1. The following are the sales forecast of Avril Furniture Company for the upcoming fiscal year:

Past experience has shown that the ending inventory for each quarter should be equal to 10% of the next quarter’s sales in units. The company expect to start the first quarter with 4,000 units.

Two pounds of material A are required for each unit produced. The company has a policy of maintaining a stock of material A on hand at the end of each quarter equal to 25% of the next quarter's production needs for material A. Fourth quarter ending of materials is estimated as 8,000 pounds and a total of 12,000 pounds of material A are on hand to start the year. The cost of material A is $3 per pound.

Required:

1. Prepare a production budget showing the number of units to be produced each quarter and for the year in total
2. Prepare Avril’s Direct Material Budget and calculate direct materials dollar amount of purchases by quarter and for the year in total

Prepare journal entries for these transactions for Year 1 and Year 2 and post them to T-accounts. lines 1 through 19

[The following information applies to the questions displayed below.]

Sun Corporation received a charter that authorized the issuance of 119,000 shares of $6 par common stock and 18,000 shares of $75 par, 6 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation:

Year 1

1.Jan. 5 Sold 17,850 shares of the $6 par common stock for $8 per share.

2. Jan 12 Sold 1,800 shares of the 6 percent preferred stock for $85 per share.

3. Apr. 5 Sold 23,800 shares of the $6 par common stock for $10 per share.

4. & 5. (record cash revenue earned & record payment for operating expenses) Dec. 31 During the year, earned $301,400 in cash revenue and paid $241,600 for cash operating expenses.

6. Dec 31 Declared the cash dividend on the outstanding shares of preferred stock for Year 1. The dividend will be paid on February 15 to stockholders of record on January 10, Year 2.

7, 8 & 9. (Record closing entry for service revenue, operating expenses & dividends) Dec 31 Closed the revenue, expense, and dividend accounts to the retained earnings account.

Year 2

10. Feb. 15 Paid the cash dividend declared on December 31, Year 1.

11. Mar. 3 Sold 2,700 shares of the $75 par preferred stock for $95 per share.

12. May 5 Purchased 500 shares of the common stock as treasury stock at $12 per share.

13 & 14. (record cash revenue earned & record payment for operating expenses)Dec. 31 During the year, earned $254,900 in cash revenues and paid $179,600 for cash operating expenses.

15. Dec 31 Declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock.

16, 17 & 18 (Record closing entry for revenue accounts, operating expenses & dividends) Dec 31 Closed revenue, expense, and dividend accounts to the retained earnings account.

19. Post all transactions to T-accounts

40. Assuming there is expected to be inflation over the coming year, will a 1-year TIPS (Treasury inflation protected security) offer a higher or lower interest rate than a comparable non-TIPS Treasury security?   
     
          Higher
          Lower
          Rates will be the same



41. What problems are caused by even a moderate level of inflation? (check all that apply)
     
          Unexpected redistribution of income, and the appearance of unfairness
          Errors in investment and savings decisions
          Expenditures of real resources to predict and adjust to inflation
          Money loses its value, and people turn to barter instead



42. How does the CPI compare to a true cost-of-living index?   
     
          The CPI has a downward bias
          The CPI has an upward bias
          The CPI is a true cost-of-living index
          The CPI varies from a true cost-of-living index in unpredictable ways



43. Which of the following statements about potential GDP are NOT true? (check all that apply)
     
          It is achieved only at the peak of the business cycle
          It is impossible to precisely measure
          It is somewhat inside the production possibilities curve
          It will increase when the prices of resources go down
          There is no cyclical unemployment
          Uemployment equals the natural rate



44. When aggregate demand and aggregate supply intersect to the left of potential GDP, we say that the economy is experiencing ____ .   
     
          A recessionary GDP gap
          An inflationary GDP gap
          A stable long-run equilibrium position
          Rapid inflation
          Falling potential GDP



45. If the economy is operating well below potential GDP, what will be the effect of an increase in aggregate demand?   
     
          Real GDP will fall, and the price level will fall
          Real GDP will rise, and the price level will change very little
          Real GDP will rise, and the price level will rise significantly
          It is impossible to predict what will happen to real GDP, but the price level will fall
          It is impossible to predict what will happen to the price level, but real GDP will fall

Suppose that an investor with a 5 year investment horizon is considering purchasing a 7 year, 9% coupon bond selling at par. The investor expects that he can reinvest the coupon at an annual interest rate of 9.4% and that at the end of the investment horizon 5 year bond will be selling to offer a yield to maturity of 11.2%. What is the total return for this bond?

32. Suppose the government was operating a balanced budget in the year 2025. The next year, in 2026, the government cut taxes by $20 billion.

Part 1: After the tax cut is implemented, what is the impact on public saving? Using an equation or model, explain your answer.

Part 2: Assume that all consumers believe the tax cut is going to be matched by a tax increase in the near future. As such, consumers save the full proceeds of the tax cut. What is the impact of the tax cut on private savings? Using an equation or model, explain your answer.

Part 3: Assume that all consumers believe the tax cut is permanent. As such, consumers spend the full proceeds of the tax cut. What is the impact of the tax cut on private savings? Using an equation or model, explain your answer.

Part 4: In both scenarios – (a) consumers save all of the tax cut and (b) consumers spend all of the tax cut – what is the impact on national saving? Using an equation or model, explain your answer both scenarios.

Determine the value of EUAW of $3,750 received in year 0 and a year after begins to yield $1,000 a year for 6 years at an interest of 10%

They forecast new revenues of $100 million in the first year and $200 million in year 2, growing at 2.5% per year thereafter. The cost of goods underlying these new revenues is 45 percent of the revenues.

To achieve these synergies will require an investment of $400 million initially, and 5% of the added revenue each year, to fund working capital growth.

Find the net present value of these synergies using a discount rate of 15% and a marginal tax rate of 40%.

Please show how answers are derived.

You believe that the likelihood that next year is a bull market year is 50%. You also believe that a bear market may occur with 20% likelihood. The following table contains information on the rates of return on various assets next year under various economic scenarios.

a) The capital allocation line is also called the capital market line, if the risky portfolio is the market portfolio. Write down the equation for the Capital Market Line using the information on the market portfolio in the table above.

b) What are the betas of security X and security Y? According to CAPM, are securities X and Y fairly priced? Explain.

As for the sales forecast for Year 1 through Year 3, these are some important variables I will go to consider for sales:

Economy: The economic condition of the city, the province and the country are variables I need to consider for a sales forecast. If conditions are poor, people will spend less money on consumption. If economic conditions are great, then more people will have extra money to spend.

Competition: I need to consider the level of competition I have around me. If new competitors enter the market, that can affect my sales forecast drastically. The same goes for if my competitors drop out of the market.

Inflation: Inflation is something that effects every country, and effects the economic conditions. So, I need to consider trends of inflation (and inflation forecasts) in order to make a sales forecast.

Political Environment: I need to consider the political environment of the city, the province and the country. The political environment affects the economy and business law. If there is an election within my sales forecast period, I need to consider the potential outcomes of each election.

Seasonal Demands: I need to consider seasonal demands and trends because each season has a different demand for products. Summertime is going to require cold beverages, meanwhile winter will have a demand for hot beverages. Each season will also affect overall sales. People spend more money in the summer. A sales forecast will have to consider all these seasonal demands and changes into the model.

Where to obtain data: Government websites, Market research firms, Political experts, Stock Market data, Google Maps (search for competitors) or Drive around my area (locate competitors visually), City database, Economic analysts

Part 1

1.Are these considerations feasible? Would you change or add any considerations?

2.As a lender (someone who commits capital with the expectation of receiving financial returns) to this company, what are some numbers you want this entrepreneur to show you before you make your decision to invest your money?

The biggest challenges throughout the planning process is determining start up costs, determining inventory and determining the location of the store. The start up costs are a big challenge due to there being a number of variables such as how much inventory is smart to start off with, how much to pay in utilities (can easily fluctuate), and how much to pay in advertising the store to customers. Determining inventory is also a challenge because orders must be placed to keep up with inventory and determining a schedule for that is based on revenue, but during the planning process revenue can only be projected and not consistently known. Determining the location of the store is also a challenge, it is an extremely important decision that will make or break the success of the store. Calculating how many customers are nearby, as well as type of income (lower-class, middle-class, upper class, etc.) is also challenging.

The growth potential of my business is tremendous. I view after a few months, for there to be a solid foundation for revenue. The first few months may be tough because the public either doesn’t know about the store, or don’t have a trust built with the store yet. Once I am established, I see my store serving the community with well needed convenience products and establishing a

casual customer base. Once I’m established after a few months, I expect revenue to climb and stabilize. After a few years I expect to be financially in a great position. Some profits can be diverted to upgrades for the store, improving customer experience (maybe experiment with new and diverse products). After a few years, I see myself expanding by buying other Circle K franchises to open or try to buy established stores from owners. This would require saving up a lot of the profit but in the long run it is a great investment in my opinion.

Part 2

3.This entrepreneur mentioned some big challenges he/she would face when starting this business. Do you agree? Explain your decision

4.Evaluate the growth potential of the business. Would you agree with this entrepreneur’s vision? Why or why not?

hello chegg, please provide references from where you pick the data to answer these questions

Acme Inc. manufactures widgets. This year was a great year with a increase in both sales and production volume. In addition, the cost per unit dropped significantly from the prior year. These facts (probably) imply that: