The capital investment committee of Hampton Landscaping Company is considering two capital investments

The capital investment committee of Hampton Landscaping Company is considering two capital investments. The estimated income from operations and net cash flows from each investment are as follows:



Each project requires an investment of $64,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% for purposes of the net present value analysis.

Required:
1a. Compute the average rate of return for each investment. If required, round your answer to one decimal place.
1b. Compute the net present value for each investment. Use the present value of $1 table present above. If required, round to the nearest dollar.
2. Prepare a brief report for the capital investment committee, advising it on the relative merits of the two investments.

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The budget committee of Clipboard Office Supply has assembled the following data

P21-21A Preparing an operating budget

The budget committee of Clipboard Office Supply has assembled the following data. As the business manager, you must prepare the budgeted income statements for May and June 2011.
a. Sales in April were $50,000. You forecast that monthly sales will increase 2.0% in May and 2.4% in June.
b. Clipboard maintains inventory of $9,000 plus 25% of sales revenue budgeted for the following month. Monthly purchases average 50% of sales revenue in that same month. Actual inventory on April 30 is $13,000, sales budgeted for July are $65,000.
c. Monthly salaries amount to $3,000. Sales commissions equal 4% of sales for that month. Combine salaries and commissions into a single figure.
d. Other monthly expenses are as follows:
Rent expense $2,600, paid as incurred
Depreciation expense $ 300
Insurance expense $ 200, expiration of prepaid amount
Income tax 20% of operating income

Requirement:
1. Prepare Clipboard Office Supply's budgeted income statements for May and June. Show cost of goods sold computations. (Round all amounts to the nearest $100. (Round amounts ending in $50 or more upward, and amounts ending in less than downward). For example, budgeted May sales are $51,000 ($50,000 x 1.02), and June sales are $52,200 ($51,000 x 1.024)

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