View the step-by-step solution to:

# Juro Supply forecasts purchases of 12,200 units in June. It sells each unit for \$10. The firm has 1,000 units on hand on June 1.

1. Juro Supply forecasts purchases of 12,200 units in June. It sells each unit for \$10.50. The firm has 1,000 units on hand on June 1. The desired ending inventory on June 30th is to be 20% higher than beginning inventory. Total dollar sales for June is expected to be:
a. \$119,700
b. \$126,000
c. \$128,100
d. \$130,200
2. Allen Co.'s sales are 10% cash and 90% on credit. Credit sales are collected as follows: 30% in month of sale, 50% the next month, 20% in the following month. On 12/31, the accounts receivable balance is \$54,000, of which \$12,000 is from November sales. Total sales for January are budgeted to be \$100,000. Cash receipts budgeted for January total:
a. \$70,000
b. \$70,400
c. \$74,000
d. \$79,000
3. A boat costs \$108,00 and, uninsured, was wrecked the first day it was used. It either can be disposed for \$11,000 cash and replaced with a similar boat costing \$110,000, or rebuilt for \$98,000 and be brand new as far as operating characteristics and looks are concerned. The net relevant cost of replacing the boat is:
a. \$ 87,000
b. \$ 97,000
c. \$ 99,000
d. \$110,000
4. The relevant cost of rebuilding the boat described in the above question is:
a. \$ 97,000
b. \$ 98,000
c. \$ 99,000
d. \$110,000
5. Omaha Plating Corporation is considering purchasing a machine for \$1,500,000. The machine will generate a net after-tax income of \$100,000 per year for 15 years. The firm will use straight-line depreciation for the new machine over 10 years with no residual value. What is the payback period for the new machine?
a. 4 years
b. 5 years
c. 6 years
d. 10 years
e. 15 years
6. Carmino Company is considering an investment in an asset that generates net after-tax income of \$6,000 at the end of each year of its four-year life. The asset has no salvage value. The firm is in the 40% tax bracket. The book values of the investment at the beginning of each year are:
Year 1-\$30,000; Year 2 -\$15,000; Year 3 -\$7,500; Year 4 -\$3,750
The asset's book rate of return on average investment is:
a. 12%
b. 27%
c. 36%
d. 43%
USE THE ABOVE QUESTION TO ANSWER THE FOLLOWING ONE.
7. The amount of after-tax net cash inflow from the asset in Year 3 is:
a. \$ 6,000
b. \$ 7,500
c. \$ 8,100
d. \$13,500

1. Juro Supply forecasts purchases of 12,200 units in June. It sells
each unit for \$10.50. The firm has 1,000 units on hand on June 1. The
desired ending inventory on June 30th is to be 20% higher than beginning
inventory. Total dollar sales for June is expected to be:
\$119,700
\$126,000
\$128,100
\$130,200
2. Allen Co.'s sales are 10% cash and 90% on credit. Credit sales are
collected as follows: 30% in month of sale, 50% the next month, 20% in
the following month. On 12/31, the accounts receivable balance is
\$54,000, of which \$12,000 is from November sales. Total sales for
January are budgeted to be \$100,000. Cash receipts budgeted for January
total:
\$70,000
\$70,400
\$74,000
\$79,000
3. A boat costs \$108,00 and, uninsured, was wrecked the first day it was
used. It either can be disposed for \$11,000 cash and replaced with a
similar boat costing \$110,000, or rebuilt for \$98,000 and be brand new
as far as operating characteristics and looks are concerned. The net
relevant cost of replacing the boat is:
a. \$ 87,000
b. \$ 97,000
c. \$ 99,000
d. \$110,000
4. The relevant cost of rebuilding the boat described in the above
question is:
\$ 97,000
\$ 98,000
\$ 99,000
\$110,000
5. Omaha Plating Corporation is considering purchasing a machine for
\$1,500,000. The machine will generate a net after-tax income of \$100,000
per year for 15 years. The firm will use straight-line depreciation for
the new machine over 10 years with no residual value. What is the
payback period for the new machine?
4 years
5 years
6 years
10 years
15 years
6. Carmino Company is considering an investment in an asset that
generates net after-tax income of \$6,000 at the end of each year of its
four-year life. The asset has no salvage value. The firm is in the 40%
tax bracket. The book values of the investment at the beginning of each
year are:
Year 1-\$30,000; Year 2 -\$15,000; Year 3 -\$7,500; Year 4 -\$3,750
The asset's book rate of return on average investment is:
12%
27%
36%
43%
USE THE ABOVE QUESTION TO ANSWER THE FOLLOWING ONE.
7. The amount of after-tax net cash inflow from the asset in Year 3 is:
\$ 6,000
\$ 7,500
\$ 8,100
\$13,500

### Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

### -

Educational Resources
• ### -

Study Documents

Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

Browse Documents