Question

Acme Manufacturing is producing $4,060,000 worth of goods this year and expects to sell its entire production. It also is planning to purchase $1,500,000 in new equipment during the year. At the beginning of the year, the company has $500,000 in inventory in its warehouse.

1. Find actual investment and planned investment if:

(a) Acme actually sells $3,850,000 worth of goods.

(b) Acme actually sells $4,000,000 worth of goods.

(c) Acme actually sells $4,200,000 worth of goods

Answer 1

Answer:

actual investment = $1560000

actual investment = $1710000

actual investment = $1360000

and

planned investment = $1500000

Explanation:

given data

producing goods = $4,060,000

new equipment = $1,500,000

inventory in warehouse = $500,000

to find out

actual investment and planned investment

solution

first if sell at = $3850000

unplanned investment is = producing goods - sell

unplanned investment = $4,060,000 - $3850000

unplanned investment = $60000

so

actual investment = planned investment + unplanned investment

actual investment = $1,500,000 + $60,000

actual investment = $1560000

and

next if actually sells is = $4,000,000

unplanned investment = $4,060,000 - $4,000,000

unplanned investment = $210,000

so

actual investment = planned investment + unplanned investment

actual investment = $1,500,000 + $210,000

actual investment = $1710000

and

next if actually sells is = $4,200,000

unplanned investment = $4,060,000 - $4,200,000

unplanned investment = $140,000

so

actual investment = planned investment + unplanned investment

actual investment = $1,500,000 + $140,000

actual investment = $1360000

Answer 2

The actual investments will be $1710000, $1560000, and $1360000.

a. The unplanned investment will be:

= $4060000 - $3850000

= $210000

Actual investment = Planned investment + Unplanned investment

= $1500000 + $210000

= $1710000

b. The unplanned investment will be;

= $4060000 - $4000000

= $60000

Actual investment = Planned investment + Unplanned investment

= $1500000 + $60000

= $1560000

c. The unplanned investment will be;

= $4060000 - $4200000

= -$140000

Actual investment = Planned investment + Unplanned investment

= $1500000 - $140000

= $1360000

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