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1. Starship, Inc.s budgeted sales are 460,000 bottles for February and 440,000 bottles for March. The companys policy requires maintaining bottles on hand at the end of each month equal to 8% of next month's budgeted unit sales. Each bottle is sold for $1.25. How many bottles should the company budget for production in February?

A.461,600 Units

B.460,000 Units

C.458,400 Units

D.495,200 Units

2. During June, the capital expenditures budget indicates a $52,000 purchase of equipment. The cash balance at the end of June is tentatively budgeted at a deficit of $10,000 after considering the operating cash receipts and disbursements. The company wants to maintain a minimum cash balance of $23,000. What is the minimum cash loan that must be planned to be borrowed from the bank during June?

A.$52,000

B.$85,000

C.$62,000

D.$33,000

3. For fiscal year 2015, Kincaid's Department Store had net operating income of income of $7,350,000. Average operating assets were $73,300,000The company's cost of capital (required rate of return) is 10 percent.

Calculate ROI and residual income for Kincaid's Department Store and comment on the company's profitability.

4. Adrienne Balboa, the owner of Adrienne Motors, is considering the addition of a paint and body shop to her automobile dealership. Construction of a building and the purchase of necessary equipment is estimated to cost $800,000, and both the building and equipment will be depreciated over 10 years using the straight-line method. The building and equipment have zero estimated residual value at the end of 10 years. Balboa's required rate of return for this project is 12 percent. Net income related to each year of the investment is as follows:

Revenue	$650,000
Less:
Material cost	70,000
Labor	150,000
Depreciation	80,000
Other	10,000
Income before taxes	340,000
Taxes at 40%	136,000
Net income	$204,000

a. Determine the net present value of the investment in the paint and body shop. Should Balboa invest in the paint and body shop?

b. Calculate the internal rate of return of the investment (approximate).

c. Calculate the payback period of the investment.

Please help solve the problems above. Greatly appreciated.

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