Use the cash budget worked out in Part (a) and the following additional informat
ID: 2802737 • Letter: U
Question
Use the cash budget worked out in Part (a) and the following additional information to prepare a forecast income statement for the first half of 2016 for the XYZ Store. (Note that the store maintains a safety stock of inventory.) Inventory at 12/31/16 was $180,000. .Depreciation is taken on a straight-line basis on $240,000 of assets with an average remaining life of 10 years and no salvage value. The tax rate is 34 percent. . Given the following information and that contained in Parts (a) and (b), construct a forecast balance sheet as of June 30, 2017, for the XYZ Store. XYZ Store balance sheet at December 31,2016 ASSETS LIABILITIES AND EQUITY Cash Accounts receivable Inventory Fixed assets, net Accounts payable Bonds Common stock and retained earnings $100,000 $100,000 500,000 427,500 180,000 240,00 47.500 . ABC Construction must replace a number of its concrete mixer trucks with new trucks. It has received two bids and has evaluated closely the performance characteristics of the various trucks. The truck A, which costs $78,000 is top-of-the-line equipment. The truck has a life of eight years, assuming that the engine is rebuilt in the fifth year Maintenance costs of $2,500 a year are expected in the first four years, followed by total maintenance and rebuilding costs of $12,000 in the fifth year. During the last three years, maintenance costs are expected to be $4,000 a year. At the end of eight years the truck will have an estimated scrap value of $10,000.Explanation / Answer
This question doesnot have enough details that i can answer however i can anser some part of question 2, here you have to calulate NPV of the machine in both the scenario over the years
total cost of machine includes = maintainence cost inucurred over the period discounted to bring its NPV, also dont forget to consider tax saving due to depreciation
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.