For each situation indicate when a company should recognize revenue:

revenue and collection cycle. Explain what the revenue and collection cycle is in your own words and describe two audit procedures you would do if you were auditing an organization and why you would do those procedures.

is net sales= net revenue? term sales and revenue are same? is Net sales and cost of goods sold same?

Excess revenue (total revenue minus operating expenditures) in the nonprofit sector are normally distributed with a mean of $1.5 million and a standard deviation of $1 million.

(a) What is the probability that a randomly selected nonprofit has negative excess revenues?

(b) What is the probability that a randomly selected nonprofit has excess revenue between $1 million and $2 million?

(c) If 10% of nonprofits are expected to exceed a certain excess revenue level, what is that revenue level?

Revenue Sources Discussion

In running any business, it is important to identify and manage your revenue sources so you can remain financially viable. In a health care environment, this is particularly important. As you know, there may be many changes to the Affordable Care Act (ACA) on the horizon under the new Administration in Washington, D.C. Research the Affordable Care Act (ACA) and:

1. In your first post:

Discuss one thing that you feel should remain the same with the new health care legislation that is expected from the current Administration, OR, discuss one change that you feel is greatly needed. Be sure to provide solid rationale for what you believe should remain the same or what aspect of the legislation should change.

Discuss the concept of Managed Care Organizations (MCOs). What is the goal of an MCO? Briefly discuss one strategy that is used by an MCO to reduce costs.

Two old science fiction movies, Godzilla (1998) and Aliens (1986) depict fictional large female carnivores.  The Godzilla female lives off a large prey population of humans and fishes but has no assistance from others of her kind.  In a few days, she produces hundreds of 7ft tall eggs, enough to fill Madison Square Gardens.  The Alien female lives off a small prey population of a few dozen humans, is assisted by non-reproducing workers and produces hundreds of large eggs in a few weeks.

Comment on what is realistic and what is unrealistic about the life history traits and egg production abilities for each of these 'animals' and what makes them so.  Include a hypothesize as to their life span expectations and their 'Darwinian fitness'.

(can you give a little more detail to help me understand this matter? Thank you.)

Category Billions of current dollars

1998 2008 2018 2028

1. Gross Domestic Product $9062.8 14,712.8 $20,494.1 $30,493.1

2. Personal Consumption expenditures 5,877.2 9,976.3 13,948.5 ______

3. Gross Private domestic investment 1,736.7 _____ 3,650.1 5,822.0

Government expenditures   1,611.6 2,982.0 3,520.8 4,741.3

4. Exports 953.0 1,837.1 ______ 3891.0

Imports 1,115.7 2, 560.1 3,156.7 4,711.5

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Above is a hypothetical table like on the Bureau of Labor and Statistics when reporting historical and forecasted levels of gross domestic product for the US.  Fill in the blanks with the missing estimates . Show all work.  

1. 2028 Personal Consumption Expenditures Answer (Remember to show work):
2. 2008 Gross Private Domestic Investment Answer (Remember to show work):
3. 2018 Exports Answer (Remember to show work):

Dhingra & Associates Consulting and our firm is working on behalf of Falguni and Sameer’s Financial Empire. The Empire is involved in a major capital expansion by developing a significant Entertainment Centre.

An in- depth market survey and a concept plan have been completed by Dhingra and Associates at a considerable cost of $375,000.

Falguni has owned the land for years and the book value (balance sheet) is just $500,000, and its current market value is $4 million (4,000,000). If the Entertainment Centre project is evaluated over a 10-year period and when the Centre is shut down at the end of that period, the land would be worth $4.8 million based on a land appreciation rate of about 2% per year on average. The project requires a large castle structure, costing $18 million, to be constructed this year (year 0). The castle is a Class 1 asset with a CCA rate of 4%. At the end of the 10-year period, we estimate that the castle can be sold for about half of its initial cost.

We estimate that an investment of $7 million is required for equipment needed to operate the new Centre. This capital cost for all equipment will be depreciated using straight-line depreciation over the 10-year period (starting from year 1)1. Of course, the equipment required for the Centre will be treated quite roughly during this period, so we estimate that they will have no value at the end of the project’s life. All annual depreciation amounts related to both the castle and the equipment will result in an annual tax-shield for the company, but we’re not sure how to account for this in our project analysis. Falguni and Sameer have instructed us that they require a 10% rate of return on this type of project based on similar risk projects. They have sufficient capital available and the marginal tax rate for their company is 35%.

NOTE: 1 Straight-line depreciation means that the annual depreciation amount allowed under CCA tax rule is simply the total initial cost divided by number of years in the project’s life.

The project requires $1.2 million in incremental net working capital (NWC) immediately (at year 0). The required amount will double at the end of year 1, and then we expect that it will need to be maintained at the level of $3 million starting from the end of year 2 (when the Centre is working at full capacity) until the end of the project. Please note that at the end of the 10th year, the accumulated NWC will no longer be required.

We estimate that the Entertainment Centre will have $1 million in extra annual fixed costs for the company. Based on our marketing research, we estimate the incremental revenue in year 1 to be about $12 million, with incremental variable costs of $6 million. For each of years 2 to 7, the Centre will run at full capacity, with annual incremental revenues of $15 million and annual incremental variable costs of $7 million for the company. For the last three years (years 8-to-10), we expect a gradual slowdown in the Centre’s activities that will result in about $1 million of lost revenues per year. This will be accompanied by a $0.5 million reduction in variable costs. There will be no change in the fixed costs of operating the Centre over the 10-year period (from year 1-to-10).

Please use (display + name) the excel function/ formula used for cells (as required).

Ques 1: Given the above information, what is the NPV of this Entertainment Centre project?

Ans: Computing the NPV of the Entertainment Centre project assuming a RRR of 10%

Ques 2 :Using the base case, what is the percentage change in the project’s NPV if the required return increased by 2% (r =12% instead of 10%) to account for additional risk factors?

Ques 3 : What is the NPV in a scenario where the annual incremental costs (both fixed and variable) and annual incremental revenues are all worse by 5% compared to the base scenario?

DeYoung Entertainment Enterprises is considering replacing the latex molding machine it uses to fabricate rubber chickens with a newer, more efficient model. The old machine has a book value of $800,000 and a remaining useful life of 5 years. The current machine would be worn out and worthless in 5 years, but DeYoung can sell it now to a Halloween mask manufacturer for $270,000. The old machine is being depreciated by $160,000 per year for each year of its remaining life.

The new machine has a purchase price of $1,185,000, an estimated useful life and MACRS class life of 5 years, and an estimated salvage value of $105,000. The applicable depreciation rates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. Being highly efficient, it is expected to economize on electric power usage, labor, and repair costs, and, most importantly, to reduce the number of defective chickens. In total, an annual savings of $245,000 will be realized if the new machine is installed. The company's marginal tax rate is 35% and the project cost of capital is 15%.

a. What is the initial net cash flow if the new machine is purchased and the old one is replaced? Round your answer to the nearest dollar.


b. Calculate the annual depreciation allowances for both machines, and compute the change in the annual depreciation expense if the replacement is made. Do not round intermediate calculations. Round your answers to the nearest dollar.

c. What are the incremental net cash flows in Years 1 through 5? Do not round intermediate calculations. Round your answers to the nearest dollar.

d. What is the NPV?