Water World
is considering purchasing a water park in Atlanta, Georgia, for
$1,950,000.
The new facility will generate annual net cash inflows of
$481,000
for
eighteight
years. Engineers estimate that the facility will remain useful for
eighteight
years and have no residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of
1010%
on investments of this nature.
LOADING...
(Click the icon to view the Present Value of $1 table.)
LOADING...
(Click the icon to view Present Value of Ordinary Annuity of $1 table.)
LOADING...
(Click the icon to view Future Value of $1 table.)
LOADING...
(Click the icon to view Future Value of Ordinary Annuity of $1 table.)Read the requirements
LOADING...
.
Requirement 1. Compute the payback, the ARR, the NPV, the IRR, and the profitability index of this investment.
First, determine the formula and calculate payback. (Round your answer to one decimal place, X.X.)
|
Amount invested |
/ |
Expected annual net cash inflow |
= |
Payback |
|
|
$1,950,000 |
/ |
$481,000 |
= |
4.1 |
years |
Next, determine the formula and calculate the accounting rate of return (ARR). (Round the percentage to the nearest tenth percent, X.X%.)
|
Average annual operating income |
/ |
Average amount invested |
= |
ARR |
|
|
$237,250 |
/ |
$975,000 (how did they get this?) |
= |
24.3 |
% |
Calculate the net present value (NPV). (Enter any factor amounts to three decimal places, X.XXX.)
|
Net Cash |
Annuity PV Factor |
Present |
||
|
Years |
Inflow |
(i=10%, n=8) |
Value |
|
|
1 - 8 |
Present value of annuity |
|||
|
0 |
Investment |
|||
|
Net present value of the investment |
||||
In: Accounting
A random sample of 17 police officers in Oak Park has a mean annual income of $35,800 and a standard deviation of $7,800. In Homewood, a random sample of 18 police officers has a mean annual income of $35,100 and a standard deviation of $7,375. Test the claim at α = 0.01 that the mean annual incomes in the two cities are not the same. Assume the population variances are equal.
a. Write down the type of test you will conduct.
b. Write down the null and alternative hypotheses.
c. Construct the test statistic.
d. Conduct the test.
e. What do you conclude?
In: Statistics and Probability
Water WorldWater World
is considering purchasing a water park in Atlanta, Georgia, for
$1,950,000.
The new facility will generate annual net cash inflows of
$481,000
for
eight
years. Engineers estimate that the facility will remain useful for
eight
years and have no residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of
10%
on investments of this nature.
LOADING...
(Click the icon to view the Present Value of $1 table.)
LOADING...
(Click the icon to view Present Value of Ordinary Annuity of $1 table.)
LOADING...
(Click the icon to view Future Value of $1 table.)
LOADING...
(Click the icon to view Future Value of Ordinary Annuity of $1 table.)Read the requirements
LOADING...
.
Requirement 1. Compute the payback, the ARR, the NPV, the IRR, and the profitability index of this investment.
First, determine the formula and calculate payback. (Round your answer to one decimal place, X.X.)
|
Amount invested |
/ |
Expected annual net cash inflow |
= |
Payback |
|
|
/ |
= |
years |
|||
In: Accounting
Question 1
A company is building an amusement park and has the following projected cashflows. Costs consist of building costs and staff salaries:
|
Year |
Building costs (assume as being paid at start of each respective year) |
|
1 |
$100,000 |
|
2 |
$50,000 |
|
3 |
$30,000 |
|
4 |
$45,000 |
5 $0 for year 5 and all future years for building costs
Staff salaries
$4,000 for year 1, increasing by a discrete step of $100 at the start of each future year, but paid continuously throughout each year, every year into the future
Revenue consists of ticket sales, merchandise sales, and food and beverage sales: Food and beverages
For all 30 years,
Tickets: $2000 per month for all years. Assume as paid at end of each month.
Merchandise: Equal to 1/3 of ticket sales
Food and beverages: $4250 per year, increasing by $50 per year in each future year. Assume the amount in each year is earned (paid) in the middle of each year.
Investors in the amusement park want to know what the Net Present Value (NPV) of this project is, assuming:
a risk discount rate (effective yield) of 14% per annum; and
a 30-year time horizon (i.e. all costs and revenues cease after 30 years).
(a) Calculate the present value of costs. Show all workings. [4 marks]
(a) Calculate the present value of revenue. Show all workings. [4 marks]
(b) Hence, calculate the NPV of the overall project. [1 mark]
In: Finance
In: Accounting
Preparation of financial statements
The commissioners of the Regents Park Commission Special Revenue Fund approved the following budget for calendar year 2019. Assume that the fund balance (Restricted) at the beginning of the year was $10,000. Also, assume that no encumbrances were outstanding and no supplies were on hand at the beginning or the end of the year. Prepare a statement of revenues, expenditures, and changes in fund balance. In addition, prepare a budgetary comparison schedule, assuming the originally approved budget and the final budget are identical.
| Estimated Revenues | |||
| Property taxes | $300,000 | ||
| Concession rentals | 100,000 | ||
| Fees and user charges | 200,000 | $600,000 | |
| Appropriations | |||
| Wages and salaries | $200,000 | ||
| Capital equipment | 240,000 | ||
| Transfer to Debt Service Fund | 60,000 | ||
| Supplies | 50,000 | 550,000 | |
| Budgeted Increase in Fund Balance | $50,000 | ||
| During the year, actual revenues were as follows: | |||
| Property taxes | $300,000 | ||
| Concession rentals | 120,000 | ||
| Fees and user charges | 185,000 | ||
| Actual expenditures were as follows: | |||
| Wages and salaries | $199,000 | ||
| Capital equipment | 236,000 | ||
| Transfer to Debt Service Fund | 60,000 | ||
| Supplies | 48,000 |
In: Finance
A nearby park is comprised of 15% pine, 20% elm, 30% alder and 35% cedar. In the spring, the surrounding city is flooded with pollen. You wonder whether these four tree species contribute proportionally to the total pollen count.
Using air traps, you collect pollen samples. After mixing them, you separate out 1000 pollen granules and identify them by species. Here are the data:
| pine | 211 |
| elm | 148 |
| alder | 299 |
| cedar | 342 |
The question of interest is whether the tree species contribute proportionally to pollen count.
Step 2: State the null hypothesis.
Step 3: State the alternative hypothesis.
Step 4: What is the correct level of alpha?
Step 5: Which statistical test are you using?
Step 6: What is the value of the test statistic?
Step 6 continued: How many degrees of freedom in this test?
Step 7: What is the critical value for the test statistic?
Step 8: How does the test statistic compare to the critical value?
Step 9: Based on this comparison, do you accept or reject your null hypothesis?
Step 10: What do you conclude from this analysis?
In: Statistics and Probability
Mary went on a run at the park to get her mind off her busy week. When she went on her run she saw a huge bear. She was in shock and froze, feeling her muscles starting to constrict and finding herself having trouble breathing. When the bear started coming after her she panicked and ran for her life.
1. Which of the following are true of her autonomic nervous system?
A. Mary’s muscles were being innervated by the cranial and sacral region of her sympathetic nervous system.
B. Mary’s ventricle columns of her periaqueductal gray caused her immobility.
C. Cortisol and adrenaline were being released and spread through her body causing the excitation of her muscles and inhibition of her bronchioles.
D. Two are correct.
E. All are correct.
2. As Mary ran away she luckily lost the bear but she ran so fast that she tripped over a log of wood hitting her knee pretty hard and screaming “OUCH.” Which of the following correctly explain her efferent pathways which are taking the information back from her Central Nervous System to her motor neurons?
A. Her somatic motor neurons consist of several neural pathways from the Central Nervous System to innervate the skeletal muscle.
B. Her motor neurons consist of adrenergic receptors on its dendrites/ cell bodies which bind to neurotransmitters, adrenaline or noradrenaline
C. No more than ten of her muscle fibers are innervated per motor neuron.
D. All of the above.
E. None of the above.
3. As Mary was on her way home she decided to go to the doctor to make sure she didn’t get an infection from her fall. When she got there the doctor first took her vitals. He told her everything was fine with her leg but when he used a stethoscope to listen to her heartbeat he heard a lub-dub-whistle. Which of the following are correct?
A. Scar tissue has built up in her atrioventricular valve which makes opening of the valve harder.
B. The murmurs of the heart occurs during systole as the heart is ejecting blood during contraction.
C. The blood is moving by what's called turbulent flow.
D. Two are correct.
E. All are correct.
In: Anatomy and Physiology
A parking garage charges R7.50 minimum fee to park for
up to three and half
hours. The garage charges an additional R1.50 per hour for each
hour or part
thereof in excess of three hours. The maximum charge for any given
24- hour
period is R25.72. Write a program that calculates and prints the
parking
charges for each of three customers who parked their cars in this
garage at
some time. You should enter the hours parked for each customer.
Your
program should print the results in a neat tabular format and
should calculate
and print the total of receipts. The program should use the
function
calculateCharges to determine the charge for each customer. The
payment
amounts should be printed inside the body of main().
In: Computer Science
THE BATHTUB PERIOD
The award of the Scott contract on January 3, 1987, left Park Industries elated. The Scott Project, if managed correctly, offered tremendous opportunities for follow-on work over the next several years. Park's management considered the Scott Project as strategic in nature.
The Scott Project was a ten-month endeavor to develop a new product for Scott Corporation. Scott informed Park Industries that sole-source production contracts would follow, for at least five years, assuming that the initial R&D effort proved satisfactory. All follow-on contracts were to be negotiated on a year-to-year basis.
Jerry Dunlap was selected as project manager. Although he was young and eager, he understood the importance of the effort for future growth of the company. Dunlap was given some of the best employees to fill out his project office as part of Park's matrix organization. The Scott Project maintained a project office of seven full-time people, including Dunlap, throughout the duration of the project. In addition, eight people from the functional department were selected for representation as functional project team members, four full-time and four half-time.
Although the workload fluctuated, the manpower level for the project office and team members was constant for the duration of the project at 2,080 hours per month. The company assumed that each hour worked incurred a cost of $60.00 per person, fully burdened.
At the end of June, with four months remaining on the project, Scott Corporation informed Park Industries that, owing to a projected cash flow problem, follow-on work would not be awarded until the first week in March (1988). This posed a tremendous problem for Jerry Dunlap because he did not wish to break up the project office. If he permitted his key people to be assigned to other projects, there would be no guarantee that he could get them back at the beginning of the follow-on work. Good project office personnel are always in demand.
Jerry estimated that he needed $40,000 per month during the “bathtub” period to support and maintain his key people. Fortunately, the bathtub period fell over Christmas and New Year's, a time when the plant would be shut down for seventeen days. Between the vacation days that his key employees would be taking, and the small special projects that his people could be temporarily assigned to on other programs, Jerry revised his estimate to $125,000 for the entire bathtub period.
At the weekly team meeting, Jerry told the program team members that they would have to “tighten their belts” in order to establish a management reserve of $125,000. The project team understood the necessity for this action and began rescheduling and replanning until a management reserve of this size could be realized. Because the contract was firm-fixed-price, all schedules for administrative support (i.e., project office and project team members) were extended through February 28 on the supposition that this additional time was needed for final cost data accountability and program report documentation.
Jerry informed his boss, Frank Howard, the division head for project management, as to the problems with the bathtub period. Frank was the intermediary between Jerry and the general manager. Frank agreed with Jerry's approach to the problem and requested to be kept informed.
On September 15, Frank told Jerry that he wanted to “book” the management reserve of $125,000 as excess profit since it would influence his (Frank's) Christmas bonus. Frank and Jerry argued for a while, with Frank constantly saying, “Don't worry! You'll get your key people back. I'll see to that. But I want those uncommitted funds recorded as profit and the program closed out by November 1.”
Jerry was furious with Frank's lack of interest in maintaining the current organizational membership.
Case Study Questions:
Should Jerry go to the General Manager? Why or why not? Think back to what is expected of a project manager and the project charter.
Should the key people be supported on overhead? Why or why not?
If this were a cost-plus program, would you consider approaching the customer with your problem in hopes of relief? Why or why not?
If you were the customer of this cost-plus program, what would your response be for additional funds for the bathtub period, assuming cost overrun? Why or why not?
Would your previous answer change if the program had the money available as a result of being under budget? Why or why not?
How do you prevent this situation from recurring on all yearly follow-on contracts?
In: Operations Management