should be no more than 300 words.

ABC Company’s cost of goods sold last year was 60%. It anticipates that this will be the same in the coming year. Its sales returns and allowances are small, normally 1% of sales. Use the information from Problems 1–3 to estimate the company’s sales returns and allowances, net sales, and cost of goods sold and calculate its gross margin. (HINT: Calculate the sales returns and allowances by multiplying the Gross Sales by 1%. Then deduct this from Gross Sales to give Net Sales. Then use the Net Sales to calculate Cost of Goods Sold and finally the Gross Margin.)

SodaFizz has outstanding debt that has a market value of $3 million. The company’s stock has a book value of $2 million and a market value of $6 million. What are the weights in SodaFizz’s capital structure?

Using the original data from the spreadsheet in Q9, conduct a similar calculation to determine the yearly rate of return, for the following scenarios:House Purchase Price increases by 5% above initial price, leave all other values unchanged.House Purchase Price increases by 10% above initial price, leave all other values unchanged.House Purchase Price increases by 15% above initial price, leave all other values unchanged.These calculations should give you 3 different yearly rates of return for scenarios 1 to 3 above, respectively. Compare the change between the return rates as follows:Submit your spreadsheet with the above calculations and comment on how the successive changes (successive increases of 5% in scenarios 1 to 3 above) in house purchase price affects the yearly rate of return using the results from the % change equation above.