# Sotzie Toy Company is selling Patton and Eisenhower dolls. What is the sales/expense projection? What is the capital budget? Calculate the cash flow for 10 years. And more...

Sotzie Toy Company is selling Patton and Eisenhower dolls. Each doll sells for $10. Patton dolls would sell 50,000 and Eisenhower 35,000 the first year. Patton dolls would see an annual increase of 5% with the Eisenhower dolls 7%. The VCR (Variable Cost Rate) for Patton is 50% and Eisenhower 40%. A straight-line method is used in calculating depreciation with money back in 4 years. The WACC is 10% with a 40% tax rate. The equipment cost is $120,000 lasting 10 years then selling as scrap for $20,000.

1. What is the sales/expense projection?

2. What is the capital budgeting?

3. How to calculate the cash flow for 10 years.

4. Explain the following:

a) the independent and mutually exclusive projects?

b) the payback period?

c) the NPV for each?

d) the IRR for each?

https://brainmass.com/business/capital-budgeting/sotzie-toy-company-budgeting-problem-62179

#### Solution Summary

This solution provides assistance with Sotzie Toy Company's budgeting problem.