Question 5 - Repairs, capital works, depreciation, common business deductions, FBT

Jardin Pty Ltd (Jardin) is a landscaping materials distributor which operates from its own premises, comprising a 1-hectare block of land, which includes a small office. Jardin uses the land as a storage facility and does not manufacture any products on its premises. In September 201W Jardin decided to expand its products line, which required the following investments in its current infrastructure:

1. A large storage shed was built on the land in December 201W. The site required levelling, which was completed at a cost of $30,000 on 15 January 201X. Construction of the storage shed started on 16 January 201X and was completed by 1 March 201X at a cost of $280,000. Because of supplier delays, the first trading stock shipment was only received and stocked at the new storage shed on 1 April 201X.                                                 
2. A new forklift truck was purchased at a cost of $15,000 (effective life 11 years). The new forklift was first used in stocking the new storage shed for the first time.                                                                                                                                                       
3. Due to a heavy hail storm, two out of ten window glass panels in the storage shed were broken and had to be replaced. The repair works were done on 5 July 201X.                                                                                                                                                         
4. Due to the increase in its operations, Jardin hired a new business manager on a part-time basis. At the 30 June 201X Jardin had paid the new manager $60,000 in salaries.                                                                                                                                        
5. Jardin also provided the new business manager with a car (a Kia Carnival costing $55,000) on 1 April 201X. He drives the car to and from work on a continuous basis during the year, and he is only required to cover the fuel costs of $600 per year.                                                                                                                                                                             

Required

For each of the expenses listed in (a) to (e) above, advise Jardin Pty Ltd on whether such expenses would be deductible in the year ending 30 June 201X, stating your calculations (if any) and applying legislation and case law to support your answer.

The chief ranger of the state’s Department of Natural Resources is considering a new plan for fighting forest fires in the state’s forest lands. The current plan uses eight fire-control stations, which are scattered throughout the interior of the state forest. Each station has a four-person staff, whose annual compensation totals $330,000. Other costs of operating each base amount to $230,000 per year. The equipment at each base has a current salvage value of $250,000. The buildings at these interior stations have no other use. To demolish them would cost $23,000 each.

The chief ranger is considering an alternative plan, which involves four fire-control stations located on the perimeter of the state forest. Each station would require a six-person staff, with annual compensation costs of $430,000. Other operating costs would be $240,000 per base. Building each perimeter station would cost $330,000. The perimeter bases would need helicopters and other equipment costing $630,000 per station. Half of the equipment from the interior stations could be used at the perimeter stations. Therefore, only half of the equipment at the interior stations would be sold if the perimeter stations were built.

The state uses a 10 percent hurdle rate for all capital projects. The chief ranger has decided to use a 10-year time period for the analysis.

Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.)

Required:

Use the incremental-cost approach to prepare a net-present-value analysis of the chief ranger’s decision between the interior fire-control plan and the perimeter fire-control plan. (Round your "Discount factors" to 3 decimal places. Negative amounts should be indicated by a minus sign.)

Can you please show working please. I saw the exact question on cheggs but the answer is incorrect and there is now way ii could fallow it.Besides, I plug in the answer they have but it is incorrect

Weller Industries is a decentralized organization with six divisions. The company’s Electrical Division produces a variety of electrical items, including an X52 electrical fitting. The Electrical Division (which is operating at capacity) sells this fitting to its regular customers for $8.30 each; the fitting has a variable manufacturing cost of $4.70.

The company’s Brake Division has asked the Electrical Division to supply it with a large quantity of X52 fittings for only $6.30 each. The Brake Division, which is operating at 50% of capacity, will put the fitting into a brake unit that it will produce and sell to a large commercial airline manufacturer. The cost of the brake unit being built by the Brake Division follows:

Although the $6.30 price for the X52 fitting represents a substantial discount from the regular $8.30 price, the manager of the Brake Division believes the price concession is necessary if his division is to get the contract for the airplane brake units. He has heard “through the grapevine” that the airplane manufacturer plans to reject his bid if it is more than $54 per brake unit. Thus, if the Brake Division is forced to pay the regular $8.30 price for the X52 fitting, it will either not get the contract or it will suffer a substantial loss at a time when it is already operating at only 50% of capacity. The manager of the Brake Division argues that the price concession is imperative to the well-being of both his division and the company as a whole.

Weller Industries uses return on investment (ROI) to measure divisional performance.

1A. Lowest acceptable transfer price __________

1b. would you supply the x52 fitting to the brake divison for $6.30 each as requested ? _______ yes or no

2. financial advantage (disadvantage) on per unit basis ___________

3. higest acceptable transfer price ___________

Describe the wireless solution

you would recommend for EACH of the following three organizations, and

give the rationale

for your decision using at least

three criteria

for that choice. There could be a combination

of these options for an individual organization.

1.

General Hospital

– GH has five floors, each about 30,000 square feet in size for a total of 150,000

square feet. They want to provide a wireless overlay network in addition to their 100Mb switched

wired network. They have a bid for 802.11g access points at a cost of $100 each and a bid for

802.11n access points for $300 each. They expect to need 200 NICs. 802.11b NICs came built into

their laptop and desktops. 802.11n NICs cost about $100 each.

What would you recommend and

WHY?

2.

Central University

– CU wants to add a wireless overlay network to one 20,000 square foot floor

in its business school building. They have a bid for 802.11g access points at a cost of $100 each

and a bid for 802.11n access points for $300 each. Students will buy their own computers, most

of which will come with 802.11n NICs.

What would you recommend, and WHY?

3.

Ubiquitous Offices

–

UO provides temporary office space in cities around the country. They have

a standard office layout that is a single floor with outside dimensions of 150 feet wide by 150 feet

long. The interior is drywall offices. They have a switched 100Mb

wired LAN but want to add

WLAN as well.

Data rates have been shown to slow dramatically when the distance from a laptop

to the wireless access point (radius of circle) exceeds 25 feet

.

a.

How many access points would you recommend and where would they be placed?

b.

Draw the office and show where the access points would be located.

c.

Show coverage for each access point with a circle, and label the channels (1, 6,

The summarized financial statements of Indira, a limited liability company, at 31 October 2012 and 31 October 2013 are given below:

Balance sheet

Income Statement

Notes

(1) On 1 November 2012 office equipment that had cost GHS240, 000 with a net book value of GHS80, 000, was sold for GHS30, 000.

(2) The purchase of new non-current assets took place near the end of the year.

(3) The depreciation charge for the year ended 31 October 2013 was GHS120, 000.

(4) The ordinary share issue was on 31 October 2013.

(5) Some of the non-current assets were revalued upwards by GHS300, 000 on 1 November 2012.

(6) Cost of sales was made up as follows:

Prepare a cash flow statement for Indira for the year ended 31 October 2013, using the format in IAS 7 Cash Flow Statements.

Please kindly answer the following questions

The following are correct statements about the effects coming from a Price Floor regulation on a certain market, EXCEPT:

Question 19 options: (Answer is not A)

As a result of an expected increase in the price of gasoline in the near future, the followings are likely effects, EXCEPT:

Question 15 options: (Answer is not C)

The following factors could likely Shift Down the Supply Curve for certain good X,  EXCEPT:

Question 14 options: (Answer is not A)

The following are correct descriptions about the Supply Curve for certain good X, EXCEPT:

Question 13 options: (Answer is not C)

The following are correct descriptions of the Demand Curve, EXCEPT:

Question 11 options: (Answer is not A)

Please answer in detail, I got this answer couple time in very nutshell. URGENT

Answers given without showing steps or providing explanations will not be considered. Where possible, use tables and/or graphs to support your answers.

1. The World Health Organization (WHO) is considering sending in a team of experts to deal with an outbreak of schistosomiasis in a developing country. It costs $25,000 for every additional five team members sent. Sending a larger team will allow WHO to prevent more fatalities, and they estimate the following effectiveness:

a) (20’) Please plot the incremental cost-effectiveness ratios in a two-dimensional graph with total effectiveness along the horizontal axis and incremental cost-effectiveness ratios along the vertical axis.

b) (20’) If saving a life is valued at $10,000, what is the optimal number of team members sent?

c) (20’) Suppose the WHO has a total budget of $150,000 to be spent on fighting this epidemic. How would your answer to b) change?

2. Patient BN is a 36-year-old female with a type of organ failure that reduces her quality of life to half of what it would be in good health. Without treatment she can expect to live only two years. With a successful transplant, BN can expect to live four years and have a quality of life that is near 80% what she would enjoy in good health. However, the transplant costs $100,000, plus $10,000 each year for drugs and follow-up care, and carries a 15% risk of rejection resulting in immediate death.

a) (20’) What is the cost per additional year of life gained (without discounting for time or quality of life)?

b) (20’) What is the cost per discounted Quality-adjusted Life-year (QALY) gained (assuming a 5%-time discount rate)?

Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs:

For example, electricity costs are $1,100 per month plus $0.06 per car washed. The company expects to wash 8,500 cars in August and to collect an average of $6.10 per car washed.

The actual operating results for August appear below.

Required:

Prepare a flexible budget performance report that shows the company’s revenue and spending variances and activity variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs:

For example, electricity costs are $1,200 per month plus $0.06 per car washed. The company expects to wash 8,000 cars in August and to collect an average of $6.20 per car washed.

The actual operating results for August appear below.

Required:

Prepare a flexible budget performance report that shows the company’s revenue and spending variances and activity variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

ch8 exer #3