Sugar Ltd was involved in the following transactions during 1 July 2019 to 30 June 2020 financial period.

1. On 5 November 2019 the directors of the company decided to raise extra capital by issuing 2 million ordinary shares publicly at a price of $2 each share. The company received application monies of $4,800,000 for 2.4 million shares on 30 November.
2. The company decided to allot shares to applicants on the basis of 10 shares for every 12 shares applied for on 30 December.
3. On 30 December, the excess amounts paid on application were refunded to applicants after the allotment.
4. The funds raised were transferred to the company’s business account.
5. The company paid $300,000 interim dividends from prior retained earnings to ordinary shareholders on 7 February 2020.
6. The company issued 280,000 bonus shares at a price of $2 per share from general reserve on 30 June 2020.
7. The company earned $700,000 profit during the financial year ended 30 June 2020.

Required:

Provide journal entries to record the above transactions for 2019/2020 financial year. (Narrations are required)

Question 1 Accounting for Equity                                                                   

Sugar Ltd was involved in the following transactions during 1 July 2019 to 30 June 2020 financial period.

1. On 5 November 2019 the directors of the company decided to raise extra capital by issuing 2 million ordinary shares publicly at a price of $2 each share. The company received application monies of $4,800,000 for 2.4 million shares on 30 November.
2. The company decided to allot shares to applicants on the basis of 10 shares for every 12 shares applied for on 30 December.
3. On 30 December, the excess amounts paid on application were refunded to applicants after the allotment.
4. The funds raised were transferred to the company’s business account.
5. The company paid $300,000 interim dividends from prior retained earnings to ordinary shareholders on 7 February 2020.
6. The company issued 280,000 bonus shares at a price of $2 per share from general reserve on 30 June 2020.
7. The company earned $700,000 profit during the financial year ended 30 June 2020.

Required:

Provide journal entries to record the above transactions for 2019/2020 financial year. (Narrations are required)      

Compute the cost of debt financing. Compute the cost of equity financing using the capital asset pricing model. Compute the weighted average cost of capital. The capital investment is to be depreciated as a 7 year asset using this table: Ownership year 1 (14.29%), year 2 (24.49%), year 3 (17.49%), year 4 (12.49%), year 5 (8.93%), year 6 (8.92%), year 7 (4.46%). Evaluate each independent project by computing net present value, internal rate of return, and payback. Then decide whether to accept or reject the project.

Debt 40%, interest rate 5%, tax rate 26%, equity 60%, risk free rate 6%, RM 13%, beta 1.10, working capital 10% next year's sales, no terminal cash flows

project 1 capital investment 1,000,000 year 1(revenue 780,000, expenses 585,000) year 2(revenue 799,500,expenses 599,625) year 3(revenue 819,488, expenses 614,616) year 4(revenue 839,975, expenses 629,981) year 5 (revenue 860,974, expenses 645,731) year 6 (revenue 882,498, expenses 661,874) year 7 (revenue 904,561, expenses 678,421) year 8 (revenue 927,175, expenses 695,381)

project 2 capital investment 750,000 year 1(revenue 800,000, expenses 600,000) year 2 (revenue 820,000, expenses 615,000) year 3 (revenue 840,500, expenses 630,375) year 4 (revenue 861,513, expenses 646,134) year 5 (revenue 883,050, expenses 662,288) year 6 (revenue 905,127, expenses 678,845) year 7 (revenue 927,755, expenses 695,816) year 8 (revenue 950,949, expenses 713,211)

project 3 capital investment 1,000,000 year 1 ( revenue 850,000, expenses 680,000) year 2 (revenue 871,250, expenses 697,000) year 3 (revenue 893,031, expenses 714,425) year 4 (revenue 915,357, expenses 732,286) year 5 ( revenue 938,241, expenses 750,593) year 6 (revenue 961,697, expenses 769,358) year 7 (revenue 985,739, expenses 788,592) year 8 (revenue 1,010,383, expenses 808,306)

Which of the following categories of terrorist groups carried out the most lethal attacks (in terms of casualties) between 1968-2005?

Select one:

a. Nationalist/separatist

b. Religious

c. Leftist ideology

d. Rightist ideology

Question 1:

Suppose that your group is the executive sales team for Starbucks. The CEO has just proposed lowering the price of regular coffee and increasing the price of specialty coffee drinks. The belief is that our customers are sensitive to a price change of regular coffee but much less sensitive to a change in the price of specialty coffee. As such, your team is tasked with providing an analysis on this proposal. In order to provide your analysis, you need to find out if the CEO’s theory about customer behavior, and their sensitivity to price changes for regular and specialty coffee, is correct. In order to find out how sensitive customers are to a price change, you will need to calculate the price elasticity of demand, describe what that means, and evaluate the impact on revenues.

For this activity, use the standard percent change formula (also known as the point method).

You have been given the following data on prices and changes in quantity demanded.

Regular Coffee:

Current Price per cup: $2.00 and quantity sold per month is 1 million

Proposed Price per cup: $1.80 and estimated quantity sold per month is 1.5 million

Specialty Coffee:

Current Price per cup: $4.00 and quantity sold per month is 50 million

Proposed Price per cup: $4.40 and estimated quantity sold per month is 47 million

Part 1: Find the elasticity of demand for regular and specialty coffee.

Part 2: Find the total change in revenue for regular and specialty coffee.

Part 3: Use a demand curve graph to explain the change in revenue. You only need to show the demand curve on your graph.

You may upload a picture/file of your graph or use the creately template.

A manager for an insurance company believes that customers have the following preferences for life insurance products: 30 % prefer Whole Life, 30 % prefer Universal Life, and 40 % prefer Life Annuities. The results of a survey of 333 customers were tabulated. Is it possible to refute the sales manager's claimed proportions of customers who prefer each product using the data?

Product Number

Whole. 110

Universal 105

Annuities. 118

Step 1 of 10: State the null and alternative hypothesis.

Step 2 of 10: What does the null hypothesis indicate about the proportions of customers who prefer each insurance product?

Step 3 of 10: State the null and alternative hypothesis in terms of the expected proportions for each category.

Step 4 of 10: Find the expected value for the number of customers who prefer Whole Life. Round your answer to two decimal places.

Step 5 of 10: Find the expected value for the number of customers who prefer Universal Life. Round your answer to two decimal places.

Step 6 of 10: Find the value of the test statistic. Round your answer to three decimal places.

Step 7 of 10: Find the degrees of freedom associated with the test statistic for this problem.

Step 8 of 10: Find the critical value of the test at the 0.010.01 level of significance. Round your answer to three decimal places.

Step 9 of 10: Make the decision to reject or fail to reject the null hypothesis at the 0.010.01 level of significance.

Step 10 of 10: State the conclusion of the hypothesis test at the 0.010.01 level of significance.

You recently started an entry-level job in sales and customer service at a large Canadian telecom company. You were told by your manager that your company is offering a free, 30 day trial of “Fibe Alt TV,” and that you should be suggesting this to customers you talk to. However, you soon learn that this is not in fact a trial, and that customers only receive a free month if they continue the service. You believe that your manager is encouraging sales associates to intentionally mislead customers. You’ve talked with a friend at the company, and she has similar concerns. Imagine you want to raise your concern at your workplace, either to your manager or to someone else at the company.

Drawing on the work of Mary Gentile, specify and explain 2 rationalizations you may possibly encounter. How could you use knowledge of the ways our decision-making can be biased to better craft your response? This part of your answer should mention and explain at least 2 decision-making biases that Gentile considers.

Describe how you would go about analyzing a make-or-buy decision when:

1. Your in-house production capability is not being used to full capacity.

2. You do not have the in-house production capability but could acquire it.

3. You have the in-house capability, but demand for its use exceeds full capacity.

Suppose a company has a contribution margin of 40 percent and total fixed costs of $3 million per year:

1. What is its break-even point in revenue?

2. If its fixed costs increase by 10 percent, and its contribution margin remains unchanged, by what percentage of revenue does its breakeven point increase?

3. By how much would its contribution margin increase if it could raise prices by 3 percent with no changes in variable or fixed costs?

Goodyear Tire and Rubber Company is the ninth largest tire manufacturer in the world. Here are the sales revenues for the past five years:

a.When might a manager prefer linear trend/double exponential smoothing techniques to moving average/simple exponential smoothing techniques and why? (5 points)

b. Based on MAD for the last three years (years 3, 4, and 5), which method (linear-trend or double-exponential smoothing method with a = 0.4 and b = 0.2 (start with initial estimates S₁ = $4,867.90 and T₁ = $201.5 for year 1)) provides the better forecasts? Explain. Then, use your selected forecasting method, forecast the revenue for year 6 and year 7.