A company is considering investing $10,000 in a heat exchanger. The heat exchanger will last 5 years, at which time it will be sold for $2,000. The maintenance cost at the end of first year is estimated to be $1,000. Maintenance costs for the exchanger are estimated to increase by $500 per year over its life. As an alternative, the company may lease the equipment for $X per year, including maintenance. a. Draw a cash flow diagram of both alternatives b. For what value of X should the company lease the heat exchanger? The company expects to earn 8% on its investments. Assume end-of-year lease payments.

Frost corporation incurred the following transactions during its first year of operations. (assume all transactions involve cash.) 1) acquired $1,900 of capital from the owners. 2) purchased $435 of direct raw materials. 3) used $290 of these direct raw materials in the production process. 4) paid production workers $490 cash. 5) paid $290 for manufacturing overhead (applied and actual overhead are the same). 6) started and completed 250 units of inventory. 7) sold 140 units at a price of $6 each. 8) paid $130 for selling and administrative expenses. the amount of raw material inventory on the balance sheet at the end of the accounting period would be: