Accounting - Relevant cash flows/NPO Terminal Value. See attached file for full problem description. ABC Company is considering replacing an existing hoist with one of the two newer more efficient pieces of equipment. The existing hosit is three years old, cost is $32,000 and is being depreciated under MACRS using a
An unlevered firm with a market value of $1 million has 50,000 shares outstanding. The firm restructures itself by issuing 200 new par bonds with face value of $1,000 and an 8% coupon. The firm uses the proceeds to repurchase outstanding stock. In considering the newly levered versus formerly unlevered firm, what is the break
Howard is deciding if he should pursue a restricted or relaxed current asset investment policy. His annual sales are $200,000; its fixed assets are $50,000; debt and equity are each 50 percent of total assets. EBIT is $18,000, the interest rate on the firm's debt is 05 percent, and his company's tax rate is 20 percent. With a re
I need to select (6) scenarios, (I HAVE 5 already) that would cause a shift in labor supply and demand. The following areas have had high job growth rates and can be used for a scenario: transportation, insurance, and real estate industries. Please focus on the following questions: 1) What is the area of employment? 2) Why
1. Do you think GM or Ford could have been more on top of market trends? How much is just foreign competition and how much is just bad management? Also, how much of it is government policy? Foreign producers do not pay health costs--over $1000 per US made vehicle--because foreign government fund health care, not the industry, fo
Company A, a merchandising firm, has budgeted sales for the third quarter of the year: July: 80,000 August: 90,000 September:70,000 Cost of goods sold equals 65% of sales. The company wants to maintain a monthly ending inventory equal to 130% of the cost of goods sold for the following month. The inventory on June 30th i
A farmer's payoff matrix per plot is: Good Rain Year Bad Rain Year Coffee 140 27 Corn 64 50 Probability 1/4 3/4 Assume that the farmer has no access to insurance a
Suppose that you are economic adviser to President Bush, "propose two actions that the administration should take if the budget is in surplus that will protect the surplus. Propose two actions if the budget is in deficit to bring it out of deficit. What would be the impact on the U.S. economy for each of your recommendations?"
A consumer buys good X and good Y(composite good). Price of X is 1 and Price of Y is 0.1. Total budget for X and Y is 2. Show graphically the effect of a buy one get one free promo for X. Include explanation.
Define positive statements and normative statements. Which are positive, which are normative? - a cut in wages tends to reduce the number of people willing to work - the government should reduce its spending on highways and increase spending on railroads - high interest rates tend to prohibit people from buying their first ho
1. You are the manager of a Fortune 500 hotel chain and must decide where to locate a new hotel. Based on tax considerations, your accounting department suggests that Atlantic City is the best choice, followed closely by Las Vegas. In particular, your current year tax savings from locating in Atlantic City are $4 million but o
Draw two budget constraints and show 2 opportunity costs Given: Income = 400/week Consumer buys widgets (2.50 each) and composite good (costs 1/unit) 1. Sketch budget constraint 2. What is opportunity cost(in widgets) of an additional unit of composite good Subsequently price of composite good rises to 1.50/unit,
In 1999, the Congressional Budget Office projected forecasts of the budget surplus to be somewhere between 2 and 3 percent of GDP in the next ten years. Now, the economy has entered a recession, and the government has pledged to flight a prolonged war on terrorism. How is the forecast likely to change?
For furniture business, or your work group, prepare a list of all possible costs. For each, indicate if it is fixed or variable. If it is variable, indicate if it can be controlled within three months time. Does this firm have full control of its selling price, partial control, or must it accept the price that already exists in
Is it realistic to separate costs into fixed and variable components? Can it be done realistically? Can computer analyses do an easier job?
1. If X is a normal good, then a fall in price must lead to a rise in consumption, but if X is an inferior good then a fall in price may lead to a rise in consumption. Answer TRUE or FALSE and justify your answer in terms of income and substitution effects. 2. Suppose that George's utility function is given by u(w) = 1000w -
Given the following information, complete the cash budget: a. Collections occur one month after the sale b. January's credit sales were $80,000 c. The firm has a certificate of deposit for $40,000 that matures in April e. The monthly mortgage payment is $25,000 f. Monthly depreciation
Current Balance Sheet Assets $100 Debt $10 Equity $90 Debt/Assets After-Tax Cost of Debt Cost of Equity Cost of Capital 0% 8% 12% ? 10% 8% 12% ? 20% 8% 12% ? 30% 8% 13% ? 40% 9% 14% ? 50% 10% 15% ? 60% 12% 16% ? What is the firm's weighted-average cost of capital at various combinations of debt and equ
Health Care Reform Project I chose flexible spending for prescription drugs. I have only found 1 website. Please help. Part I - Students will select a current health care economic issue such as managed care, health care spending, prescription drugs, impact of current legislation on health care, medical care for aging popul
11. The relevant range of activity refers to the a. geographical areas where the company plans to operate. b. activity level where all costs are curvilinear. c. levels of activity over which the company expects to operate. d. level of activity where all costs are constant. 12. The financial budgets include
(See attached file for full problem description) --- 1. Define the three classes of manufacturing costs. 2. Distinguish between product and period costs. 3. List the five components of cost-volume-profit analysis. 4. Budgeting can be an important management tool if implemented properly. Ident
I cannot find any help in the textbook for this problem. As I'm taking an online course, finding alternative forms of help proves difficult. Here's the problem: Bar T Ranches, Inc. is considering buying a new helicopter for $350,000. The company's old helicopter has a book value of $85,000, but will only bring $60,000 if it
Samano Industries & Pacer, Inc (See attached file for full problem description)
Marginal analysis: Let's suppose an airline is told by its accountants that the full cost of transporting one passenger from San Francisco to Boston is $300. Can the airline profit by offering a reduced fare of $200 to students who fly on a standby basis?
A life insurance company wishes to examine the relationship between the amount of life insurance held by a family and family income. From a random sample of 20 households, the company collected the data in the file insur.xls. The data are in thousands of dollars. (a) Estimate a linear relationship between life insurance (Y) a
The lemon juice would be produced in an unused building adjacent to Allied's Fort Myers plant; Allied owns the building, which is fully depreciated. The required equipment would cost $200,000, plus an additional $40,000 for shipping and installation. In addition, inventories would rise by $25,000, while accounts payable would go
I have a friend who owns a ski lodge and wants to add 5 new chairlifts at the cost of 2 million per lift. One new lift will allow 300 additional skiers, and there are only 40 days days of ticket sales, and each customer 55 dollars a day. Running the new lift will cost him 500 dollars a day for the 200 days his lodge is open.
4) The following is information from the national income account for a hypothetical country. GDP = $6,000 Gross Investment = 800 Net Investment = 200 Consumption = 4,000 Government purchases of goods and services = 1,100 Government budget surplus = 30 What is a) NDP? b) Net exports? c) Government taxes
5 questions: IRR,NPV, discount payback - file attached
What major problems can you foresee in applying capital budgeting techniques to not-for-profit organizational projects?