A growing concern of employers is time spent in activities like surfing the Internet and e-mailing friends during work hours. The San Luis Obispo Tribune summarized the fundings from a survey of a large sample of workers in an article that ran under the headline "Who Goofs Off 2 Hours a Day? Most Workers, Survey Says" (August 3, 2006). Suppose that the CEO of a large company wants to determine whether the average amount of waisted time during an 8-hour work day for employees of her company is less than the reported 120 minutes. Each person in a random sample of 12 employees was contacted and asked about daily waisted time at work. The resulting data are the following:

108   112 117 128 130 111 131 116 113 113 105    128

The CEO wants to determine if these data provide evidence that the mean wasted time for this company is less than 120 minutes. Assuming that the population distribution is approximately normal, find the P-value for this test.

JJ Industries will pay a regular dividend of $2.4 per share for each of the next four years. At the end of the four years, the company will also pay out a liquidating dividend of $74 per share, and the company will cease operations. If the discount rate is 13 percent, what is the current value of the company’s stock?

(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Gatti Corporation reported the following balances at June 30.

Required:
1. What amount should be reported as Cash and Cash Equivalents?

2. Prepare a classified balance sheet. Do not show the components that add up to your answer in requirement 1 but rather show only the line Cash and Cash Equivalents. (Amounts to be deducted should be indicated by a minus sign.)

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Question 3 of 4 Total

Proposal #1 would extend trade credit to some customers that previously have been denied credit because they were considered poor risks. Sales are projected to increase by $150,000 per year if credit is extended to these new customers. Of the new accounts receivable generated, 7% are projected to be uncollectible. Additional collection costs are projected to be 3% of incremental sales (whether they actually end up collected or not), and production and selling costs are projected to be 80% of sales. Your firm expects to pay a total of 40% of its income after expenses in taxes.

1) Compute the incremental income after taxes that would result from these projections:

2) Compute the incremental Return on Sales if these new credit customers are accepted: If the receivable turnover ratio is expected to be 3 to 1 and no other asset buildup is needed to serve the new customers…

3) Compute the additional investment in Accounts Receivable

4) Compute the incremental Return on New Investment

5) If your company requires a 20% Rate of Return on Investment for all proposals, do the numbers suggest that trade credit should be extended to these new customers? Explain.

Proposal #1 would extend trade credit to some customers that previously have been denied credit because they were considered poor risks. Sales are projected to increase by $150,000 per year if credit is extended to these new customers. Of the new accounts receivable generated, 7% are projected to be uncollectible. Additional collection costs are projected to be 3% of incremental sales (whether they actually end up collected or not), and production and selling costs are projected to be 80% of sales. Your firm expects to pay a total of 40% of its income after expenses in taxes.

1) Compute the incremental income after taxes that would result from these projections:

2) Compute the incremental Return on Sales if these new credit customers are accepted: If the receivable turnover ratio is expected to be 3 to 1 and no other asset buildup is needed to serve the new customers…

3) Compute the additional investment in Accounts Receivable

4) Compute the incremental Return on New Investment

5) If your company requires a 20% Rate of Return on Investment for all proposals, do the numbers suggest that trade credit should be extended to these new customers? Explain.

Proposal #1 would extend trade credit to some customers that previously have been denied credit because they were considered poor risks.   Sales are projected to increase by $150,000 per year if credit is extended to these new customers. Of the new accounts receivable generated, 7% are projected to be uncollectible. Additional collection costs are projected to be 3% of incremental sales (whether they actually end up collected or not), and production and selling costs are projected to be 80% of sales. Your firm expects to pay a total of 40% of its income after expenses in taxes.

1)Compute the incremental income after taxes that would result from these projections:

2)Compute the incremental Return on Sales if these new credit customers are accepted:

If the receivable turnover ratio is expected to be 3 to 1 and no other asset buildup is needed to serve the new customers…

3)Compute the additional investment in Accounts Receivable

4)Compute the incremental Return on New Investment

5)If your company requires a 20% Rate of Return on Investment for all proposals, do the numbers suggest that trade credit should be extended to these new customers? Explain.

The Downtown Parking Authority of Tampa, Florida, reported the following information for a sample of 231 customers on the number of hours cars are parked and the amount they are charged.

Module 4 Discussions

Please choose at least one of the below "Test Your Knowledge" questions and post a 200 to 300 words substantive comment. Please respond to one of your peer's discussion by posting a substantive comment. Don't forget that 30% of your grade is based upon your comment to your peer's posting.

Test Your Knowledge

Why is the GAAP concept of objective measurement paramount in understanding asset valuation?

Describe Mark-to-Market asset valuation.

Distinguish between Net Realizable Value and Replacement Cost.

What are the advantages and disadvantages to measuring asset values based on expected future profits?

How does a health care provider indicate the obligation of providing care under a managed care contract that has been paid in advance?

In a publicly traded organization, why might a company have a market value that differs from the Owners’ Equity on the balance sheet?

Peers Response:Distinguishes Net Realizable Value and replacement cost are two different methods for determining assets and how it can help the company/organization. Net realizable value is an alternative for valuation of assets. In the event that the organization hits financial hardship, by using this method a company can determine that value of all the assets in the company. If the value is enough, it may be just enough to pull the company out of the "red" keep the company a float. As a future healthcare administrator, net realizable value gives me a better understanding of the funds we have around us. The only bad part about this method is that it can only be used for one thing and that's finding value of assets, but it can not be used to determine the potential profit. If the assets within the company are ever appraised whose to say that the appraiser would my company a good estimate on each item. Depending on the demand of an item, the appraiser can price the item a little higher. But , if the items were not in demand then that would lessen the companies chance of being able to buy their way of potential foreclosure. Replacement cost is also an alternative method of determining assets. This method is the opposite of Net realizable value. Instead of finding out the value of asset in case they need to be sold. This method determines the cost to replace said items. Now, from what I have read it would be pretty hard to determine the correct replacement cost of a building.