1. Jumbotron Inc. had sales of $8,000 in November, $14,000 in December, and projects sales of $10,000 for January, $12,000 for February, and $8,000 for March. The firm's cost of goods sold every month is equal to 70% of the next month's sales. The firm collects its receivables in 60 days and pays its payables in 30 days. The firm begins January 1 with $10,000 in cash. All sales and purchases are on credit.
What is Jumbotron's cash balance at the end of January?
A. $10,000
B. $11,000
C. $12,000
D. $13,500
E. $14,000
2. Project K costs $52125 today. Its expected cash inflows are $12000/year for 8 years. With a WACC of 14%, what is the project’s NPV?
3,564
3,482
3,541
3,816
3,195