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Profitability Index (PI)

Profitability Index: Example Problems

Problems with Profitability Index The Romo Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II) 0 -40,000 -21,000 1 20,000 11,000 2 20,000 11,000 3 20,000 11,000 a. If the requ

Calculating Simple and Aggregate Price Index

Below is information on food items for the years 2000 and 2004. Use this table for problems 27 & 28. Show All Work 2000 2004 Item Price Quantity Price Quantity Margarine (pound) $0.81 18 $0.89 27 Shor

Upholstery shop

Tyler has worked in an upholstery shop for 10 years. Last year, Tyler's wages were $20,000. Lately, Tyler has been unhappy with the shop's owner. Convinced that he could run an upholstery shop that did better work at a lower cost, tyler decided to go into business for himself and opened an Upholstery shop. To ge the business

Price Index

1. The price of an item was $200 in 19X4 and $220 in 19X5. Calculate a simple price index for this item using 19X4 as the base year. 2. You are searching for a Government price index to use in estimating the price of an industrial chemical product. You have price data from 12 months ago. Would the Consumer Price Index (CPI)

Financial accounting

Comparative statement data for Douglas Company and Maulder Company, two competitors, appear below. All balance sheet data are as of December 31, 2009, and December 31, 2008. Douglas Company Maulder Company 2009 2008 2009 2008 Net sales $1,549,035 $339,038 Cost of goods sold 1,080,490 241,000 Operating expenses 302,275 7

Three measures of return on average total equity is most useful

China Petroleum & Chemical Corp (Sinopec) provides two sets of financial statements in its annual report. One set of financial statements is prepared in accordance with Chinese (PRC) accounting rules and regulations and another is prepared in accordance with IFRS. The company also provides a reconciliation of IFRS net income a

Profitability Evaluation

Profitability Evaluation evaluate your food and beverage operation's profitability. Address the following: o Importance of sales o Importance of cost of sales

Customer Profitability: Bow House Architectural, Ltd.

Bow House Architectural, Ltd. (BHA), produces commercial and residential architectural designs for national and regional construction firms. It submits designs in competitive bidding and considers the costs of unsuccessful designs as a cost of sales. Marketing efforts have focused on increasing sales of specific designs, but adm

Price & Value Weighted Index Calculations

Price-Weighted and Value-Weighted Index Problem Price per Share Shares Outstanding Beginning of YR Price End of YR Price ABC Stock 50,000 $75.00 $83.00 XYZ Stock 60,000 $50.00 $65.00 1) ABC and XYZ stock make up an index. What is the price-weighted ret

Consumer Confidence Index (analysis)

Can you help me get started on this assignment? Go to This is an index based on how people feel about the economy. All indexes are created in a similar fashion. A base is selected in this case, the base was 1985 and set at 100. So if the index is at 57.2 in

Profitability report family supermarkets

Please see attachment. Family Supermarkets (FS) operates at capacity and decides to apply ABC analysis to three product lines: baked goods, milk and fruit juice, and frozen foods. 1. Use the simple costing system to prepare a product-line profitability report for FS. 2. Use the ABC system to prepare a product-line profita

Allocation - customer profitability

Basic Exercise on Customer Profitability The table below gives sales, product cost, and cost-to-serve data for a company that makes three product lines: L, M, and N. The company has two customer types. Product L Product M Product N Sales $300 $600 $2,000 Cost of sales 150 200 1,400 Customer Type

Pepsico: 5 year trend analysis, evaluate profitability

Refer to 1) Make a 5 year trend analysis, using 2001 as the base year of (1) net sales, (2 ) net income. Comment on the significance of the trend results. 2) Compute for 2005 and 2004 the (1) profit margin (2) asset turnover (3) return on assets, and (4) return on common stockholders' equity. How would

Interpreting Financial Reports/Comparison of Profitability

Two of the largest chains of grocery stores in the U.S. are Albertson's, Inc. and A & P. In a recent fiscal year, Albertson's had a net income of $765 million, and A & P had a net income of $14 million. It is difficult to judge which company is more profitable from those figures alone because they do not take into account the re

Industry analysis: Example problem

Please see attached. Chapter 12 Problem 2: CFA Examination Level I: there has been considerable growth in recent years in the use of economics analysis in investments management. Further significant expansion may lie ahead as financial analysts develop greater skills in economic analysis and these analyses are integrated

Managerial Accounting: Cost allocation and apparent profitability

Problem 6-10. Cost allocation and apparent profitability. Diamonds, etc. manufactures jewelry settings and sells them to retail stores. In the past, most settings were made by hand, and the overhead allocation rate in the prior year was $10 per labor hour ($2,000,000 overhead /200,000 labor hours). In the correct year, overhead

Single Index Model: An Excel Implementation

What formulas in excel do I use for the attached assignment? I am requesting a very, detailed walk through for the attached homework. Perhaps an example completed in the attached and explaination for how the problem was solved. Please use the attachment and summary below to assist me. Thank you. I would very much appreciate your

Invest directly in index funds or use active manager for weighting by country

Suppose you have the choice of directly investing in an index fund that provides you with a general exposure to most countries, or a fund with an active manager who strongly over weights certain countries or regions. What are benefits or drawbacks of each? What qualities would you look for in determining the best fit for your po

SPRINT NEXTEL Financially Viable

Your specific assignment is to research, analyze, and prepare a report for the CFO on the actual financial performance of SPRINT NEXTEL for the years 2005, 2006, and 2007. In addition to reviewing the traditional financial performance indicators, you are also to review SPRINT NEXTEL's past and current stock performance for the s

1) What is the profit/loss from a cash and carry strategy? 2)If the mutual fund has a beta of 1.24 how many contracts will be needed to hedge the fund? 3) If the continuously compounded interest rate is 5.0% what will the futures price need to be for a margin call to occur 10 days from now? 4) If there are no settlement requirements, what is your percentage gain or loss under a 15.0% margin requirement?

1) The annualized dividend yield on the s&p 500 is 1.40%. The continuously compounded interest rate is 6.4%. if the 9-month forward price is $925.28 and the index is priced at 950.46$, what is the profit/loss from a cash and carry strategy? a. 61.50 gain b. 25.18 loss c. 25.18 gain d. 61.50 loss 2) The manager of a bl

Case Study: Dr. Andres, a local pediatrician

Case Studies C9-59 On the advice of his attorney, Dr. Andres, a local pediatrician, contributed several office buildings, which he had previously owned as sole proprietor, to a new Andres Partnership in which he became a one-third general partner. He gave the remaining limited partnership interests to his two sons, Miguel and

Consumer Price Index - Super Bowl Ad

Hi, I was wondering if I can get some assistance how to go about working this assignment. I am really having trouble in this course and some assistance is greatly needed. Ch. 18, exercise 56 p. 647-648 (Lind, D. A., Marchal, W. G., & Wathen, S. A., 2005). The Super Bowl is usually the TV program with the largest viewing a

Company Profitability and Cash Flows

A corporation's income statement shows a net income of $10,000 for the year, after income taxes. The statement of cash flows shows that its cash balance increased by $150,000: - Net cash outflow from operating activities = $100,000 - Net cash inflow from financing activities = $50,000 - Net cash inflow from investing activi

Financial decision making.

Fijisawa, Inc., is considering a major expansion of its product line and has estimated the following free cash flows associated with such an expansion. The initial outlay associated with the expansion would be $1,950,000, and the project would generate free cash flows of $450,000 per year for six years. The appropriate required

Transfer Pricing and Breakeven Profitability

Can someone please help me solve the problems in the attached file? International Consulting Services Group (ICS) consists of the following four independent groups (a) Management Consulting (b) Risk Assessment Consulting (c) Securities Trading and (d) insurance and Liability Underwriting. The company's consulting revenues

Jan Spears Ltd. Manufactures four different products.

2. (Scarce resources) Jan Spears Ltd. Manufactures four different products. Because the quality of the products are high, the demand for the product exceeds the units Jan Spears Ltd. Can produce. Based on the enquiries made by current and potential customers, you have estimated the following for the coming year: Estimate

Analysis of liquidity and profitability

See attached file for a summary of data (amounts in thousands) of comparative financial statements for Gateway, Inc., a direct marketer and distributor of personal compters (PCs) and PC-related products: At December 31, 1997, total assets were $2,039,271 and total stockholders' equity was $930,044. (a) Calculate Gateway's

Quantitative Reasoning for Business

1. (2 points) What is a "price index"? How is it constructed? What is its purpose? Give the "nominal cost" and "price index" compute the "real cost" for each year. Interpret the "real cost" trend. What is happening? Year Nominal cost Price Index Real cost 1990 211 100 1991 231 115 1992 221 125 1993

Profitability, Liquidity and Solvency ratios

Describe each type of ratio category: liquidity, solvency, and profitability. Also, choose one ratio from each category and provide an example and describe what each is useful for.