Question 3 (Marks: 14)  

Q.3.2 Resonant Holdings owns a commercial shipping fleet and is in the process of refitting a container ship that was bought from a previous owner. They took ownership on 1 June 2020 and anticipate that it will take twelve months to complete the refurbishment at a total cost of R15 million.
One third of the project cost is to be financed by a specific loan at an interest rate of 6.5% and the balance will be financed from two general sources, namely debentures worth R10 million at an interest rate of 7.25% and a revolving loan costing 7%, also worth R10 million.  

The company expects to make three payments to the ship builders during the year as follows:

• R4 000 000 on 1 June 2020
• R5 000 000 on 1 October 2020
• A final payment of R6 000 000 on 1 April 2021

Required:

Calculate the borrowing costs that Resonant Holdings will capitalise for the year ended 31 May 2021. (14)

Question 3 (Marks: 14) Q.3.2 Resonant Holdings owns a commercial shipping fleet and is in the process of refitting a container ship that was bought from a previous owner. They took ownership on 1 June 2020 and anticipate that it will take twelve months to complete the refurbishment at a total cost of R15 million. One third of the project cost is to be financed by a specific loan at an interest rate of 6.5% and the balance will be financed from two general sources, namely debentures worth R10 million at an interest rate of 7.25% and a revolving loan costing 7%, also worth R10 million. The company expects to make three payments to the ship builders during the year as follows: R4 000 000 on 1 June 2020 R5 000 000 on 1 October 2020 A final payment of R6 000 000 on 1 April 2021 Required: Calculate the borrowing costs that Resonant Holdings will capitalise for the year ended 31 May 2021. (14)

On January 1, 2020, the Accumulated Depreciation—Machinery account of Astros Company showed a balance of $370,000. At the end of 2020, after the adjusting entries were posted, it showed a balance of $395,000. During 2020, one of the machines which cost $125,000 was sold for $60,500 cash. This resulted in a loss of $4,000. Assuming that no other assets were disposed of during the year, how much was depreciation expense for 2020?

On January 1, 2020, Tom Company is considering purchasing a 35 percent ownership interest in Jerry Company, a privately held enterprise, for $900,000. Jerry predicts its profit will be $250,000 in 2020, projects a 3% annual increase in profits (from one year to the next) in each of the next four years, and expects to pay a steady annual dividend of $20,000 for the foreseeable future. Jerry has on its books a patent that is undervalued by $120,000, and has an estimated remaining useful life of 6 years. All of Jerry’s other assets and liabilities have book values that approximate market values. Tom uses the equity method for its investment in Jerry.

Need a schedule in Excel for the years 2020 through 2024 to display the following:

1. Tom’s equity in Jerry earnings with rows showing these:
   1. Tom’s share of Jerry reported income
   2. Amortization expense
   3. Tom’s equity in Jerry earnings
2. Tom’s Investment in Jerry balance with rows showing the following:
   1. Beginning balance
   2. Equity earnings
   3. Dividends
   4. Ending balance

Concord Cosmetic Inc. (ACI), a cosmetic product manufacturer, is a publicly listed company. ACI is preparing earnings per share data for 2020. The following is a summary of the activity for ACI during 2020:

Required: weighted average number of shares outstanding for the year ended December 31, 2020.

The enrollments of the 13 public universities in the state of Ohio are listed below. College Enrollment University of Akron 26,106 Bowling Green State University 18,864 Central State University 1,718 University of Cincinnati 44,354 Cleveland State University 17,194 Kent State University 41,444 Miami University 23,902 Ohio State University 62,278 Ohio University 36,493 Shawnee State University 4,230 University of Toledo 20,595 Wright State University 17,460 Youngstown State University 12,512 (Round "Mean" and "Standard deviation" to the nearest whole number.) Click here for the Excel Data File Is this a sample or a population? Sample Population What is the mean enrollment? What is the median enrollment? What is the range of the enrollments? Compute the standard deviation.

Company X is a U.S.-based IT company with operations and earnings in a number of foreign countries. The company's profits by subsidiary, in local currency (in millions), are shown in the following table for 2019 and 2020.

     Net Income           Japanese Subsidiary       Britih Subsidiary

2019                   JPY 200                            GBP 100.00

2020                   JPY 1,480                         GBP 108.40

The average exchange rate for each year, by currency pairs, is the following.

Exchange Rate      JPY = 1 USD                 USD = 1 GBP

      2019                     97.57                               1.5646

      2020                      90.88                               1.6473

Use the above data, Students answer the following questions.

1. What is Company X's consolidated profits in U.S. dollars in 2019 and 2020?

2. If the same exchange rates are used for both years, what is the change in corporate earnings on a "constant currency" basis?   

Using the results of the constant currency analysis in part b, is it possible to separate Company X's growth in earnings between local currency earnings and foreign exchange rate impacts on a consolidated basis?           

Case Analysis 2: The CEO of Dynamic Manufacturing was at a conference and talked to a supplier about a new piece of equipment for its production process that she believes will produce ongoing cost savings. As the Operations Manager, your CEO has asked for your perspective on whether or not to purchase the machinery. After talking to the supplier and meeting with your Engineers and Financial Analysts, you’ve gathered the following pieces of data:

• Cost of Machine: $140,000

• Estimated Annual After Tax Cash Flow Savings: $60,000 (which may or may not grow)

• Estimated machinery life: 3-5 years (after which there will be zero value for the equipment and no further cost savings)

• You seem to recall that Dynamic’s Finance organization recommends either a 10% or a 15% discount rate for all Cost Savings Projects.

Calculate the Nominal Payback, the Discounted Payback, the Net Present Value and the IRR for each scenario, assuming:

A. Ann recommends using the base assumptions above: 3 year project life, flat annual savings, 10% discount rate.

B. Bob recommends savings that grow each year: 3 year project life, 10% discount rate and a 10% compounded annual savings growth in years 2 & 3. In other words, instead of assuming savings stay flat, assume that they will grow by 10% in year 2, and then grow another 10% in year 3.

C. Cassidy believes we use a higher Discount Rate because of the risk of this type of project: 3 year project life, flat annual savings, 15% discount rate.

D. David is convinced the machine will last longer than 3 years. He recommends using a 5 Year Equipment Life: 5 year project and savings life, flat annual savings, 10% discount rate. In other words, assume that the machine will last 2 more years and deliver 2 more years of savings.

1) Which person’s scenario would you present to management and why? From a strictly financial (numbers) perspective, would you recommend this purchase to management?

2) In your opinion, which person’s scenario is based on the most aggressive assumptions? If you were to select this scenario as the basis for your proposal, how would you justify the more aggressive assumptions?

3) In SIMPLE English (as in talking to a non-Finance and non-MBA person), explain why there is value to management in running all 4 of these scenarios.

4) Beyond financial measures, what other factors would you want to consider, before making a recommendation to management? 5) If you were the CEO, would you approve this proposal? Why or why not?

***I'd appreciate if this could be broken down step by step for me, I'm having a hard time understanding where I'm going wrong with this question, thank you.

You are the nurse manager of an outpatient medical clinic. Your patients are diagnosed with heart failure. You have noticed that recently, patients have seemed unhappy with the care they receive in your office. You want to design a quality improvement project to increase patient satisfaction with their office visit. You do not know specifically why patients are unhappy.

You will create a plan to gather information to help you understand why patients are unhappy with their care. Please do the following:

I. Choose a method that you will use from this list. Explain why you choose this method.

                1. Written survey

                                a. Questionnaire that the patient will complete at the end of the visit

b. Questionnaire that staff will read to the patient in a telephone interview one week after the visit.

                2. Interview

                                a. A focus group of patients

b. One-to-one interview with the patient using open-ended questions that will take place after the visit.                      

II. Whichever method you choose, write an introduction to the patient

III. Write the questions you will have the patient answer – Be sure the questions are specific and will get you the most information you need to decide what the problem is at your office.

Use the above (I, II, III) sections to divide the content of your paper. Each section must have complete information.