In December 2015, Apple had cash of $37.98 billion, current assets of $76.66 billion, and current liabilities of $76.12 billion. It also had inventories of $2.45 billion.
a. What was Apple's current ratio?
b. What was Apple's quick ratio?
c. In January 2016, Hewlett-Packard had a quick ratio of 0.66 and a current ratio of 0.90
What can you say about the asset liquidity of Apple relative toHewlett-Packard?
In: Finance
The 2015 income statement for Egyptian Noise Blasters shows that depreciation expense is $82 million, NOPAT is $245 million. At the end of the year, the balance of gross fixed assets was $660 million. The change in net operating working capital during the year was $72 million. Egyptian’s free cash flow for the year was $190 million.
Calculate the beginning-of-year balance for gross fixed assets. (Enter your answer in millions of dollars.)
In: Finance
The 2013 balance sheet of Maria's Tennis Shop, Inc., showed long-term debt of $1.9 million, and the 2014 balance sheet showed long-term debt of $2.6 million. The 2014 income statement showed an interest expense of $655,000. During 2014, Maria’s Tennis Shop, Inc., had a cash flow to stockholders for the year of $321,000. Suppose you also know that the firm’s net capital spending for 2014 was $855,000, and that the firm reduced its net working capital investment by $76,000 What was the firm’s 2014 operating cash flow, or OCF?
In: Finance
Part 1.
|
Newspaper ad |
$120 per month |
|
Social media manager |
$100 per month; $1 per job scheduled |
|
Payment collection |
$0.75 per job |
|
Gas |
$4.00 per job |
Considering his analysis of similar services and to keep things simple, W.T. plans to price all jobs the same and charge $15 per job. Because of this flat rate, he anticipates he’ll likely need to create different types of “jobs”. For example, purchasing a list of items at the grocery store would be one job, while a bundle of 2-3 small errands such as picking up dry cleaning and prescriptions, might be considered one job. We’ll deal with those details later. For now, assume that all jobs are priced at $15 each and all have the associated variable expenses listed above.
Because this will be a new business, W.T. knows business will likely be slow at the beginning. Complete the following table assuming W.T. completes 10 jobs in a single month.
|
Item |
Per Job |
Total (10 jobs) |
Computations |
|
Sales |
$ |
$ |
|
|
Less: Variable Cost |
$ |
$ |
|
|
Contribution Margin |
$ |
$ |
|
|
Less: Fixed Cost |
$ |
$ |
|
|
Gross Margin |
$ |
$ |
Part 2
Yikes! He’ll clearly have to complete more than 10 jobs. W.T. needs to be able to at least cover his costs. Still using the preliminary estimates provided, how many jobs would W.T. have to complete to break even? What would that be in dollars?
(1) Contribution margin:
|
Sales price per job |
$ |
|
Less: Variable costs per job |
$ |
|
=Contribution margin per job |
$ |
(2) Break-even point in units:
|
Fixed costs |
= |
$ |
= |
jobs |
|
Contribution margin per job |
$ |
Note: W.T. won’t be paid if he only completes part of a job.
(3) Break-even point in sales:
|
Break-even point in jobs |
x |
Sales price per job |
= |
Break-even point in dollars |
|
x |
$ |
= |
$ |
Check your work:
|
Total sales |
$ |
|
Less: Total variable costs |
$ |
|
= Total contribution margin |
$ |
|
Less: Total fixed costs |
$ |
|
= Total profit |
$ |
Part 2
Yikes! He’ll clearly have to complete more than 10 jobs. W.T. needs to be able to at least cover his costs. Still using the preliminary estimates provided, how many jobs would W.T. have to complete to break even? What would that be in dollars?
(1) Contribution margin:
|
Sales price per job |
$ |
|
Less: Variable costs per job |
$ |
|
=Contribution margin per job |
$ |
(2) Break-even point in units:
|
Fixed costs |
= |
$ |
= |
jobs |
|
Contribution margin per job |
$ |
Note: W.T. won’t be paid if he only completes part of a job.
(3) Break-even point in sales:
|
Break-even point in jobs |
x |
Sales price per job |
= |
Break-even point in dollars |
|
x |
$ |
= |
$ |
Part 3
That number of jobs seems doable to W.T. But the whole reason he’s going into business is to make a profit. Otherwise, he’ll end up using all of his savings and he definitely doesn’t have enough to last the entire school year. W.T.’s parents help him cover a number of his expenses, but he needs to generate at least $400 per month to avoid having to use any savings.
How many jobs would W.T. need to complete to earn $400? What would that be in dollars?
(1) Sales volume to earn desired profit (in units):
|
Fixed costs + Desired profit |
= |
$ |
+ |
$ |
= |
jobs |
|
Contribution margin per job |
$ |
|||||
Remember: W.T. can’t complete just part of a job.
(2) Sales volume to earn desired profit (in dollars):
|
Required units |
x |
Sales price per unit |
= |
Sales in dollars required to earn desired profit |
|
x |
$ |
= |
$ |
Check your work:
|
Total sales |
$ |
|
Less: Total variable costs |
$ |
|
= Total contribution margin |
$ |
|
Less: Total fixed costs |
$ |
|
= Total profit |
$ |
Question: Why isn’t the profit exactly $400?
In: Finance
Explain in your own words the tax policy reason behind section 118-195 Income tax Assessment Act 1997 with respect to deceased estates. In so doing discuss why the commissioner has been given the discretion to extend the two year period . Your answer must be supported by reference to legislation case law and tax rulings if any... note: Australian taxation law
In: Finance
Excel assignment
In: Finance
|
We are evaluating a project that costs $768,000, has a six-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 57,000 units per year. Price per unit is $60, variable cost per unit is $35, and fixed costs are $770,000 per year. The tax rate is 35 percent, and we require a return of 15 percent on this project. |
| a. |
Calculate the accounting break-even point. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
| Break-even point | units |
| b-1 |
Calculate the base-case cash flow and NPV. (Do not round intermediate calculations and round your NPV answer to 2 decimal places, e.g., 32.16.) |
| Cash flow | $ | |
| NPV | $ | |
| b-2 |
What is the sensitivity of NPV to changes in the sales figure? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) |
| ΔNPV/ΔQ | $ |
| c. |
What is the sensitivity of OCF to changes in the variable cost figure? (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) |
| ΔOCF/ΔVC | $ |
In: Finance
Simple Simon's Bakery purchases supplies on terms of 1.3 divided by 10 comma net 271.3/10, net 27. If Simple Simon's chooses to take the discount offered, it must obtain a bank loan to meet its short-term financing needs. A local bank has quoted Simple Simon's owner an interest rate of 10.1% on borrowed funds. Should Simple Simon's enter the loan agreement with the bank and begin taking the discount? (Use 365 days for a year.)
In: Finance
In: Finance
|
The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 34 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. |
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | ||||||
| Investment | $ | 28,000 | ||||||||
| Sales revenue | $ | 14,500 | $ | 15,000 | $ | 15,500 | $ | 12,500 | ||
| Operating costs | 3,100 | 3,200 | 3,300 | 2,500 | ||||||
| Depreciation | 7,000 | 7,000 | 7,000 | 7,000 | ||||||
| Net working capital spending | 340 | 390 | 440 | 340 | ? | |||||
| a. |
Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.) |
| Year 1 | Year 2 | Year 3 | Year 4 | ||
| Net income | $ | $ | $ | $ | |
| b. |
Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) |
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | |
| Cash flow | $ | $ | $ | $ | $ |
| c. |
Suppose the appropriate discount rate is 12 percent. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| NPV | $ |
In: Finance
The December 31, 2018, balance sheet of Trelan, Inc., showed long-term debt of $1,405,000, $141,000 in the common stock account, and $2,660,000 in the additional paid-in surplus account. The December 31, 2019, balance sheet showed long-term debt of $1,590,000, $151,000 in the common stock account and $2,960,000 in the additional paid-in surplus account. The 2019 income statement showed an interest expense of $94,500 and the company paid out $146,000 in cash dividends during 2019. The firm’s net capital spending for 2019 was $970,000, and the firm reduced its net working capital investment by $126,000. What was the firm's 2019 operating cash flow, or OCF?
In: Finance
Describe some examples of checking and savings account transactions
that result in assessments of fees or penalties. Which are the
least and most avoidable?
2. Analyze your personal budget as a financial planning tool for making decisions in the following situations. In each case, how will they affect your budget (consider each individually)?
a. A neighbor and coworker suggest that he and you commute to work
together.
b.
The roofers inform you that your chimney needs be to repointed and
relined as well as your new roof, and the cost will be an
additional $4,000 - billed monthly.
c.
You have a part-time job where you make a consistent $700 a month
and are considering giving that up and putting more time into your
hobby which has an upfront cost of $5,000 to get off the ground as
a business, but, assuming it goes well, could earn you $1,000
month.
d.
Your car is just about on its "last wheels", you can buy a used car
for $250 a month for 3 years, but it is not that great on gas
mileage (18 mpg) and you drive 20,000 miles a
year. Or
you can buy a new car that
has payments of $375 a month for 5 years, but it gets great gas
mileage (34 mpg). Decide what you would do and explain the impact
to your budget.
3. Review your list of personal financial goals. For each goal, how does the U.S. Tax Code help or hinder you in achieving it?
In: Finance
In: Finance
Use the following table that shows the options available on DEF stock (which currently trades at $112) to answer the next seven questions.
|
Call Premiums |
Put Premiums |
|||||||||||||||||||||||||||||||||
|
Strike |
Jan. |
Feb. |
Jan. |
Feb. |
||||||||||||||||||||||||||||||
|
105 |
7.50 |
7.75 |
.50 |
.60 |
||||||||||||||||||||||||||||||
|
110 |
6.25 |
6.50 |
.65 |
.75 |
||||||||||||||||||||||||||||||
|
115 |
1.15 |
1.20 |
3.25 |
3.62 |
||||||||||||||||||||||||||||||
|
120 |
.75 |
.95 |
8.10 |
8.85 Question 15
5 points Question 16
5 points Question 17
5 points Question 18
5 points Question 19
5 points Question 20
|
||||||||||||||||||||||||||||||
In: Finance
In: Finance