Garnet, Inc., has a target debt-equity ratio of 0.59. Its WACC is 11.4 %, and the tax rate is 36 %

If you know that the after-tax cost of debt is 6.5%, what is the cost of equity? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations).

If the estimated lifetime benefit of a system is $870,000 and the estimated lifetime cost of the system is $550,000.

1. What is the estimated lifetime Return On Investment (ROI)?

(First, state the formula).

2. What is the annual percentage of the ROI if the estimated cost/benefit is for 4 years duration?

    c.      What is the real annual cash value of the system?

Companies can use three strategies to lower their breakeven point: 1. Increase selling price; 2. Decrease variable costs; 3. Decrease fixed costs. Thinking in terms of cost structure and breakeven point, explain how a movie theater might respond to a negative demand shock (a sudden significant drop in demand as a result of external events) such as happened after the September 11^th attack on the World Trade Center, Superstorm Sandy, etc.

• Your answer must specifically address each of the three strategies outlined above, and assess whether or not that strategy would be successful. (6 points)
  • BE SPECIFIC. You must indicate exactly how you would raise selling price or which specific variable/fixed costs you are recommending that the company decrease. While you may look at online sources to learn more about the industry, DO NOT copy information without providing proper citations. Also, you must include original information; do not rely solely on online sources.
• Finally, you must make a recommendation as to the best strategy, explaining why you chose it.

Beginning goods in process inventory (March 31)

Units of product                                                                                                    30,000 units

Percentage of completion – Direct materials                                                      100%

Percentage of completion – Direct labor                                               65%

Direct materials costs                                                                                           $4,300

Direct labor costs                                                                                                  $ 700

Factory overhead costs applied                                                         $ 920

Activities during the current period (April)

Units started this period                                                                                      90,000 units

Units transferred out (completed)                                                                        100,000 units

Direct materials costs                                                                                           $ 12,900

Direct labor costs                                                                                                  $   6,700

Factory overhead costs applied                                                         $   7,680

Ending goods in process inventory (April 30)

Units of product                                                                                                    20,000

Percentage of completion – Direct materials                                                         100%

Percentage of completion – Direct labor                                                25%

Process Cost Summary

Weighted Average

Cost Charged to Production

Costs of beginning goods in process

     Direct Materials

     Direct Labor

     Factory Overhead

Costs incurred this period

     Direct materials

     Direct Labor

     Factory Overhead

Total costs to account for

Unit Cost Information

Units to accounts for:                                                                                            Units accounted for:

Beginning goods in process                                                                                   Completed and transferred out

Units started this period                                                                                                        Ending goods in process

Total units to account for                                                                                                       Total units accounted for

                                                                                                            Direct                        Direct                          Factory

Equivalents Units of Production (EUP)            Materials Labor                           Overhead

Units completed and transferred out

Units of ending goods in process

     Direct materials

     Direct labor

     Factory overhead

Equivalent units of production

                                                                                                            Direct                          Direct                          Factory

Cost per EUP                                                                                  Materials       Labor                           Overhead

Costs of beginning goods in process

Costs incurred this period

Total costs

/EUP

Cost per EUP

Cost Assignment and Reconciliation

Costs transferred out (COGM)

     Direct materials

     Direct labor

     Factory overhead

Costs of ending goods in process

     Direct materials

     Direct labor

     Factory overhead

Total costs accounted for

1. What is the equivalent units of production for direct materials?

2. What is the equivalent units of production for direct labor?

3. What is the equivalent units of production for factory overhead?

4. What is the cost per equivalent unit of production (4 decimals) for direct materials?

5. What is the cost per equivalent unit of production (4 decimals) for direct labor?

6. What is the cost per equivalent unit of production for factory overhead?

7. What is the cost of goods manufactured?

8. What is the cost of ending goods in process?

hau lee furniture inc spends 45% of its sales dollars in the supply chain and finds its current profit of $35000 inadequate. the bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Hau would like to improve the profit line to $40,000 so he can obtain the bankks approval for the loan. Sales- $100,000 Cost of Materials- $45,000 (45%) Production Costs $15,000 (15%) Fixed Cost $5,000 (5%) Profit $35,000 (35%) What percentage improvement is needed in the supply chain strategy for profit to improve to $40,000? What is the cost of material with a $40,000 profit? A decrease od _____% in material (supply chain) costs is required to yeild a profit of $40,000 for a new material cost of $______ What percentage improvement is needed in the Sales strategy for profit to improve to $40,000? What must sales be for profit to improve to $40,000? An increase of ____% in sales is required to yeild a profit of $40,000 for a new level of sales of $______

The number of defects after a hotel room cleaning (sheets not straight, smears on mirror, missed debris on carpet, fresh towels not folded, etc.) should be measured using what type of process control chart?

Modern Visionary Hotel Chain has $1,000 face value bonds outstanding. These bonds pay interest semiannually, mature in six years, and have a 5 percent coupon. The annual yield to maturity is 12.6%. What is the bonds current price? (round to the nearest penny)

N:

I:

PV:

PMT:

FV:

1. Indicate on a graph of the circular flow model, the real or money flow in which the following items belong:

• You pay your tuition.
• The University of Texas buys some Dell computers.
• A student works at FedEx Kinko’s.
• Donald Trump rents a Manhattan building to a hotel.
• You pay your income tax.

A geographer and social worker are teaming up to investigate whether population density, average distance to a large grocery store, and proportion of park/playground area has an impact on community ‘wellness’. What will these researchers need to do to measure wellness? Why? Use research/statistical terms covered in this course in your explanation.

Where do you want to go? Mountains? Ocean?... What do you want to see? Landscapes? Wildlife? What do you want to do? Hiking? Biking Kayaking?.. Where do you want to sleep? In a hotel in a tent?... How long do you want to stay? A day? A week?