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Break Even Analysis Report

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Added on  2020-04-07

Break Even Analysis Report

   Added on 2020-04-07

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1Break Even AnalysisName:Course Professor’s nameUniversity nameCity, StateDate of submission
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2Question 1 aAccountingMonthly cash budget for the three months ending 30th September 2018JulyAugustSeptemberBeginning cash balance26500(74000)61800ReceiptsFees140000160000200000Proceeds from sale of non current assets100000Total166500186000261800PaymentsSalaries and wages700007000070000Supplies8500920012000New equipment12000045000-Purchase of plant42000-61000Total Payments240500124200143000Cash Surplus(deficit)(74000)61800118800
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3b)impact to the cash budget if the company instead hired equipment for $10,000 p.m instead of buying the new equipmentJulyAugustSeptemberBeginning cash balance2650036500117300ReceiptsFees140000160000200000Proceeds from sale of non current assets100000Total166500206500317300PaymentsSalaries and wages700007000070000Supplies8500920012000New equipment100001000010,000Purchase of plant42000-61000Total Payments13000089200153000Cash Surplus(deficit)36500117300164300Based on the information above, the company should consider leasing the equipment instead of buying because unlike the first instance of buying the company’s cash flow is not affected by leasing the company does not get any cash flow problems under the leasing option.
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