Bilboa Freightlines, S.A., of Panama, has a small truck that it uses for intracity deliveries. The truck is worn out and must be either overhauled or replaced with a new truck. The company has assembled the following information:
| Present Truck |
New Truck |
|||||
| Purchase cost (new) | $ | 24,000 | $ | 27,000 | ||
| Remaining book value | $ | 8,000 | ||||
| Overhaul needed now | $ | 7,000 | ||||
| Annual cash operating costs | $ | 11,000 | $ | 6,000 | ||
| Salvage value-now | $ | 3,000 | ||||
| Salvage value-five years from now | $ | 2,000 | $ | 5,000 | ||
If the company keeps and overhauls its present delivery truck, then the truck will be usable for five more years. If a new truck is purchased, it will be used for five years, after which it will be traded in on another truck. The new truck would be diesel-operated, resulting in a substantial reduction in annual operating costs, as shown above.
The company computes depreciation on a straight-line basis. All investment projects are evaluated using a 18% discount rate.
1. What is the net present value of the “keep the old truck” alternative?
2. What is the net present value of the “purchase the new truck” alternative?
3. Should Bilboa Freightlines keep the old truck or purchase the new one?
In: Accounting
1) Find a company whose ticker symbol contains your initials. (For example if your initials are: BK, then Bank of New York Mellon (BK) or Barnes and Noble (BKS) or Ambac Financial Group (ABK) would satisfy this requirement). If you cannot find any company with your initials, then use one of your initials (you choose which) twice. So if your initial are: SV, choose a company with either 2 S’s or 2 V’s in the ticker. If there is still no suitable company, then choose any company contained in the Dow Jones Industrial Average. 2) Obtain the financial statements for the three most recent years. Usually, the financial statements are in the company’s annual report, and are on, or can be downloaded from the company’s website, or 3) For the three most recent years, analyze the Du Pont identity for your chosen company. How has ROE changed over this period? How have changes in each component of the Du Pont identity affected ROE over this period? 4) Choose two competitors of the company you chose in parts 1,2 and 3. Analyze the Du Pont identity for the competitors (over the most recent three years). How does your company’s profitability compare to the two competitors? What conclusion, if any, can you make about the condition of your chosen company?
I chose Agilent Technologies but I couldnt post their financial statement here, please go to https://www.agilent.com/about/newsroom/presrel/2017/20nov-gp17023_print.html
# # #
| AGILENT TECHNOLOGIES, INC. | |||||||||||
| CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | |||||||||||
| (In millions, except per share amounts) | |||||||||||
| (Unaudited) | |||||||||||
| PRELIMINARY | |||||||||||
| Three Months Ended | |||||||||||
| October 31, | Percent | ||||||||||
| 2017 | 2016 | Inc/(Dec) | |||||||||
| Net revenue | $ | 1,189 | $ | 1,111 | 7 | % | |||||
| Costs and expenses: | |||||||||||
| Cost of products and services | 542 | 523 | 4 | % | |||||||
| Research and development | 89 | 84 | 6 | % | |||||||
| Selling, general and administrative | 325 | 321 | 1 | % | |||||||
| Total costs and expenses | 956 | 928 | 3 | % | |||||||
| Income from operations | 233 | 183 | 27 | % | |||||||
| Interest income | 7 | 3 | 133 | % | |||||||
| Interest expense | (20 | ) | (19 | ) | 5 | % | |||||
| Other income (expense), net | 6 | (16 | ) | — | |||||||
| Income before taxes | 226 | 151 | 50 | % | |||||||
| Provision for income taxes | 49 | 25 | 96 | % | |||||||
| Net income | $ | 177 | $ | 126 | 40 | % | |||||
| Net income per share: | |||||||||||
| Basic | $ | 0.55 | $ | 0.39 | |||||||
| Diluted | $ | 0.54 | $ | 0.38 | |||||||
| Weighted average shares used in computing net income per share: | |||||||||||
| Basic | 322 | 324 | |||||||||
| Diluted | 326 | 328 | |||||||||
| Cash dividends declared per common share | $ | 0.132 | $ | 0.115 | |||||||
| Years Ended | |||||||||||
| October 31, | Percent | ||||||||||
| 2017 | 2016 | Inc/(Dec) | |||||||||
| Net revenue | $ | 4,472 | $ | 4,202 | 6 | % | |||||
| Costs and expenses: | |||||||||||
| Cost of products and services | 2,063 | 2,005 | 3 | % | |||||||
| Research and development | 339 | 329 | 3 | % | |||||||
| Selling, general and administrative | 1,229 | 1,253 | (2 | %) | |||||||
| Total costs and expenses | 3,631 | 3,587 | 1 | % | |||||||
| Income from operations | 841 | 615 | 37 | % | |||||||
| Interest income | 22 | 11 | 100 | % | |||||||
| Interest expense | (79 | ) | (72 | ) | 10 | % | |||||
| Other income (expense), net | 19 | (10 | ) | — | |||||||
| Income before taxes | 803 | 544 | 48 | % | |||||||
| Provision for income taxes | 119 | 82 | 45 | % | |||||||
| Net income | $ | 684 | $ | 462 | 48 | % | |||||
| Net income per share: | |||||||||||
| Basic | $ | 2.12 | $ | 1.42 | |||||||
| Diluted | $ | 2.10 | $ | 1.40 | |||||||
| Weighted average shares used in computing net income per share: | |||||||||||
| Basic | 322 | 326 | |||||||||
| Diluted | 326 | 329 | |||||||||
| Cash dividends declared per common share | $ | 0.528 | $ | 0.460 | |||||||
In: Accounting
Thinking back to the “Practical Framework for Changing Behaviours” reading in module 1 (Health Communication Network, 2004), how do the constructs of the Health Belief Model and the Transtheoretical Model “fit” into the eight conditions that must be true for a person to perform that behavior?
In: Nursing
Thinking back to the “Practical Framework for Changing Behaviours” reading in module 1 (Health Communication Network, 2004), how do the constructs of the Health Belief Model and the Transtheoretical Model “fit” into the eight conditions that must be true for a person to perform that behavior?
In: Psychology
All other things being equal, the tax benefits of a tax credit
outweigh the tax savings produced by a tax deduction
because:
1) It reduces a taxpayer's tax liability
2) It reduces a taxpayer's taxable income
3) It reduces a taxpayer's capital gains
4) None of these
In 2019, what is the earned income credit allowed Don Andersen, a head of household taxpayer, assuming he has adjusted gross income of $9,500 (consisting of interest income of $3,500 and earned income of $6,000? He maintains his household with his daughter.
1) $2004
2) $2049
3) $2094
4) $0
5) None of the above answers are within $20 (plus or minus) of the correct answer.
In: Accounting
The Acme Company manufactures widgets. The distribution of
widget weights is bell-shaped. The widget weights have a mean of 60
ounces and a standard deviation of 7 ounces.
Use the Standard Deviation Rule, also known as the Empirical
Rule.
Suggestion: sketch the distribution in order to answer these
questions.
a) 95% of the widget weights lie between and
b) What percentage of the widget weights lie between 53 and 74
ounces? %
c) What percentage of the widget weights lie above 39
? %
In: Statistics and Probability
The Acme Company manufactures widgets. The distribution of
widget weights is bell-shaped. The widget weights have a mean of 64
ounces and a standard deviation of 5 ounces.
Use the Standard Deviation Rule, also known as the Empirical
Rule.
Suggestion: sketch the distribution in order to answer these
questions.
a) 95% of the widget weights lie between and
b) What percentage of the widget weights lie between 59 and 74
ounces? %
c) What percentage of the widget weights lie above 49 ?
In: Statistics and Probability
Williams & Sons last year reported sales of $74 million, cost of goods sold (COGS) of $60 and an inventory turnover ratio of 5. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 6 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Round your answer to the nearest dollar.
In: Finance
In: Accounting
Chapter 3 Problem to be completed with Excel
P3-1A On April 1, Wonder Travel Agency Inc. was established. These transactions were completed during the month. • 1.Stockholders invested $30,000 cash in the company in exchange for common stock. • 2.Paid $900 cash for April office rent. • 3.Purchased office equipment for $3,400 cash. • 4.Purchased $200 of advertising in the Chicago Tribune, on account. • 5.Paid $500 cash for office supplies. • 6.Performed services worth $12,000. Cash of $3,000 is received from customers, and the balance of $9,000 is billed to customers on account. • 7.Paid $400 cash dividend. • 8.Paid Chicago Tribune amount due in transaction (4). • 9.Paid employees' salaries $1,800. • 10.Received $9,000 in cash from customers billed previously in transaction (6). Instructions: Prepare a tabular analysis of the transactions using these column headings: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Common Stock, and Retained Earnings (with separate columns for Revenues, Expenses, and Dividends). Include margin explanations for any changes in Retained Earnings. Cash $34,800 Total assets $38,700
In: Accounting