The expected value of leasing public warehouse space as required by demand is calculated by multiplying the cost per square foot by the anticipated demand.
To determine the expected value of leasing public warehouse space, we consider the cost per square foot and the anticipated demand. The cost of leasing public warehouse space is given as $20.50 per square foot, and we assume the anticipated demand is represented by "x" square feet.
Therefore, the total cost of leasing public warehouse space as required by demand would be 20.50 * x dollars. This calculation accounts for the yearly cost of leasing public warehouse space to accommodate the projected increase in demand.
By multiplying the cost per square foot by the anticipated demand, we can determine the financial implication of leasing public warehouse space to meet the expected growth in demand for Acadia Logistics' final-mile services.
Hence, the expected value of leasing public warehouse space as required by demand is 20.50x dollars, representing the estimated cost for accommodating the projected increase in demand for distribution center space.
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The City of South Pittsburgh maintains its books so as to prepare fund accounting statements and records worksheet adjustments in order to prepare government-wide statements.
1. Deferred inflows of resources-property taxes of $63,500 at the end of the previous fiscal year were recognized as property tax revenue in the current year's Statement of Revenues, Expenditures, and Changes in Fund Balance.
2. The City levied property taxes for the current fiscal year in the amount of $12,736,900. When making the entries, it was estimated that 2 percent of the taxes would not be collected. At year-end, $267,200 is thought to be uncollectible, $360,000 would likely be collected during the 60-day period after the end of the fiscal year, and $52,300 would be collected after that time. The City had recognized the maximum of property taxes allowable under modified accrual accounting.
3. In addition to the expenditures recognized under modified accrual accounting, the City computed that $30,100 should be accrued for compensated absences and charged to public safety.
4. The City's actuary estimated that pension expense under the City's public safety employees pension plan is $240,000 for the current year. The City, however, only provided $216,900 to the pension plan during the current year.
5. In the Statement of Revenues, Expenditures, and Changes in Fund Balances, General Fund transfers out included $524,000 to a debt service fund, $213,000 to a special revenue fund, and $958,500 to an enterprise fund.
Prepare the journal entries for the worksheet adjustments for each of the above situations. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
1. Dr. Property Tax Receivable - Deferred Inflow of Resources: Property Tax Revenue $63,500 Cr. $63,500 in property taxes 2. Uncollectible Property Taxes: $267,200 Cr. $267,200 as a provision for uncollectible property taxes
Dr. Uncollectible Property Taxes $52,300 Cr. Property Tax Revenue $52,300 Dr. Allowance for Uncollectible Property Taxes $360,000 Cr. Property Tax Revenue $360,000 3. Accrued Compensated Absences: Dr. Compensated Absences Expense $30,100 Cr. Compensated Absences Payable $30,100 4. Pension Expense and Contribution: Dr. Pension Expense $240,000 Cr. $240,000 in Pension Payable Dr. Pension Payable $23,100 Cr. Expenditures $23,100 5. Transfers Out: Dr. Transfers Out - Debt Service Fund $524,000 Cr. Expenditures $524,000 Dr. Transfers Out - Special Revenue Fund $213,000 Cr. Expenditures $213,000 Dr. Transfers Out - Enterprise Fund Expenditures $958,500
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In a market for x draw an decrease in the demand for x, ceteris paribus, then predict what happens to the price of x and quantity of x.
Will the price and quantity increase, decrease or have no change?
When there is a decrease in demand for X, ceteris paribus, then there is a shift in the demand curve towards the left. This shift results in lower prices for X and a reduction in the quantity of X demanded. When there is less demand for a good, suppliers lower the price of the good, in an attempt to attract buyers.
This causes the equilibrium price to fall. Additionally, a decrease in demand results in lower profits for producers, which can cause them to produce fewer goods. The quantity of X demanded is expected to decrease. An example can help in understanding this concept better. Let's say that a company produces 5000 units of X at a price of $30 per unit. However, due to a decrease in demand, the company can only sell 4000 units of X at a price of $25 per unit. Thus, a decrease in demand for X results in a decrease in price and quantity of X.
The price and quantity will decrease. The decrease in demand can be caused by a number of factors including a decrease in consumer income, a shift in consumer preferences, a change in the price of a substitute or complement good, and changes in government policies.
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Concepts: Apply Marketing Metrics The chapter discusses the growing importance of sustainability, and it notes that companies and consumers increasingly consider other costs in addition to financial kinds when they decide what to sell or buy. One of these cost categories is damage to the environment. How can marketers make it easier for shoppers to compute these costs? The answer is more apparent in some product categories than in others. For example, American consumers often are able to compare the power consumption and annual costs of appliances by looking at their EnergyStar rm rating. In other situations, we can assess the carbon footprint implications of a product or service; this tells us how much CO 2
our purchase will emit into the atmosphere (e.g. if a person flies from New York to London). The average American is responsible for over 16 metric tons of CO 2
per year! 43
A carbon footprint comes from the sum of two parts, the direct, or primary, footprint and the indirect, or secondary, footprint: - The primary footprint is a measure of our direct emissions of CO 2
from the burning of fossil fuels, induding domestic energy consumption and transportation (e.g. cars and planes). - The secondary footprint is a measure of the indirect CO 2
emissions from the whole life cycle of products we use, from their manufacture to their eventual breakdown. 44 Although many of us are more aware today that our consumption choices carry unseen costs, there is still a lot of confusion about the best way to communicate the environmental costs of our actions, and in many cases, consumers aren't motivated to take these issues into account unless the costs impact them directly and in the short term. 1-18. As a consumer, what other metrics would you suggest that might reflect benefits of sustainability initiatives that would motivate you to purchase from one provider or the other? 1-19. Would you buy from a demonstrably more expensive provider just because they exhibited a higher level of commitment to sustainability?
Marketing metrics can be used to provide information on the environmental impact of a product or service in addition to financial costs. One approach is to provide information about the carbon footprint of the product or service. A carbon footprint can be broken down into a direct footprint and an indirect footprint.
The direct footprint represents the emissions of CO2 from the burning of fossil fuels due to energy consumption and transportation. The indirect footprint reflects the CO2 emissions resulting from the entire life cycle of a product, from manufacturing to disposal. Consumers can be motivated to consider environmental costs by presenting them with information on the carbon footprint of products.
To motivate consumers to purchase products from providers committed to sustainability, marketers can provide additional metrics that reflect the benefits of sustainability initiatives. For example, consumers can be provided with information on the extent to which providers conserve energy, use renewable resources, or reduce waste. By providing information on these metrics, consumers can make informed decisions and are more likely to be motivated to purchase products from providers committed to sustainability.
If a product is demonstrably more expensive but is associated with a higher level of commitment to sustainability, some consumers may be motivated to purchase it. However, it is unlikely that all consumers would be willing to pay more for a product that is associated with a higher level of commitment to sustainability.
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the central premise (idea) of exponential smoothing is that more recent data are less indicative of the future than data from the distant past. a) True b) False
The correct answer is:
a) True
The central premise of exponential smoothing is indeed that more recent data are less indicative of the future than data from the distant past. Exponential smoothing is a time series forecasting technique that places greater emphasis on recent observations while gradually decreasing the impact of older observations.
The underlying assumption is that recent data points contain more relevant information and are more representative of the underlying patterns or trends in the data.
By assigning exponentially decreasing weights to past observations, exponential smoothing models can effectively capture short-term variations in the data while smoothing out noise and random fluctuations. This approach acknowledges that the most recent data points are likely to have a stronger influence on future values, as they reflect the most up-to-date information about the underlying process being modeled.
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A local tire wholesale distributor sells on average $6,500 of inventory daily to retail tire shops. The distributor generally carries about $250,000 in inventory. How many days-of-supply does the distributor have? How many times a year does the distributor turn over their inventory?
The parent company to the tire distributor above owns a national chain of distributors on the west coast of the United States. Last year, they posted the following numbers in their financial filings.
Inventory = $182 Million (cost to acquire)
Revenue = $9,543 Million
COGS = $5,389 Million
Calculate days-of-supply and annual inventory turns for the parent company.
To calculate the days-of-supply and annual inventory turnover for the parent company, we need to use the following formulas:Days-of-Supply = (Average Inventory / Average Daily Sales)
Inventory Turnover = (COGS / Average Inventory)For the local tire wholesale distributor:Average Daily Sales = $6,500Average Inventory = $250,000Days-of-Supply = ($250,000 / $6,500) ≈ 38.46 days
Inventory Turnover = ($5,389 Million / $182 Million) ≈ 29.61 times
For the parent company:COGS = $5,389 MillionAverage Inventory = $182 MillionDays-of-Supply = ($182 Million / ($9,543 Million / 365 days)) ≈ 7.01 daysInventory Turnover = ($5,389 Million / $182 Million) ≈ 29.61 times
Therefore, the parent company has approximately 7.01 days-of-supply and an annual inventory turnover of around 29.61 times.
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Olsen Outfitters Inc. believes that its optimal capital structure consists of 70% common equity and 30% debt, and its tax rate is 25%. Olsen must raise additional capital to fund its upcoming expansion. The firm will have $4 million of retained earnings with cost of r s
=10%. New common stock in an amount up to $9 million would have a cost of r e
=11.5%. Furthermore, Olsen can raise up to $4 million of debt at an interest rate of r d
=9% and an additional $6 million of debt at r d
=10%. The CF estimates that a proposed expansion would require an investment of $8.0 million. What is the WACC for the last dollar raised to complete the expansion? Round your answer to two decimal places.
The WACC for the last dollar raised to complete the expansion is 9.99%.
Olsen Outfitters Inc. is currently seeking to optimize its capital structure in order to raise additional capital for an upcoming expansion. Before proceeding, the company needs to calculate the cost of each component of capital. The relevant costs are as follows:
Cost of Common Equity (r_e) = 11.5%
Cost of Debt (r_d) = 9% and 10%
Tax Rate (Tc) = 25%
Retained Earnings (r_s) = 10%
To determine the proportions of each component in the capital structure, Olsen Outfitters has established that equity accounts for 70% and debt for 30% of the capital structure. Therefore:
Weight of equity (we) = 0.7
Weight of debt (wd) = 0.3
Starting with the calculation of the cost of equity, we have:
Cost of Equity (r_e) = 11.5%
Next, we need to calculate the cost of debt considering the two different debt instruments:
Cost of Debt (r_d) = 9% × ($4 million/$8 million) + 10% × ($6 million/$8 million) = 9.5%
Now, we can proceed to calculate the Weighted Average Cost of Capital (WACC) using the formula:
WACC = wd × rd × (1 - Tc) + we × re + wps × rps
WACC = 0.3 × 9.5% × (1 - 0.25) + 0.7 × 11.5%
WACC = 9.99%
Therefore, the WACC for the last dollar raised to complete the expansion is 9.99%.
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Describe the marketing channel the Uber Eats has chosen? Analyze
the factors that led to this choice and strategy selection?
Uber Eats has chosen a digital platform-based marketing channel for its food delivery service. Factors such as technological advancements, wide reach, cost efficiency, scalability, customer experience, and synergy with the Uber brand have influenced this choice and strategy selection.
Uber Eats has chosen a digital platform-based marketing channel for its food delivery service. This channel involves connecting customers, restaurants, and delivery drivers through a mobile application and online platform. The factors that led to this choice and strategy selection include:
Technological Advancements: Uber Eats leverages advancements in mobile technology and internet connectivity to create a seamless and convenient food ordering and delivery experience. This channel allows customers to easily browse menus, place orders, and track deliveries in real-time.
Wide Reach and Accessibility: By operating through a digital platform, Uber Eats can reach a large customer base across different geographic locations. It eliminates the need for physical infrastructure like restaurants or brick-and-mortar stores, enabling the service to be accessible to customers wherever they are.
Cost Efficiency: The digital platform-based model reduces the need for extensive investments in physical assets, such as restaurant spaces or delivery vehicles. This allows Uber Eats to operate with lower fixed costs compared to traditional food delivery channels.
Scalability: The platform-based approach offers the potential for rapid scalability and expansion into new markets. Uber Eats can quickly onboard new restaurants and delivery partners onto its platform, catering to increasing customer demand and expanding its service coverage.
Enhanced Customer Experience: The digital channel provides customers with a user-friendly interface, personalized recommendations, and convenient features like cashless payments and order tracking. This focus on customer experience helps differentiate Uber Eats from traditional food delivery options.
Synergy with Existing Uber Brand: Uber Eats leverages the existing brand recognition and user base of its parent company, Uber. This allows for cross-promotion and integration of services, strengthening the overall value proposition for both Uber and Uber Eats customers.
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A project consists of an annual investment 47,000.00 for four years, with no residual values. The annual revenue forecast is R$ 110,000.00 in the 6 years following the conclusion of the investments, then R$ 120,000.00 per year for 6 years and, finally, R$ 160,000.00 per year in 6 years. The forecast annual costs (including taxes) is R$70,000.00 in the 6 years following the completion of the investments, then R$80,000.00 per year for 6 years and, finally, R$100,000.00 per year in 6 years . Assume that the minimum attractiveness rate is 12% p.a. and calculate the capital efficiency ratio (NPV / PVI) for that project..
The capital efficiency ratio (NPV/PVI) for the given project is 24.4%.
In order to calculate the capital efficiency ratio (NPV / PVI) for the project, we need to follow the given steps:
Calculation of present value of all the cash flows associated with the project:
Year0Outflow (47,000)Year1-4
Outflow (47,000)Year5-10
Inflow (110,000)Year11-16Inflow (120,000)Year17-22Inflow (160,000)Year5-10
Outflow (70,000)Year11-16
Outflow (80,000)Year17-22
Outflow (100,000)
The present value of all cash flows can be calculated as:
NPV = -47,000 - 47,000 - 47,000 - 47,000 + 110,000/(1.12)^5 + 110,000/(1.12)^6 + 110,000/(1.12)^7 + 110,000/(1.12)^8 + 110,000/(1.12)^9 + 110,000/(1.12)^10 + 120,000/(1.12)^11 + 120,000/(1.12)^12 + 120,000/(1.12)^13 + 120,000/(1.12)^14 + 120,000/(1.12)^15 + 120,000/(1.12)^16 + 160,000/(1.12)^17 + 160,000/(1.12)^18 + 160,000/(1.12)^19 + 160,000/(1.12)^20 + 160,000/(1.12)^21 + 160,000/(1.12)^22 - 70,000/(1.12)^5 - 70,000/(1.12)^6 - 70,000/(1.12)^7 - 70,000/(1.12)^8 - 70,000/(1.12)^9 - 70,000/(1.12)^10 - 80,000/(1.12)^11 - 80,000/(1.12)^12 - 80,000/(1.12)^13 - 80,000/(1.12)^14 - 80,000/(1.12)^15 - 80,000/(1.12)^16 - 100,000/(1.12)^17 - 100,000/(1.12)^18 - 100,000/(1.12)^19 - 100,000/(1.12)^20 - 100,000/(1.12)^21 - 100,000/(1.12)^22NPV = R$45,876.74
Calculation of the present value of investments (PVI):
PVI = R$47,000 + R$47,000 + R$47,000 + R$47,000PVI = R$188,000
Capital efficiency ratio (NPV/PVI):
Capital efficiency ratio = NPV/PVI
Capital efficiency ratio = R$45,876.74/R$188,000
Capital efficiency ratio = 0.244 or 24.4%
Therefore, the capital efficiency ratio (NPV/PVI) for the given project is 24.4%.
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Investigate a logistics and supply chain problem that could be
optimised in the world, in your own workplace or somewhere where
you have a key interest.
A logistics and supply chain problem that could be optimized is the problem of limited visibility in supply chain management.
Currently, the world is experiencing an increasing need for transparency and visibility in supply chain management. Customers want to know how their products were manufactured, the source of the raw materials, and how it was transported. Due to the growing complexity of global supply chains, it's not always possible to have complete visibility over the entire process. Therefore, a logistics and supply chain problem that could be optimized is the problem of limited visibility in supply chain management.
Without complete visibility, it becomes challenging to track the products throughout the entire supply chain. It can also lead to issues such as counterfeit goods, environmental and social non-compliance, and labor violations. To optimize this problem, companies can incorporate new technologies such as blockchain and the Internet of Things (IoT) to increase supply chain visibility. For example, blockchain can help to track products and raw materials from the source, while IoT can help to track the products in transit. These technologies can help companies to achieve complete visibility over their supply chain, thereby increasing transparency and reducing the risk of non-compliance and counterfeiting.
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The stock of an important food retail company has a beta of 1.2. The expected return on the market portfolio is 12% and the risk-free rate 6%. What is the expected or required rate of return on that stock?
The expected or required rate of return on the stock is 13.2%.
The required rate of return, r, is calculated by the Capital Asset Pricing Model (CAPM), which is:
r = Rf + beta(Rm – Rf)
where Rf is the risk-free rate, beta is the beta coefficient of the stock, Rm is the expected return on the market portfolio, and (Rm – Rf) is the market risk premium.
In the given case, the risk-free rate, Rf = 6%.
The expected return on the market portfolio, Rm = 12%.
The beta coefficient of the stock, beta = 1.2.
Now, we can use the CAPM equation to calculate the required rate of return:
r = Rf + beta(Rm – Rf)r = 6% + 1.2(12% – 6%)r = 6% + 1.2(6%)r = 6% + 7.2%r = 13.2%
Hence, the expected or required rate of return on the stock is 13.2%.
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Using the value maximization approach, financial managers maximize the value of the firm when they accept investment projects that have: Select one: a. cost of capital > ROIC b. ROIC= cost of capital c. ROIC> cost of capital d. cost of capital ≤ ROIC
Using the value maximization approach, financial managers maximize the value of the firm when they accept investment projects that have the ROIC> cost of capital. The correct option is c.
The value maximization approach is the process of maximizing the value of a firm through investments that have the potential to generate the highest returns. When managers use the value maximization approach, they consider the cost of capital in addition to the expected returns on an investment.
The formula for calculating ROIC (Return on Invested Capital)
ROIC is a financial metric that determines the return earned by a business on its invested capital. ROIC is computed by dividing operating income by invested capital.
The following is the formula for calculating ROIC:
ROIC = Operating Income / Invested Capital
Invested capital is equal to the sum of the firm's debt and equity. When a firm's ROIC is greater than its cost of capital, it creates value for its shareholders. A company is likely to generate more value by investing in projects with an ROIC that is greater than its cost of capital.The correct option is c. ROIC> cost of capital.
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Identify" and "define" two leadership attributes and
two leadership behaviors? Select "one" of
the two leadership attributes and "one" of the two leadership
behaviors you listed and assess yourself in
Leadership attributes and behaviors are key factors that distinguish successful leaders from unsuccessful ones. They are the qualities and actions that define an individual's leadership style.
Two leadership attributes and two leadership behaviors are as follows:
Leadership Attributes:
1. Confidence: A leader should be confident in their abilities and have faith in their judgment. They must possess self-assurance and a clear sense of direction.
2. Accountability: A successful leader is accountable for their actions. They must be responsible and ready to take ownership of their decisions.
Leadership Behaviors:
1. Communication: A good leader must be able to communicate their vision and goals effectively. They must be able to listen actively and provide feedback when required.
2. Collaboration: A leader must promote a collaborative culture. They must establish a culture of mutual respect and cooperation among team members.
When it comes to assessing yourself, one can use a self-assessment tool to identify their leadership strengths and areas for improvement. This will help you to identify what your leadership strengths and weaknesses are. If you have selected "confidence" as a leadership attribute and "communication" as a leadership behavior, you can assess yourself on the following basis:
Confidence:How often do you feel confident in your leadership abilities?Do you take risks when necessary?Do you lead by example?
Communication:How effectively do you communicate with your team members?Do you encourage feedback from your team members?How often do you practice active listening?
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6. Which of the following is an example of the "brain drain"? a. A country's most highly educated workers emigrate to rich countries. b. A country has such a poor educational system that human capital falls over time. c. The population of a country grows so fast that the educational system can't keep up. d. A country steals patented technology from another country. 7. In the first segment from the video, "Commanding Heights," the famed Latin American economist Hernando de Soto tells the story of a coffee bean farmer from Tanzania, who when asked whether he can produce proof that he owns the land, asserted that he had no official deed but that he had purchased the land from someone years ago and the fact that he lives there today is proof enough that he owns it. In your own words, explain what De Soto's main argument is about property rights and how it relates to a country's standard of living?
6. The following option is an example of the brain drain:a. A country's most highly educated workers emigrate to rich countries.
The brain drain refers to the emigration of skilled individuals, such as doctors, engineers, and other professionals from their home country to a more developed country.
It causes the home country to lose talented and experienced workers who would otherwise contribute to its growth.7. Hernando de Soto's main argument is that a country's standard of living and economy can improve by protecting the property rights of its citizens.
He used the coffee bean farmer's story to illustrate the idea that people in many poor countries may own their land, but they lack formal titles that would protect their rights as property owners. They cannot use their property as collateral for a loan, which would allow them to invest in their business, buy equipment, and hire employees.
De Soto argues that when people have legal ownership of their property, they can use it as an asset to create wealth and improve their lives.
Property rights also help to establish trust and accountability in business transactions, which increases investment, growth, and productivity. He claims that developing countries could create trillions of dollars in wealth if they reformed their legal systems and allowed their citizens to have formal titles to their property.
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Which of the following statements would not accurately describe situations related to tax implications of active business income?
Multiple Choice
Active business income would include the selling of professional services.
The payment of salary to a shareholder to reduce income over $500,000 to mitigate the potential of double taxation.
Active business income would not be eligible for refundable tax treatment.
The unused portion of the small business deduction would be available for carry-over to other years.
The following statement does not adequately represent circumstances involving the tax consequences of active business income:
"Paying a shareholder salary to reduce income over $500,000 to reduce the possibility of double taxation."This claim is untrue since paying a shareholder a salary only to lower income exceeding $500,000 is not an effective method of tax planning. Payments should be made in accordance with the services provided and fair market value, as specified by the Income Tax Act's special regulations on the reasonableness of salaries paid to shareholders. It is not permitted to intentionally reduce income through salary payments in order to avoid paying higher tax rates or double taxes.
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First Choice Company is seeking buy another firm (MFG) as part of its strategic expansion growth. You have been hired as the consultant to value the firm. The current inflation rate in the economy is 3 %. MFG anticipates a growth of 4 % in revenue in the coming years. The shareholders of the target company anticipate return on equity between 6 and 8 %. Banks that lend to companies in the industry quote interest on long term loans at 5 % per annum in the long run. As a small company, MFG finances 70 % of its operations with equity. Based on research MFG conducted last year, working capital is expected to grow at 1 % of revenue while capital assets grow at 2 % per annum. The expected depreciation and amortization rate is 5 % per annum. Current Income tax rate is expected to increase by 2 % with no additional increase in deferred tax rate. The research also showed that the average annual short-term loan would be 15,000 with an interest of 10 %. MFG’s fixed cost is expected to grow at 1% in the coming years. The income statement and balance sheet for the past two years are presented below: MFG Company Income statement for the period ending December 31, 2020 2020 2019 Revenue 250,000 200,000 Production expenses 110,000 100,000 Contribution margin 140,000 100,000 Other expenses: Amortization 35,000 37,500 Page 3 of 3 Property taxes 3,000 2,800 Interest on long term loan 9,800 10,000 Selling and administrative 15,000 14,000 Interest and bank charges 1,000 1,000 63,800 65,300 Earnings before taxes: 76,200 34,700 Income tax: Current Deferred 11,430 7,620 5,205 3,470 Net Earnings 57,150 26,025 Balance Sheet as at of December 31, 2020 2020 2019 Current assets: Cash 5,000 3,500 Accounts receivables 20,000 30,000 Inventories 150,000 120,000 175,000 153,500 Fixed Assets: Land 300,000 300,000 Building and Equipment 700,000 750,000 1,000,000 1,050,000 Total Assets 1,175,000 1,203,500 Accounts payable 20,000 19,000 Income tax payable 10,000 9,800 Current portion of long-term debt 50,000 51,000 Long-term debt 200,000 220,000 Total Liabilities 280,000 299,800 Equity 895,000 903,700
Note: Building and equipment are stated net of depreciation and amortization Instructions
Question: Estimate the value of the MFG using the discounted cash flow approach. Due to time constraint, use only 5 years for the estimation. Assume the contribution margin ratio for the current year for the valuation
Given, Current year Contribution margin ratio = (Contribution margin / Revenue) × 100= (140,000 / 250,000) × 100= 56%We have to calculate the value of MFG using the discounted cash flow approach. The discounted cash flow is the technique to calculate the present value of future cash flows.
We have to calculate the free cash flows, terminal value, and discounted cash flows of the MFG company. Free cash flow is the cash left after the company pays all of its expenses and capital expenditures for the period. Free Cash Flows (FCF) = EBIT (1 - Tax rate) + Depreciation and Amortization - Change in net working capital - Capital expenditure FCF of 2021
= $ (76,200 x (1 - 0.18)) + $35,000 - $3,250 - $40,000= $45,886.00
Terminal value can be calculated as follows:
Terminal Value (TV) = FCF (1+ g) ÷ (r - g)
Where,g = Growth rate in perpetuity = 4% (given)
r = Discount rate = 5% (given)Year 1FCF = $ 45,886.00
Year 2FCF = $ 48,090.30
Year 3FCF = $ 50,371.91
Year 4FCF = $ 52,735.50
Year 5FCF = $ 55,185.97
TV = $ 1,524,950.50
Present value of terminal value can be calculated as follows:
PV of Terminal Value (TV) = TV / (1 + r)^5= $ 1,137,301.30
Present value of the cash flows can be calculated as follows:
PV of Year 1 FCF = $ 43,701.90
PV of Year 2 FCF = $ 42,678.96
PV of Year 3 FCF = $ 41,690.09
PV of Year 4 FCF = $ 40,734.98
PV of Year 5 FCF = $ 39,812.45
Total Present Value of Cash Flows = $ 208,618.38
Enterprise value = Present value of cash flows + PV of terminal value
= $ 208,618.38 + $ 1,137,301.30= $ 1,345,919.68
Value of MFG using the discounted cash flow approach is $ 1,345,919.68.
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Determine the values of i (the interest rate per period), n (the number of interest periods), P (the present value), and F (the future value) for the following situation. An amount of $4870.59 is deposited on January 1, 2011. The balance on July 1, 2018 is $6000 and the interest is 2.8% compounded semiannually. i=0.014 (Type an integer or a decimal.) n = (Type an integer or a decimal.)
The values are:i = 0.014 (or 1.4% per period) n = 14.947 (approximately) , P = $4870.59, F = $6000. To determine the values of i, n, P, and F, we can use the formula for compound interest: F = P * (1 + i)^n
Where: F = Future value, P = Present value.i = Interest rate per period. n = Number of interest periods Given:P = $4870.59, F = $6000, i = 0.014 (2.8% expressed as a decimal). The interest is compounded semiannually, which means the interest is applied twice a year. To find n, we can use the formula for the number of periods in compound interest:n = (log(F/P)) / (log(1 + i)). Using the given values, we can calculate n: n = (log(6000/4870.59)) / (log(1 + 0.014)), n ≈ 14.947 (rounded to three decimal places)
Therefore, the values are:i = 0.014 (or 1.4% per period) n = 14.947 (approximately) , P = $4870.59, F = $6000
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The financial statements for Castile Products, Incorporated, are given below: Account balances at the beginning of the year were: accounts receivable, \( \$ 25,000 \); and inventory, \( \$ 60,000 \).
The balance sheet presents the company's assets, liabilities, and equity as of a certain date.
The total assets of the company are $300,000 as of December 31, 2021
Castile Products, Incorporated Financial Statement Year Ending December 31, 2021 ($ in thousands) Cash $20 Accounts Receivable 30 Inventory 65 Prepaid Expenses 5 Buildings and Equipment 240 Less:
Accumulated Depreciation 60 Net Buildings and Equipment 180 Total Assets $300 Accounts Payable $30 Accrued Liabilities 10 Mortgage Payable 100 Common Stock 140 Retained Earnings 20 Total Liabilities and Equity $300
Given the account balances at the beginning of the year (accounts receivable of $25,000 and inventory of $60,000), the company recorded a total asset value of $300,000 as of December 31, 2021.
The balance sheet shows the company's assets, liabilities, and equity as of a particular date.
The given financial statement shows that at the beginning of the year, Castile Products, Incorporated has account receivable of $25,000 and an inventory of $60,000.
These account balances help to calculate the total assets of the company. The total assets of the company are $300,000 as of December 31, 2021.
The balance sheet presents the company's assets, liabilities, and equity as of a certain date.
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You are consultant studying the capital restructuring of Lambton Bros. The firm's current WACC is 12.5% and marginal corporate tax rate is 34.0%. The firm's market value is currently distributed 75.0% equity and 25.0% debt. The debt mainly consists of an outstanding bond that trades at a yield to maturity of 9.2% and is expected to remain constant. The risk-free rate is 3% and the expected return on the market portfolio is 9.5%. Lambton Bros is strategically positioning itself for an acquisition of a rival firm and has the capacity to increase its debt 70.0% if needed. Answer the following questions (all parts are equally valued): 1. What is the current equity cost of capital? % (Give answer as \% to 4 decimal places) 2. What is the beta risk of Lambton Bros? (Give answer to 4 decimal places) 3. What is the unlevered beta risk of Lambton Bros? (Give answer to 4 decimal places) 4. If the firm increases its debt to 70.0%, what is the new beta risk of the firm? (Give answer to 4 decimal places) 5. What would be the new equity cost of capital? \% (Give answer as percentage to 4 decimal places) 6. What would be the new WACC of the firm? \% (Give answer as percentage to 4 decimal places)
1. Current equity cost of capital= 12.5%2. Beta risk of Lambton Bros= 0.66943. Unlevered beta risk of Lambton Bros= 0.50854. New beta risk of the firm= 0.9644.
New equity cost of capital= 16.05915. New WACC of the firm= 11.50261.1. Calculation of current equity cost of capital:Given,[tex]WACC = 12.5%Market value of equity = 75%Market value of debt = 25%Tax rate = 34%Cost of equity = WACC - [(Market value of debt / Market value of equity + Market value of debt) * (WACC - Cost of debt) * (1 - Tax rate)]Cost of debt = 9.2%Current equity cost of capital = 12.5% - [(0.25 / 0.75 + 0.25) * (12.5% - 9.2%) * (1 - 0.34)][/tex]Therefore,
Current equity cost of capital= 15.2125 %2. Calculation of beta risk of Lambton Bros:Given, Risk-free rate = 3%Expected return on market portfolio = 9.5%Market value of equity = 75%Market value of debt = 25%Beta = [(0.75 * Beta equity) + (0.25 * 0)]
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According to an article in the Wall Street Journal, both the quantity of organic milk sold and the price per half gallon have been falling. For each of the following scenarios, briefly explain whether the scenario can account for this outcome.
a. The demand for organic milk has been decreasing, while the supply of organic milk has been increasing.
b. The demand for organic milk has been increasing, while the supply of organic milk has been decreasing.
c. The demand for organic milk and the supply of organic milk have both been increasing.
d. The demand for organic milk and the supply of organic milk have both been decreasing.
According to the Wall Street Journal article, both the quantity of organic milk sold and the price per half gallon have been declining.
Each of the following situations is explained briefly to see whether it can account for this result: The demand for organic milk has been decreasing, while the supply of organic milk has been increasing: If demand for organic milk has decreased, while the supply of organic milk has increased, this could account for the reduction in both the amount of organic milk sold and the price per half gallon.
Because the market has more organic milk than it requires, this can trigger price reductions and a decrease in the quantity sold.b. The demand for organic milk has been increasing, while the supply of organic milk has been decreasing: The quantity of organic milk sold can decrease due to a drop in supply. If the quantity sold is decreasing, it may be as a result of a decrease in supply.
The demand for organic milk and the supply of organic milk have both been decreasing: If both demand and supply for organic milk have decreased, it should result in a fall in price and quantity sold, which is consistent with what is stated in the article. Thus, this scenario can account for the falling quantity and price of organic milk sold.
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crecit risk. If is considering the foliowing financing solution. Phang's bank issues a letter of credit on behali of Ptiang and agrees to accept Whatchamachit's draft for $118.000 due in. seven manthe. The acceptarice faie anrum discount in the money market. What is the anmuaized percontage all-in cost io Whatchamacaliet of this barkers' accoptance firancing? (NOTE Ansume a 360-day yoar.) The discount on the sale of accoptance to t (Round to the nearest cent) Calculato the net procoeds below: credit risk. It is considering the following firancing solution. Phang's bank issues a lefter of credit on bohalf of Phang and agrees to accopt Whatcharhacautits altalt for 5116 Co0 dive in seren monthe The sabetarce fos would cost Whatchamacalit $525, plus reduce Phang's avalable credit line by $118.000. The bankors' acoeplacke nole of $11 is 000 would be achd at a 21 the per 360-day yoar.) Calculate the net proceods below: The annualized percentage all-in cost (AlC) is %. (Round to three decimal places.)
The Annualized Percentage All-In Cost (AIC) to Whatchamacallit for this bankers' acceptance financing is 184.55% (rounded to three decimal places).
The credit risk considers the bankers' acceptance financing solution. Phang's bank agrees to accept the Whatchamacallit's draft due in seven months.
The acceptance faces an annual discount of $11,000 in the money market. Find the annualized percentage all-in cost (AIC) to Whatchamacallit for this bankers' acceptance financing.
The net proceeds of Whatchamacallit is calculated as follows:
Amount of Acceptance = $118,000
Discount Fee = $11,000
Bank Fee = $525
Total Cost = Discount Fee + Bank Fee = $11,000 + $525 = $11,525
Net Proceeds = Amount of Acceptance - Total Cost = $118,000 - $11,525 = $106,475
The Annualized Percentage All-In Cost (AIC) is given by;
AIC = [(Total Interest / Net Proceeds) / (Number of Days / 360)] x 100
We are to find the Annualized Percentage All-In Cost (AIC) to Whatchamacallit for this bankers' acceptance financing.
The Total Interest earned by the bank for seven months is;
Total Interest = Acceptance Face x Discount Rate x TimeTotal
Interest = $118,000 x 0.021 x (7 / 12)Total Interest = $1,144.50
Therefore;
AIC = [(Total Interest / Net Proceeds) / (Number of Days / 360)] x 100AIC = [($1,144.50 / $106,475) / (210 / 360)] x 100AIC = [0.0107499 / 0.583333] x 100AIC = 1.8455 x 100AIC = 184.55%
Thus, the Annualized Percentage All-In Cost (AIC) to Whatchamacallit for this bankers' acceptance financing is 184.55% (rounded to three decimal places).
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1. Describe the impact of technology on Human Resource Management in the last 5 years? Choose an organization that you are familiar with and indicate what technology it has and give concrete details o
Over the last 5 years, technology has had a significant impact on Human Resource Management (HRM). The influence of technology on HRM has resulted in improved productivity, effectiveness, and efficiency in the workplace.
Technology has facilitated HR managers' ability to access HR data, including personnel files, health benefits, and other critical HR information. This has allowed HR professionals to make better decisions based on the data available, ensuring that the company meets its objectives and improves its profitability.
Technology has provided HR managers with the tools to perform their roles with precision and speed.
Therefore, the use of technology in HRM has facilitated a shift from manual to digital HR processes. Some of the critical technological innovations in HRM in the past five years include the implementation of HR software, HR analytics, social media, and mobile recruitment apps.
These technological advancements have helped organizations stay competitive and adapt to the digital age. An organization that has embraced the use of technology in HRM is Amazon.
Amazon has deployed HRM software, including HR analytics and recruitment apps, to manage their workforce efficiently. Additionally, Amazon has implemented electronic communication and social media platforms to foster employee engagement and collaboration.
This has enabled Amazon to improve its efficiency, productivity, and profitability while retaining high-quality employees.
In conclusion, technology has significantly impacted HRM in the last five years by automating HR processes, providing HR managers with real-time data, and improving communication and collaboration between employees.
Companies that have embraced technology in HRM have gained a competitive advantage over their competitors.
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David and Debi Davidson have just signed a 15-year, 4% fixed-rate mortgage for $650,000 to buy their house. Find out this couple's monthly mortgage payment by preparing a loan amortization schedule for the Davidson’s for the first 2 months; find out how much of their payments applied to interest; and after 2 payments, how much of their principal will be reduced.
(Construct a loan amortization schedule and show your calculations for two monthly payments).
David and Debi Davidson have just signed a 15-year, 4% fixed-rate mortgage for $650,000 to buy their house. The monthly payment for mortgage loans can be calculated using the following formula.
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]`where P is the principal (amount borrowed), i is the interest rate per month, and n is the number of months for the mortgage loan. Mortgage calculation using the above formula is as follows; Principal amount, P = $650,000.
Interest rate, i = 4% / 12 = 0.0033 (because interest rates are yearly, and there are 12 months in a year)Number of monthly payments, n = 15 years * 12 months/year = 180 months Monthly Mortgage Payment, M = $4,759.72This means that the couple will have to make monthly payments of $4,759.72 over 15 years.
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I need an economic graph for Health insurance premiums paid by
the employer increase
The graph shows a positive slope indicating an upward trend in health insurance premiums paid by employers over time.
The graph illustrates the relationship between time and health insurance premiums paid by employers. As time progresses, the premiums increase, resulting in an upward trend on the graph. This indicates that employers are spending more money on health insurance coverage for their employees. there can be several factors contributing to this trend. One possibility is the rising cost of healthcare services and medical treatments. As medical expenses continue to climb, insurance companies increase their premiums to cover these costs, leading to higher expenses for employers.
Additionally, changes in healthcare policies or regulations may impact insurance premiums. For example, if new laws require broader coverage or include additional benefits, insurance providers may adjust their premiums accordingly, causing an increase in employer costs. employers may also choose to offer more comprehensive health insurance plans to attract and retain talented employees. This can lead to higher premiums as more extensive coverage often comes at a higher price. overall, the graph depicts a consistent increase in health insurance premiums paid by employers, highlighting the financial burden faced by businesses in providing healthcare benefits to their workforce.
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Q4,,,. You attach a United Way banner to your corporate headquarter building, and 10% of your target population drives by the billboard twice per week day, and the advertising campaign lasts 30 weekdays. You can put up the billboard at a traffic intersection, and 12 % of your target population drives by the billboard twice per weekday. How many weekdays must the campaign last if you wish to have the same GRP as the first option?
The campaign must last for approximately 25 weeks to achieve the same GRP as the first option.
To determine the number of weekdays the campaign must last to achieve the same Gross Rating Points (GRP) as the first option, we need to compare the reach of the two options.
In the first option, 10% of the target population drives by the billboard twice per weekday, and the campaign lasts for 30 weeks.
In the second option, 12% of the target population drives by the billboard twice per weekday.
To have the same GRP, we need to find the equivalent reach for the second option. We can set up the following equation:
12% of the target population driving by the billboard twice per weekday x Number of weekdays = 10% of the target population driving by the billboard twice per weekday x 30 weekdays
Simplifying the equation:
0.12 x Number of weekdays = 0.10 x 30
0.12 x Number of weekdays = 3
Number of weekdays = 3 / 0.12
Number of weekdays ≈ 25
Therefore, the campaign must last for approximately 25 weeks to achieve the same GRP as the first option.
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25-1) On January 1, 2018, Morrow Inc. purchased a spooler at a cost of $40,000. The equipment is expected to last eight years and have a residual value of $4,000. During its eight-year life, the equipment is expected to produce 250,000 units of product. In 2018 and 2019, 42,000 and 76,000 units respectively were produced. Required: Compute depreciation for 2018 and 2019, assuming the double-declining-balance method is used.
25-2) On April 1, 2021, Metro Co. purchased machinery at a cost of $42,000. The machinery is expected to last 10 years and to have a residual value of $6,000. Required: Compute depreciation for 2021 (for 9 months, 4/1/21 ~ 12/31/21) assuming the sum-of-the-years'-digits method is used.
25-3) On January 1, 2016, Denver Company bought a machine for $60,000. It was then estimated that the useful life of the machine would be eight years with a salvage value of $8,000. On January 1, 2020, it was decided that the machine's total life from acquisition date should have been only six years with a residual value of only $2,000. The company used straight-line depreciation. Required: Compute depreciation expense for 2020 (1/1/20 ~ 12/31/20).
1) Calculation of Depreciation using double-declining-balance method:
The double-declining-balance method is one of the more popular depreciation methods that organizations use. This method is faster than the straight-line method. It results in more significant depreciation expenses in the early years of the asset's life and then slows down as the asset ages.
This technique is based on the asset's current net book value multiplied by a fixed depreciation rate, which is twice the straight-line method's rate. The formula to calculate depreciation using double-declining-balance method is: Depreciation rate = 2 * (1/ Useful life) Depreciation for the Year = Depreciation rate * Book value at the beginning of the year Calculation of Depreciation for 2018: Depreciation rate = 2 * (1/ 8) = 25%.
Depreciation for 2018 = 25% * (40,000 - 0) = $10,000 Calculation of Depreciation for 2019: Depreciation rate = 2 * (1/ 8) = 25%Book value at the beginning of 2019 = $40,000 - $10,000 = $30,000Depreciation for 2019 = 25% * $30,000 = $7,50025.
2).Calculation of Depreciation using Sum-of-the-Years'-Digits method: Sum-of-the-Years'-Digits is a technique that allocates depreciation more proportionately to the early years of an asset's life. The sum of the years' digits is the summation of all the years of the asset's useful life, and it gives the denominator in each year's calculation.
This method calculates depreciation using a decreasing fraction of the asset's depreciable cost over its useful life.
The formula to calculate depreciation using Sum-of-the-Years'-Digits method is: Depreciation rate = Remaining useful life/Sum of the years' digits Depreciation for the year = Depreciation rate * Depreciable cost Calculation of Depreciation for 2021: Depreciable cost = Cost - Residual value = $42,000 - $6,000 = $36,000Remaining useful life = 10 years - 1 year (since it was purchased on April 1, 2021) = 9 years.
Sum of the years' digits = 10 + 9 + 8 + 7 + 6 + 5 + 4 + 3 + 2 + 1 = 55 Depreciation rate = Remaining useful life/Sum of the years' digits= 9/55Depreciation for 2021 = 9/55 * $36,000 = $5,872.73.
3) Calculation of Depreciation using Straight-Line method: In straight-line depreciation, the cost of an asset is spread uniformly over its useful life. The straight-line method results in the same depreciation expense every year and is usually the simplest method to calculate. The formula to calculate depreciation using the straight-line method is: Depreciation expense per year = (Cost - Residual value) / Useful life.
Calculation of Depreciation for 2020:Depreciable cost = Cost - Residual value = $60,000 - $8,000 = $52,000.
Useful life = Total life - Life already expired = 6 - 4 = 2 years. Depreciation expense per year = ($52,000 - $2,000)/2 years = $25,000Depreciation for 2020 = Depreciation expense per year = $25,000 .
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budget variances need to be reconciled only if the line item is over budget for the report period.
Budget variances should be reconciled regardless of whether the line item is over or under budget for the report period.
Budget variances occur when there is a difference between the actual expenses or revenues and the budgeted amounts. These variances provide valuable insights into the financial performance of a business and help identify areas of concern or areas where improvements can be made.
Reconciling budget variances involves analyzing the reasons behind the variances and taking appropriate actions to address them.
By reconciling budget variances, organizations can track their financial performance, make informed decisions, and ensure that their actual results align with their budgeted targets.
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Under USALI, what is the name used for the income statement? Select one: a. Summary Operating System b. Sales Operatirg System c. Slow Ongoing System d. Summary Ongoing System
Under USALI (Uniform System of Accounts for the Lodging Industry), the name used for the income statement is Summary Operating Statement. What is USALI.
The Uniform System of Accounts for the Lodging Industry (USALI) is a standardized accounting system for hotel properties in the United States. USALI is considered to be the industry standard for financial reporting in the hospitality industry.What is an Income Statement?An income statement, also known as a profit and loss statement, is a financial report that provides an overview of a company's revenues and expenses over a certain period of time. It shows the net income or net loss of a company over the given time period.
It is also known as the profit and loss statement (P&L) or income statement.The Summary Operating Statement is divided into two main sections: the revenue section and the expense section. The revenue section includes all sources of revenue earned by the hotel during the accounting period, while the expense section includes all expenses incurred by the hotel during the same period. By comparing the actual revenue and expenses to the budget, they can identify areas where they need to make adjustments to improve profitability.
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a) Which of the following events are studied in Macroeconomics?
Event
(YES or NO)
i. Increase 15 sen per liter of RON 95 as announced in the news recently.
ii. The unemployment rate in Malaysia has decreased by 0.5%
Expanding the money supply decreases the interest rate, increases investment, and stimulates aggregate demand.
iv. When a new technology is introduced in the production of lemonade, the supply of lemonade will increase.
V. The Thailand government makes it increasingly difficult for Malaysian firms to export goods to Thailand.
b) Explain how government copes with high inflation?
a) The events studied in macroeconomics are given below along with YES or NO for each of the given event:i. Increase 15 sen per liter of RON 95 as announced in the news recently: Yesii
The unemployment rate in Malaysia has decreased by 0.5%: Yesiii. Expanding the money supply decreases the interest rate, increases investment, and stimulates aggregate demand: Yesiv. When a new technology is introduced in the production of lemonade, the supply of lemonade will increase: NoV. The Thailand government makes it increasingly difficult for Malaysian firms to export goods to Thailand:
Yesb) Government Coping with High Inflation:Inflation is the rise in the prices of goods and services in an economy over a given period of time. High inflation has an effect on the economy as it reduces purchasing power, decreases productivity, and destabilizes the economy. Governments use different methods to cope with high inflation such as:1. Monetary Policy: Governments can control the supply of money to prevent inflation by increasing interest rates, which reduces the money supply.
2. Fiscal Policy: Governments can also control inflation through fiscal policy, which involves changing taxes and government spending.
3. Price Controls: Governments can use price controls, which involve setting a maximum price for certain goods or services.
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About [Company Name in black font] - Company's HQ country, industry, main products \& services, and years in business. - Locations and countries of subsidiaries and manufacturing operations (factories); countries it currently exports to and outsources from. - Company's competitive position in the industry, e.g. rank, market share, etc. - Company size and performance in terms of employees (turnover), annual sales revenues, profits, profit margin, growth rates, etc. - Current legal business ownership structure, e.g. proprietorship, partnership, private limited, public limited. - Current major owners/shareholders (holding 10% or more) and each one's \% share. - Company Sustainable Development Goals. (NOTE: All monetary amounts throughout the business plan must be provided in Canadian Dollars with commas separating groups of 3 digits. Example: \$1,450,000 CDN
The information on the company would be :
Company's HQ country: CanadaIndustry: TechnologyMain products & services: Software development, cloud computing, data analyticsHow to describe the company ?Locations and countries of subsidiaries and manufacturing operations (factories):
Headquarters: Vancouver, CanadaSubsidiaries: Toronto, Canada; New York, USA; London, UKManufacturing operations: Vancouver, CanadaCountries it currently exports to and outsources from:
Exports to: USA, UK, Europe, AsiaOutsources from: India, China, PhilippinesCompany's competitive position in the industry:
Rank: Top 10 software development companies in CanadaMarket share: 10%Company size and performance in terms of employees (turnover), annual sales revenues, profits, profit margin, growth rates, etc.:
Employees: 500Annual sales revenues: $100 million CDNProfits: $10 million CDNProfit margin: 10%Growth rates: 20% year-over-yearCompany Sustainable Development Goals:
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Vulcan Service Co. experienced the following transactions for Year 1, its first year of operations:
Provided $84,000 of services on account.
Collected $50,400 cash from accounts receivable.
Paid $30,000 of salaries expense for the year.
Adjusted the accounts using the following information from an accounts receivable aging schedule:
Number of Days
Past Due Amount Percent Likely to
Be Uncollectible Allowance
Balance
Current $ 24,864 .01 0-30 1,680 .05 31-60 2,352 .10 61-90 2,016 .30 Over 90 days 2,688 .50 Required
a. Record the above transactions in general journal form and post to T-accounts.
b. Prepare the income statement for Vulcan Service Co. for Year 1.
c. What is the net realizable value of the accounts receivable at December 31, Year 1?
Vulcan Service Co. is a service company that had the following transactions during the first year of operations. It provided $84,000 of services on account, collected $50,400 cash from accounts receivable, and paid $30,000 of salaries expense for the year.
The accounts receivable aging schedule provided information to adjust the accounts as shown below
:Number of Days Past Due Amount Percent Likely to Be Uncollectible Allowance Balance Current$24,864.01 0-301,680.05 31-602,352.10 61-902,016.30 Over 90 days2,688.50 a) The above transactions can be recorded in the following general journal entries:
Total operating expenses (30,466.80) Net Income $53,533.20 Therefore, the income statement of Vulcan Service Co. for Year 1 reveals that its net income is $53,533.20. c) The net realizable value of accounts receivable at December 31, Year 1 is calculated as shown.
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