Aramark is considering a 3-year project with an initial cost of $570,000. The project will not directly produce any sales but will reduce operating costs by $147,000 a year. The equipment is classified as MACRS 7-year property. The MACRS table values are .1429, .2449, .1749, .1249, .0893, .0892, .0893, and .0446 for Years 1 to 8, respectively. At the end of the project, the equipment will be sold for an estimated $295,000. The tax rate is 25 percent and the required return is 12 percent. An extra $41,000 of inventory will be required for the life of the project. What is the total cash flow for Year 3? $459,738.50 $465,546.17 $476,218.44 $481,983.20 $488,549.26

$2,000 are deposited into a fund at the beginning of each year for 20 years. Starting from the beginning of the 26th year, the balance can support annual payment D lasting forever. Find D if the nominal interest rate compounded continuously is 8%.

A new edition of a very popular textbook will be published a year from now. The publisher currently has 1,000 copies on hand and is deciding whether to do another printing before the new edition comes out. The publisher estimates that demand for the book during the next year is governed by the probability distribution in the file P10_31.xlsx. (See Demand and Probability Table Below)A production run incurs a fixed cost of $15,000 plus a variable cost of $20 per book printed. Books are sold for $190 per book. Any demand that cannot be met incurs a penalty cost of $30 per book, due to loss of goodwill. Up to 1,000 of any leftover books can be sold to Barnes and Noble for $45 per book. The publisher is interested in maximizing expected profit. The following print-run sizes are under consideration: 0 (no production run) to 16,000 in increments of 2,000. What decision would you recommend? Use simulation with 1,000 replications.
Select02,0004,0006,0008,00010,00012,00014,00016,000

For your optimal decision, the publisher can be 90% certain that the actual profit associated with remaining sales of the current edition will be between what two values? If needed, round your answers to whole dollar amounts.
$ and $   

Erica is considering a project that will produce cash inflows of $2,999 a year for 3 years. The required rate of return is 15 percent and the initial cost is $6,800. What is the discounted payback period?

1) The condensed income statement for a business for the past year is presented as follows:

Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. What is the amount of change in net income for the current year that will result from the discontinuance of Product G?

a) $10,000 increase

b) $20,000 increase

c) $10,000 decrease

*d) $20,000 decrease (correct answer)

2) Frank Co. is currently operating at 80% of capacity and is currently purchasing a part used in its manufacturing operations for $25 unit. The unit cost for Frank Co. to make the part is $30, which includes $3 of fixed costs. If 20,000 units of the part are normally purchased each year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease for making the part rather than purchasing it?

a) $60,000 decrease

b) $40,000 decrease

*c) $40,000 increase (correct answer)

d) $60,000 increase

Extracts of the Statement of Comprehensive Income for the year ended 31 December 2018 and
the Statement of Financial Position as at 31 December 2018 are given below for two companies
viz. Amazon Limited and Gibson

Extract of the Statement of Comprehensive Income for the year ended 31 December 2018:

Extract of the Statement of Financial Position as at 31 December 2018:

Additional Information:                                                                                                           

• Inventories as at 31 December 2017 are as follows:                                                

Amazon Limited          R800 000                                                                                           

Gibson Limited            R230 000                                                                               

• All sales and purchases of inventories are on credit.

Required:

Compare the performance of Amazon Limited and Gibson Limited (both in same industry) with regard to the following ratios and in each case state your observations:

4.1.      The ability of each company to repay its short term debts without relying on sale of its inventories.                                                                                                                                    (6)

4.2.      The return earned by shareholders on their investment.                                                       (6)

4.3.      The operational effectiveness of each company before considering interest income, interest expense and income tax.                                                                                                          (6)

4.4.      The effectiveness with which the goods for sale have been managed.                                (6)

4.5.      An evaluation of each company’s performance with regard to the management of its trade creditors.

The draft accounts for the year ended 30 June 2019 and a balance sheet as at that date for W. Willow are submitted to you. Towards the end of the financial year, her accountant resigned and she had completed the records herself. She thinks that errors have occurred and asks for your help. An examination of the accounting records reveals the following. W. Willow is registered for GST.

Required:
(a) Show the journal entries required to make the necessary adjustments.    

1. Interest of $1920 on the investments held by the business was due, but has not been received.

Type your answers in the Table included in the Response Template below.

2. A payment of $4160 for new office furniture has been incorrectly debited to the Sundry Expenses account. The furniture had been purchased 30th of June 2019.

Type your answers in the Table included in the Response Template below.

3. Rent due from customers Raggatt and Petney amounting to $2560, plus GST, is not included in the accounts.

Type your answers in the Table included in the Response Template below.

4. Repairs to Willow’s private motor vehicle, $1700, plus GST, have been debited to the Vehicle Expenses account and GST Receivable account.

Type your answers in the Table included in the Response Template below.

5. Commission due to sales representatives for the month of June, $4480, has been overlooked.

Type your answers in the Table included in the Response Template below.

6. An insurance policy covering contents and buildings was taken out on 1 March 2019, the annual premium of $2400 being paid in advance on this date and debited to the Prepaid Insurance account.

Type your answers in the Table included in the Response Template below.

7. A payment of $35 000 which occurred on 1 July 2018 for additions to buildings has been debited to Repairs and Maintenance.

Type your answers in the Table included in the Response Template below.

8. No depreciation has been recognised for the year ending 30 June 2019. The draft balance sheet shows the following.

Depreciation is to be calculated as follows.

(b) Buildings: 2% on cost

Type your answers in the Table included in the Response Template below.

(c) Office furniture and equipment: 20% on cost

Type your answers in the Table included in the Response Template below.

(d) Calculate the effect (increase or decrease) of each of the adjustments on the profit figure of $64 900 as shown in the draft accounts.

1. If you learn, this year, that a committee in Congress is investigating possible wrongdoing by Joe Biden in Ukraine, and if you are not told which chamber of Congress this is happening in, which chamber would you guess it probably is? Explain why.  

At the end of the current year, the accounts receivable account has a debit balance of $932,000 and sales for the year total $10,570,000.

1. The allowance account before adjustment has a debit balance of $12,600. Bad debt expense is estimated at 1/2 of 1% of sales.
2. The allowance account before adjustment has a debit balance of $12,600. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $40,300.
3. The allowance account before adjustment has a credit balance of $6,400. Bad debt expense is estimated at 3/4 of 1% of sales.
4. The allowance account before adjustment has a credit balance of $6,400. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $53,100.

Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above.

You are to receive an end-of-year bonus of $50,000 increasing by $1000 for each of the next ten years. If MARR is 12% and inflation rate is anticipated to be 2%, what will be purchasing power?