Reference no: EM132835223

Questions-

Q1. Waunakee Metals expects sales for the year to be 100,000 units, with quarterly sales of 20%, 25%, 30%, and 25%, respectively. The sales price is expected to be $40. Management desires an ending finished goods inventory each quarter of 20% of the next quarter's sales volume. Each unit requires 3 kilograms of materials at a cost of $5 per kilogram. Management desires an ending raw materials inventory each quarter of 10% of the next quarter's production needs. What is the budgeted production (in units) in Q2?

a. 31,000

b. 26,000

c. 25,000

d. 21,000

Q2. Waunakee Metals expects sales for the year to be 100,000 units, with quarterly sales of 20%, 25%, 30%, and 25%, respectively. The sales price is expected to be $40. Management desires an ending finished goods inventory each quarter of 20% of the next quarter's sales volume. Each unit requires 3 kilograms of materials at a cost of $5 per kilogram. Management desires an ending raw materials inventory each quarter of 10% of the next quarter's production needs. What is the budgeted cost for materials to be purchased (in $) in Q2?

a. $394,500

b. $390,000

c. $130,000

d. $433,500

Q3. Seventeen Seconds, Inc. is considering a long-term investment. The investment will require an investment of $40,000. It will have a useful life of 2 years, and no salvage (i.e., ending) value. Annual cash savings from the investment are $24,000. Assume that cash flows other than the initial investment occur at the end of the year, and that the cost of capital (i.e., discount rate) is 10%. Calculate the net present value of the investment (rounded to the nearest dollar).

a. $7,273

b. $8,000

c. $1,653

d. $41,653