The CEO of Smartphone Apps, LLC is preparing a loan application. Using the data below (only), prepare an Income Statement. Within this Income statement, add totals for Cost of Goods Sold, Sales General, Gross Margin, and Administrative, Earnings before Taxes and Interest, Pretax Income, and Net Income. Also evaluate the Profit Margin on Sales. Submit using a spreadsheet.
Net Revenue $1,458,000
Production Labor Costs $385,444
Material Costs $247,500
Marketing $127,000
Depreciation $58,122
Research and Development $98,000
Administrative $258,300
Interest Expense $21,608
Taxes 25% of pretax Income
Slot Precision Services, Inc. has five alternative broaching processes/ machines that are being studied. Only one will be selected and the data is shown below. Recommend the choice for management that uses the internal rate of return criterion. Compare this with the decision with that of a Present Worth criterion.
Alternatives Investment in year 0 Annual Cash Flow Salvage value in last year
1 $50,000 $18,000 $0
2 $250,000 $85,000 $75,000
3 $350,000 $105,000 $125,000
4 $600,000 $150,000 $400,000
5 $800,000 $165,000 $600,000