day of each month for that month's work. Other costs are paid in the quarter unless otherwise noted.

Variable overhead is estimated at $$2$ per direct labor hour. Fixed overhead costs are $$29000$ per year.

Fixed overhead includes depreciation of $$8000$ per year.

Variable selling and administrative costs are $$1\mathrm{.}85$ per unit. Fixed selling and admin costs are $$37000$ per year.

$($This includes $$3600$ of depreciation per year.$)$

ABC makes quarterly income tax payments of $$500$ each. The corporate income tax rate is $21\%$ of net

income before taxes $($consider any overpayments on your balance sheet$).$

ABC pays quarterly dividends of $$1400.$

ABC will purchase additional equipment on the following schedule $($depreciation is already included above$)$:

Quarter $1$

Quarter $2$

Quarter $3$

Quarter $4$

ABC has to maintain a minimum cash balance of $$4,000.$ Any projected borrowings are assumed to be borrowed

at the beginning of the quarter. Payments are made at the end of the following quarters to the extent cash is available.

All borrowings and repayments are made in $$1,000$ increments. Interest is paid at the time of repayment.

Interest is calculated at $10\%$ per year $($no compounding$).$