ABC Ltd. has revenue of N$500 million and sells all of its goods on
credit to a variety of different wholesale customers. At the moment
the company offers a standard credit period of 30 days. However,
70% of its customers (by revenue) take an average of 70 days to
pay, while the other 30% of customers (by revenue) pay within 30
days. The company is considering offering a 2% discount for payment
within 30 days and estimates that 80% of customers (by revenue)
will take up this offer (including those that already pay within 30
days).
The Managing Director has asked the credit controller if the cost
of this new policy would be worth offering. The company has a £80
million overdraft facility that it regularly uses to the full limit
due to the lateness of payment and the cost of this overdraft
facility is 15% per annum.
The credit controller also estimates that bad debt level of 2% of
revenue would be halved to 1% of revenue as a result of this new
policy.
Required
1. Calculate the approximate equivalent annual percentage cost
of a discount of 2%, which reduces the time taken by credit
customers to pay from 70 days to 30 days.
2. Calculate the value of trade receivables under the existing
scheme and the proposed scheme at the year-end.
3. Evaluate the benefits and costs of the scheme and explain with
reasons whether the company should go ahead and offer the discount.
You should also consider other factors in this decision. (Hint: You
need to work out the cost of the discount compared to the interest
on the overdraft saved and bad debt reduction.)
In: Finance
1.
Vertical Analysis of Income Statement
Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:
| Current Year | Previous Year | |||
| Sales | $517,000 | $460,000 | ||
| Cost of goods sold | 284,350 | 230,000 | ||
| Selling expenses | 93,060 | 92,000 | ||
| Administrative expenses | 98,230 | 82,800 | ||
| Income tax expense | 15,510 | 23,000 | ||
a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.
| Innovation Quarter Inc. | ||||
| Comparative Income Statement | ||||
| For the Years Ended December 31 | ||||
| Current year Amount | Current year Percent | Previous year Amount | Previous year Percent | |
| Sales | $517,000 | % | $460,000 | % |
| Cost of goods sold | 284,350 | % | 230,000 | % |
| ________ | $ | % | $ | % |
| Selling expenses | 93,060 | % | 92,000 | % |
| Administrative expenses | 98,230 | % | 82,800 | % |
| ___________ | $ | % | $ | % |
| ___________ | % | % | ||
| Income tax expense | 15,510 | % | 23,000 | % |
| ___________ | $ | % | $ | % |
b. The vertical analysis indicates that the cost of goods sold as a percent of sales __________ by 5 percentage points, while selling expenses ____________ by 2 percentage points, and administrative expenses ___________ by 1 percentage points. Thus, net income as a percent of sales ________ by 2 percentage points.
2.
Vertical Analysis of Balance Sheet
Balance sheet data for Alvarez Company on December 31, the end of two recent fiscal years, follows:
| Current Year | Previous Year | |||
| Current assets | $295,500 | $169,970 | ||
| Property, plant, and equipment | 591,000 | 546,860 | ||
| Intangible assets | 98,500 | 22,170 | ||
| Current liabilities | 187,150 | 110,850 | ||
| Long-term liabilities | 413,700 | 302,990 | ||
| Common stock | 108,350 | 110,850 | ||
| Retained earnings | 275,800 | 214,310 | ||
Prepare a comparative balance sheet for both years, stating each asset as a percent of total assets and each liability and stockholders' equity item as a percent of the total liabilities and stockholders' equity. If required, round percentages to one decimal place.
| Alvaraz Company | ||||
| Comparative Balance Sheet | ||||
| For the Years Ended December 31 | ||||
| Current year Amount |
Current year Percent |
Previous year Amount |
Previous year Percent |
|
| Current assets | $295,500 | __% | $169,970 | __% |
| Property, plant, and equipment | 591,000 | __% | 546,860 | __% |
| Intangible assets | 98,500 | __% | 22,170 | __% |
| Total assets | $985,000 | __% | $739,000 | __% |
| Current liabilities | $187,150 | __% | $110,850 | __% |
| Long-term liabilities | 413,700 | __% | 302,990 | __% |
| Common stock | 108,350 | __% | 110,850 | __% |
| Retained earnings | 275,800 | __% | 214,310 | __% |
| Total liabilities and stockholders' equity | $985,000 | __% | $739,000 | __% |
2.
Horizontal Analysis of the Income Statement
Income statement data for Winthrop Company for two recent years ended December 31, are as follows:
| Current Year | Previous Year | ||||
| Sales | $702,000 | $540,000 | |||
| Cost of goods sold | 588,800 | 460,000 | |||
| Gross profit | $113,200 | $80,000 | |||
| Selling expenses | $33,600 | $28,000 | |||
| Administrative expenses | 30,720 | 24,000 | |||
| Total operating expenses | $64,320 | $52,000 | |||
| Income before income tax | $48,880 | $28,000 | |||
| Income tax expenses | 19,600 | 11,200 | |||
| Net income | $29,280 | $16,800 | |||
a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place.
| Winthrop Company | ||||
| Comparative Income Statement | ||||
| For the Years Ended December 31 | ||||
| Current year Amount |
Previous year Amount |
Increase (Decrease) Amount |
Increase (Decrease) Percent |
|
| Sales | $702,000 | $540,000 | $ | % |
| Cost of goods sold | 588,800 | 460,000 | % | |
| Gross profit | $113,200 | $80,000 | $ | % |
| Selling expenses | $33,600 | $28,000 | $ | % |
| Administrative expenses | 30,720 | 24,000 | % | |
| Total operating expenses | $64,320 | $52,000 | $ | % |
| Income before income tax | $48,880 | $28,000 | $ | % |
| Income tax expense | 19,600 | 11,200 | % | |
| Net income | $29,280 | $16,800 | $ | % |
b. The net income for Winthrop Company increased between years. This increase was the combined result of an ______ in sales and _____ percentage _____ in cost of goods sold. The cost of goods sold increased at a ______ rate than the increase in sales, thus causing the percentage increase in gross profit to be ______ than the percentage increase in sales.
In: Accounting
Which of the following is NOT an assumption of the traditional economic order quantity (EOQ) model?
a. Holding and ordering costs are stable and known.
b. Demand is constant and known.
c. Supply lead time is constant and known.
d. Quantity discounts are possible.
Kim’s Nail Salon uses a weighted moving average method to forecast demand. She assigns a weight of 5 to the previous month’s demand, 3 to demand two months ago, and 2 to demand three months ago. If demand was 800 customers in April, 900 customers in May, 1,200 customers in June, and 2,000 customers in July, what should her forecast for August be?
a. 1,540
b. 910
c. 1,400
d. 1,210
Statewide Insurers receives 600 applications per month. Currently, there are 60 applications in the Reception area and 140 applications with the Underwriting team. How long does Receiving take to process an application? Assume that there are 20 working days per month.
a. 2 days
b. 3 days
c. 7 days
d. 10 days
Based on experience, the manager at the Giraffe Hotel decides to accept a reservation for a party of 12 guests knowing that his hotel is sold out. He is accepting the reservation because:
a. he can cancel the reservations of the 12 lowest-paying guests and get more revenue from the new guests
b. he can make arrangements with the neighboring hotel to accept the 12 guests
c. he is using overbooking techniques and has determined that he can safely accept the 12 guests
d. he knows he will have 6 cancellations and 6 no-shows among the current reservations
A manufacturing firm finds a location using the center of gravity method but rejects that location because they are unable to efficiently transport the finished goods to market. The firm’s action illustrates the link between __________ and location.
a. proximity
b. clustering
c. infrastructure
d. globalization
In: Other
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In: Accounting
In C++
All guests in ABC Hotel are either Elite members (meaning they get a free breakfast) or Standard members (meaning they do not get a free breakfast). They collect points for every stay-Elite members earn 100 points for every day stayed in the hotel (so 2 days would be 200 points) and Standard member earns 50 points for every stay (so 3 days would be 140 points). Once 1000 points are reached, guests get a free stay. Guest details are kept in a file:
Sample input file1: Augustus, E-300,200, eggs//customer name, Membership level (E means elite), item ordered, ID number, points, breakfast choice
Sample input file2: Cyrus, S-100,30,x//customer name, Membership level(S means standard), item ordered, ID number, points, breakfast choice
1.The program should read in the number of points to get a free stay (1000) from the command line. It should continuously read in files of guests until the exit is entered (meaning the user can keep typing in file names-note that you can type in the same file name to open a previous guest).
2.Every time a file is opened, the program should ask how many days the guest is staying and award the appropriate number of points based on the membership level. The new point total should be saved in the file. If they are an elite member, they have the chance to change their breakfast choice.
3.When exiting, a file should be output with the number of guests that got a free stay (meaning their total points were 1000 or greater)
Sample output file:
Augustus had a free stay.
Jane had a free stay.
4.You should make a Hotel class and an abstract Person class. You should also make additional classes as necessary.
In: Computer Science
Your BANA II professor is going on vacation. He has narrowed down a list of potential hotels, but he is still overwhelmed by the data. He loves great food and wants to do all the activities at the resort. Refer to the attached Excel workbook to complete the following 2 questions: 1. Develop two unique ways to display the data (two unique types of charts) to show him where he should stay. Save the graphs in the Blackboard Midterm Tab. Make sure to label and describe the data in the chart. Be creative and impress your professor. 2. Recommend the best way to present the data. Write a narrative summary of what hotel you recommend based on the data visualization and the tradeoffs that you observe.
| Hotel | Overall | Comfort | Amenities | In-House Dining |
| Muri Beach Odyssey | 94.3 | 94.5 | 90.8 | 97.7 |
| Pattaya Resort | 92.9 | 96.6 | 84.1 | 96.6 |
| Sojourner’s Respite | 92.8 | 99.9 | 100 | 88.4 |
| Spa Carribe | 91.2 | 88.5 | 94.7 | 97 |
| Penang Resort and Spa | 90.4 | 95 | 87.8 | 91.1 |
| Mokihana Hōkele | 90.2 | 92.4 | 82 | 98.7 |
| Theo’s of Cape Town | 90.1 | 95.9 | 86.2 | 91.9 |
| Cap d’Agde Resort | 89.8 | 92.5 | 92.5 | 88.8 |
| Spirit of Mykonos | 89.3 | 94.6 | 85.8 | 90.7 |
| Turismo del Mar | 89.1 | 90.5 | 83.2 | 90.4 |
| Hotel Iguana | 89.1 | 90.8 | 81.9 | 88.5 |
| Sidi Abdel Rahman Palace | 89 | 93 | 93 | 89.6 |
| Sainte-Maxime Quarters | 88.6 | 92.5 | 78.2 | 91.2 |
| Rotorua Inn | 87.1 | 93 | 91.6 | 73.5 |
| Club Lapu-Lapu | 87.1 | 90.9 | 74.9 | 89.6 |
| Terracina Retreat | 86.5 | 94.3 | 78 | 91.5 |
| Hacienda Punta Barco | 86.1 | 95.4 | 77.3 | 90.8 |
| Rendezvous Kolocep | 86 | 94.8 | 76.4 | 91.4 |
| Cabo de Gata Vista | 86 | 92 | 72.2 | 89.2 |
| Sanya Deluxe | 85.1 | 93.4 | 77.3 | 91.8 |
In: Statistics and Probability
Task: For each of the scenarios below, choose the strategy that you believe should be pursued to achieve the best results, and provide a brief explanation of why you believe this is the best strategy.
Choose from theses 5 Generic Strategies : 1. Low-Cost Provider Strategy 2. Broad Differentiation Strategy 3. Focused Low-Cost Strategy 4. Focused Differentiation Strategy 5. Best-Cost Provider Strategy
Scenarios: 1. A new waterfront development project is beginning in a medium-size city. This project will include moderate to higher-end shopping, restaurants, and hotels. Some of these businesses include: Pottery Barn, Ann Taylor, an Apple Store, Sasha’s Dress Boutique, Apostrophe, Bose, Calvin Klein, Cheesecake Factory, Capital Grille, Maggiano’s, the Marriott, and the Westin. The spaces will include a mixture of national chains, and local businesses. The project and the city have been highlighted in national papers for the expected success of the project and renewed attraction to the city. The Sully Hospitality group is determining if they want to open a boutique hotel in this area. What strategy should Sully adopt to develop the type of boutique hotel would best- fit this project? Provide a brief explanation.
2. A new shopping center is being developed – the main anchors are Wal-Mart and Home Depot. The other parcels will include smaller establishments of fast-food and other convenience category businesses. McDonald’s is interested in this project but has to determine how they would approach this location. The options are: 1. Put a McDonald’s Express inside the Wal-Mart 2. Purchase an out-parcel at the front of the project with high traffic volume and build a traditional McDonald’s 3. Purchase an out-parcel at the front of the project with high traffic volume and build a McCafe Which generic strategy should be McDonald’s use to guide this decision? Based on the generic strategy that you believe is most appropriate for this scenario, which option should McDonald’s choose? Provide a brief explanation.
3. The airline industry has seen various players attempt all of the generic strategies. Given the current state of the airline industry and the main surviving airlines, if a company wanted to get into this industry right now, which strategy would promote the best chances for success? Provide a brief explanation.
4. The top five selling brands of tablets in the world are: 5. Acer, 4. Dell, 3. Sony Vaio, 2. Lenovo, and 1. Apple. A new start-up company wants to break into the tablet market; what generic strategy should they adopt? Provide a brief explanation.
In: Operations Management
Spencer Grant and Vaniteux (A). Spencer Grant is a New York-based investor. He has been closely following his investment in 500 shares of Vaniteux, a French firm that went public in February 2010. When he purchased his 500 shares at €17.83 per share, the euro was trading at $1.3699/€. Currently, the share is trading a €29.02 per share, and the dollar has fallen to $1.4176/€.
a. If Spencer sells his shares today, what percentage change in the share price would he receive?
The shareholder return is ---- %. (Round to two decimal places.)
b. What is the percentage change in the value of the euro versus the dollar over this same period?
The percentage change in the value of the euro versus the dollar is ---- %. (Round to two decimal places.)
c. What would be the total return Spencer would earn on his shares if he sold them at these rates?
C. a. If he sold his shares today, it would yield the following amount in euros € ----. (Round to two decimal places.)
b. The sales proceeds in U.S. dollars is $ ---- . (Round to the nearest cent.)
c. The original investment (cost) of 500 shares in Vaniteux in euros is € ----.(Round to two decimal places.)
d. The original investment (cost) of shares in U.S. dollars, calculated at the original spot rate is $---- (Round to the nearest cent.)
In: Finance
Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only to department B (they have no outside sales).
The income statement for Marley's Manufacturing is shown below:
| Marley's Manufacturing Income Statement Month Ending August 31, 2018 |
||||
| Dept. A | Dept. B | |||
| Sales | $21,000 | $52,000 | ||
| Cost of goods sold | 10,080 | 27,040 | ||
| Gross profit | $10,920 | $24,960 | ||
| Utility expenses | 1,050 | 3,120 | ||
| Wages expense | 5,250 | 10,920 | ||
| Costs allocated from corporate | 2,310 | 15,080 | ||
| Total expenses | $8,610 | $29,120 | ||
| Operating income/(loss) in dollars | $2,310 | -$4,160 | ||
| Operating income/(loss) in percentage | 11 | % | -8 | % |
Assume the market price for the items your department purchase is 15% below what you are being charged by department A of Marley’s Manufacturing.
Determine the operating income for department B, assuming department A “sold” department B 1,000 units during the month and department A reduces the selling price to the market price. Round your percentage answer to one decimal place.
| New operating income/(loss) for department B in dollars | ||
| New operating income/(loss) for department B in percentage |
In: Accounting
|
Greenwood Company manufactures two products—13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: |
|
Activity Cost Pool |
Activity Measure |
Estimated Overhead Cost |
Expected Activity |
||
|
Machining |
Machine-hours |
$ |
249,600 |
12,000 |
MHs |
|
Machine setups |
Number of setups |
$ |
162,400 |
280 |
setups |
|
Production design |
Number of products |
$ |
92,000 |
2 |
products |
|
General factory |
Direct labor-hours |
$ |
309,600 |
12,000 |
DLHs |
|
Activity Measure |
Product Y |
Product Z |
||
|
Machining |
7,800 |
4,200 |
||
|
Number of setups |
40 |
240 |
||
|
Number of products |
1 |
1 |
||
|
Direct labor-hours |
8,800 |
3,200 |
||
|
1. |
What is the company’s plantwide overhead rate? (Round your answer to 2 decimal places.) Predetermined overhead rate_____ per DLH |
|||
|
Manufacturing overhead allocated: Product Y _______ Product Z____________
|
In: Accounting