PROJECT A - Case 9-30
Student Name:


SALES BUDGET:
April May June Quarter
Budgeted unit sales
Selling price per unit
Total Sales


SCHEDULE OF EXPECTED CASH COLLECTIONS:
April May June Quarter
February sales
March sales
April sales
May sales
June sales
Total Cash Collections


MERCHANDISE PURCHASES BUDGET:
April May June Quarter
Budgeted unit sales
Add desired ending inventory
Total needs
Less beginning inventory
Required purchases
Cost of purchases @ $4 per unit


BUDGETED CASH DISBURSEMENTS FOR MERCHANDISE PURCHASES:
April May June Quarter
Accounts payable
April purchases
May purchases
June purchases
Total cash payments


EARRINGS UNLIMITED
CASH BUDGET
FOR THE THREE MONTHS ENDING JUNE 30
April May June Quarter
Cash balance
Add collections from customers
Total cash available

Less Disbursements
Merchandise purchases
Advertising
Rent
Salaries
Commissions
Utilities
Equipment purchases
Dividends paid
Total Disbursements

Excess (deficiency) of receipts
over disbursements
Financing:
Borrowings
Repayments
Interest
Total financing

Cash balance, ending


EARRINGS UNLIMITED
BUDGETED INCOME STATEMENT
FOR THE THREE MONTHS ENDED JUNE 30

Sales -
Variable expenses:
Cost of goods sold -
Commissions - -
Contribution Margin -
Fixed expenses:
Advertising -
Rent -
Salaries -
Utilities -
Insurance -
Depreciation - -
Net operating income -
Interest expense -
Net income -


EARRINGS UNLIMITED
BUDGETED BALANCE SHEET
JUNE 30

Assets:

Cash
Accounts receivable (see below)
Inventory
Prepaid insurance
Property and equipment, net
Total assets


Liabilities and Stockholders' Equity

Accounts payable, purchases
Dividends payable
Capital stock
Retained earnings (see below)
Total liabilities and stockholders' equity


Accounts receivable at June 30:
May sales x ?%
June sales x ?%
Total


Retained earnings at June 30:
Balance, March 31
Add net income
Total
Less dividends declared
Balance, June 30

Clark Paints: The production department has been investigating possible ways to trim total production costs. One possibility currently being examined is to make the paint cans instead of purchasing them. The equipment needed would cost $200,000, with a disposal value of $40,000, and it would be able to produce 5,500,000 cans over the life of the machinery. The production department estimates that approximately 1,100,000 cans would be needed for each of the next five years.

The company would hire three new employees. These three individuals would be full-time employees working 2,000 hours per year and earning $12.00 per hour. They would also receive the same benefits as other production employees, 18% of wages, in addition to $2,500 of health benefits.

It is estimated that the raw materials will cost 25¢ per can and that other variable costs would be 5¢ per can. Since there is currently unused space in the factory, no additional fixed costs would be incurred if this proposal is accepted.

It is expected that cans would cost 45¢ each if purchased from the current supplier. The company's minimum rate of return (hurdle rate) has been determined to be 12% for all new projects, and the current tax rate of 35% is anticipated to remain unchanged. The pricing for a gallon of paint, as well as the number of units sold, will not be affected by this decision. The unit-of-production depreciation method would be used if the new equipment is purchased.

Required:
1. Based on the above information and using Excel, calculate the following items for this proposed equipment purchase:
o Annual cash flows over the expected life of the equipment
o Payback period
o Annual rate of return
o Net present value
o Internal rate of return

2. Would you recommend the acceptance of this proposal? Why or why not? Prepare a short double-spaced Word paper elaborating and supporting your answer.

Can I get this project for November 20, 2011 the template above is what I have to use
Thank you Jawaad