1) Green T-Shirt Processing has a unit sales price of $20 for their t-shirt. The contribution margin percentage is 70%.
If they sold 7,000 shirts last quarter and fixed costs totaled $10,000, what is their net operating income?
a. $98,000
b. They are at breakeven
c. $88,000
d. None of the above
2) Green T-Shirt Processing has a unit sales price of $20 for their t-shirt. The contribution margin percentage is 70%.
What is their breakeven point in sales dollars?
a. $10,000
b. $12,500
c. $14,700
d. $14,286
3) Green T-Shirt Processing has a unit sales price of $20 for their t-shirt. The contribution margin percentage is 70%.
What is true of Green T-Shirt Processing’s breakeven point?
a. For each unit sold beyond the breakeven point, $14 of additional contribution margin is generated to help produce a profit
b. For each unit sold beyond the breakeven point, $6 of additional contribution margin is generated to help produce a profit
c. Their contribution margin is $6, if they lower prices, they will breakeven
d. None of the above
4) Green T-Shirt Processing has a unit sales price of $20 for their t-shirt. The contribution margin percentage is 70%.
Green T-Shirt Processing incurs only fixed and variable costs in its operations. When 10,000 T-shirts are produced, the company’s managerial accountant noted a fixed cost per shirt of $1.00 and a variable cost per pot of $6.00.
If production is expected to increase, which of the following statements is true?
a. The fixed cost per T-shirt will not change; the variable cost per T-shirt will decrease.
b. Total fixed costs will decrease; the variable cost per T-shirt will not change.
c. The fixed cost per T-shirt will decrease; the variable cost per T-shirt will increase.
d. Total fixed costs will remain unchanged; total variable costs will increase.
In: Accounting
ABC Company has a before-tax cost of debt of 5.94%. The cost of equity of an unlevered firm (Note: cost of equity of unlevered firm = return on assets = cost of capital of the firm's assets = RA) is 17.14%. The D/E ratio is 1.13. What is the cost of equity? Assume a tax rate of 27.4%. Enter your answer as a percentage rounded off to two decimal points. Do not enter % in the answer box.
In: Finance
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displayed below.]
Washington County’s Board of Representatives is considering the construction of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Data pertinent to the board’s decision appear below.
| Cost of acquiring additional land for runway | $ | 63,000 | |
| Cost of runway construction | 305,000 | ||
| Cost of extending perimeter fence | 19,880 | ||
| Cost of runway lights | 32,000 | ||
| Annual cost of maintaining new runway | 16,000 | ||
| Annual incremental revenue from landing fees | 25,000 | ||
In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway will require a new snowplow, which will cost $115,000. The old snowplow could be sold now for $11,500. The new, larger plow will cost $7,000 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway, and the major jet service it will bring to the county, will increase economic activity in the community. The board projects that the increased economic activity will result in $76,000 per year in additional tax revenue for the county.
In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county’s hurdle rate for capital projects is 10 percent.
Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.)
Required:
1. Prepare a net-present-value analysis of the proposed long runway.
2. Should the County Board of Representatives approve the runway considering NPV?
3-a. Which of the data used in the analysis are likely to be most uncertain?
3-b. Which of the data used in the analysis are likely to be least uncertain?
Prepare a net-present-value analysis of the proposed long runway. (Round your "Annuity discount factor" to 3 decimal places. Negative amounts should be indicated by a minus sign.)
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In: Accounting
Describe the financial crisis of the 2000s. In your opinion, is a similar crisis possible in the near future?
In: Accounting
what safety precautions should be taken when using a torch inside or near a building
In: Mechanical Engineering
Why is the investigation of near-misses important
although they do not cause any damage or
injury?
In: Civil Engineering
Whether coal fired power stations are economically viable and has requested that you analyse and report on the economic viability of a new ultra super critical (USC) coal fired power station to be built . Specific details of the task are provided below.
Task:
You are to provide a detailed financial analysis of an USC coal fired power station under two scenarios used in the Finkel Review (2017). The scenarios are:
|
1. |
Business as Usual (BaU) |
The electricity market remains in a prolonged period of uncertainty due to limited government action on carbon pricing and abatement. The price of electricity is higher under this scenario. |
|
2. |
Emission Intensity Scheme (EIS) |
Government to introduce an EIS where electricity generators that emit more than 600 kilograms of carbon per megawatt hour (MWh) of electricity must purchase carbon permits while those that emit less receive permits that they can sell. Permits will need to be purchased for the USC coal fired power station. The electricity price is lower under this scenario. |
Detailed information on the life, capital outlay, revenues,
expenses and related information is provided in the ‘USC
Information.xlsx’ file. The financial analysis is to be completed
in Excel with the file being easily adjustable for different
scenarios
| General Information | Detail | Units | Notes |
| Construction time | 4 | years | Spread evenly over years of construction with outlay for each year occurring at the start of given year. Initial outlay at 2019. |
| Years of construction | 2019-2022 | ||
| Life after construction | 35 | years | After plant is complete. |
| Output | 743 | MW | Mega Watt (MW) is an instantaneous output. So at full output for 1 hour, the plant is said to produce 743MW hours (MWh). Total output for year = MWh x 24 x 365 x Available Capacity Factor |
| Emissions | 0.7 | t of C02-e/MWh | |
| Capital cost | 3076000 | $/MW | Note: Total Outlay = Output x Capital Cost per MW |
| Cost of fuel (black coal) | 2.25 | $/GJ | Average from Graph |
| Heat rate | 8.85 | GJ/MWh | |
| Variable fuel operating costs | 19.91 | $/MWh | VC = $/GJ x Heat Rate. |
| Variable non-fuel operating cost | 1.60 | $/MWh | |
| Fixed operating cost | 87000.00 | $/MW/year | Note: Total Fixed Operating Costs = Output x Fixed Operating Cost per MW |
| Schedule maintenance | 2.00 | Weeks p.a. | |
| Effective outage rate | 5.00% | p.a. | |
| Available capacity factor | 91.15% | p.a. | (52-Maintenance Weeks)/52 - Outage Rate |
| Coal inventory days | 60 | days | Coal is stored on site |
| Coal inventory | 213,04,782 | $ | |
| Spare parts inventory | 20,00,000 | $ | |
| Working capital | 233,04,782 | $ | Initial working capital investment occurs at the beginning of first full year of operations. |
| Depreciation | Straight-Line | Straight-line over operating life (life after construction) | |
| Salvage | - | $ | Assumed $0 due to costs of demolition |
| Site rectification | 1000,00,000 | $ | |
| Tax | 30% | Paid the year of income | |
| Business as Usual (BaU) information | |||
| Price of electricity under BaU | 85 | $/MWh | Average from Graph |
| Cost of capital under BaU | 10.0% | p.a. | |
| Emission Intensity Scheme (EIS) information | |||
| Price of electricity under EIS | 72 | $/MWh | Average from Graph |
| Cost of capital under EIS | 10.0% | ||
| EIS baseline | 0.6 | t of C02-e/MWh | Permits earned for year = Total Annual Output MWh x (EIS baseline - Emission per MWh) |
| Price per EIS permit first year production (2023) | 17.71 | $/permit | Price of EIS permit is in first year of production as it takes 4 years to build power station (2019-2022) |
| EIS certificate annual compounded growth | 5.7% | p.a. | Compounded growth |
| Additional Values | |||
| Hours | 24.0 | per day | |
| Days | 365.0 | per year |
In: Finance
Bargains, Inc. manufactures and markets toys. Selected income statement data from 2010 and 2009 appear below:
|
Bargains, Inc. |
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Selected Income Statement data |
||||
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Fiscal year end |
12/31/2010 |
12/31/2009 |
||
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(amounts in thousands of dollars) |
||||
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Net sales |
$5,320,185 |
$4,980,000 |
||
|
Cost of Goods Sold |
-3,520,415 |
-3,340,290 |
||
|
Gross profit |
1,799,770 |
1,639,710 |
||
Required:
|
a. |
An analyst can sometimes estimate the variable cost as a percentage of sales for a particular cost by dividing the amount of the change in the cost item between two years by the amount of the change in sales for those two years. The analyst can then multiply the variable cost percentage times sales to determine the total variable cost. Subtracting the variable cost yields the fixed cost for that particular item. Follow this procedure to determine the cost structure for costs of goods sold for Bargains, Inc. |
|
b. |
Bargains, Inc. projects sales to grow at the following percentages in future years: 2011, 10percent; 2012, 12 percent; 2013, 16 percent. Using this information, project sales, cost of goods sold and gross profit for Bargains, Inc. for 2011 to 2013. |
In: Finance
2015
January 1 $1,000,000
March 1 $600,000
June 30 $800,000
September 30 $750,000
December 1 $600,000
2016
March 31 $800,000
June 30 $450,000 (final payment)
Total payments $5,000,000
On January 1, 2015 Costco obtained a $3 million dollar construction loan with a 5% interest rate. Costco’s other long-term debt consisted of $30 million 6% bonds and $20 million of 8% bonds. All debt was outstanding throughout 2015 and 2016.
In: Accounting
ABC COMPANY
Products: Producing heating equipment for the construction industry in Turkey.
Manufacturing: Computerized production are used for manufacturing. Manufacturing process is dominated by robots and there is a small team of engineers and technicians monitor the process and intervene if necessary.
Customers: Customers are the construction firms in Turkey. They are looking for new and innovative products, which can be input for low-cost, efficient and user-friendly buildings and facilities.
Environment: Number of competitors is increasing, and big companies want to enter the market. Sales teams of the competitors develop strong relationships with the customers through offering them new products.
It is said that main supplier will make an agreement with a competitor, and will produce for only that competitor in the next year. As there is no alternative for the main supplier in terms of product quality and price, ABC faces a serious problem.
In: Operations Management