What are unions? Explain why employees join Unions. Explain what collective bargaining is. Lastly, what some critical issues for unions today?
In: Operations Management
17. Following are financial statement numbers and select ratios for American Eagle Outfitters for 2016, the year ended January 28, 2017.
|
Current |
Forecast Horizon |
Terminal Year |
||||
|
($ thousands) |
2016 |
2017 |
2018 |
2019 |
2020 |
|
|
Sales |
3,609,865 |
3,754,260 |
3,866,887 |
3,982,894 |
4,102,381 |
4,143,405 |
|
Net operating profit after tax (NOPAT) |
207,262 |
213,993 |
220,413 |
227,025 |
233,836 |
236,174 |
|
Net operating assets (NOA) |
825,956 |
859,098 |
884,871 |
911,417 |
938,760 |
948,148 |
Forecast assumptions and other financial information for AE Outfitters are as follows:
|
Sales growth 2017 |
4% |
|
Sales growth 2018 to 2020 |
3% |
|
Terminal growth rate |
1% |
|
Net operating profit margin (NOPM) |
5.7% |
|
Net operating asset turnover (NOAT) |
4.37 |
|
Discount rate |
5% |
|
Shares outstanding in thousands |
181,886 |
|
Stockholders' equity |
$1,204,569 |
|
Net nonoperating obligations (NNO) |
$(378,613) |
Required:
a. Use the residual operating income (ROPI) model to estimate the value of AE Outfitters’ equity per share at January 28, 2017.
b. AE Outfitters’ shares closed at $14.28 per share on March 10, 2017, the date the 10-K was filed with the SEC. How does your valuation compare with this closing price?
In: Accounting
You have to choose one of these industries
In: Economics
#2) Running Regression
Here’s a small dataset:
|
Year |
Price of Bread |
|
1940 |
$0.10 |
|
1950 |
$0.12 |
|
1960 |
$0.23 |
|
1970 |
$0.25 |
|
1980 |
$0.50 |
|
1990 |
$0.75 |
|
2000 |
$1.99 |
|
2010 |
$2.99 |
a) Using Linear Regression on a TI or Excel, find the coefficients for:
price=a+b*year
b) What are your r and r-squared values? What does this tell you?
c) What does the t-stat for your b value above tell you about the model?
d) Predict the price in 2020.
In: Statistics and Probability
Bandung Corporation began 2020 with a $46,000 balance in the deferred tax liability account. At the end of 2020, the related cumulative temporary difference amounts to $350,000 and it will reverse evenly over the next 2 years. Pretax accounting income for 2020 is $525,000, the tax rat for all years is 20%, taxable income for 2020 is $405,000.
a) Compute income taxes payable for 2020
b) Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2020
c) Prepare the income tax expense section of the income statement for 2020 beginning with the line "Income before income tax"
In: Accounting
1/ The stockholders’ equity of TVX Company at the beginning of the day on February 5 follows:
|
Common stock—$10 par value, 150,000 shares authorized, 69,000 shares issued and outstanding |
$ | 690,000 | |
| Paid-in capital in excess of par value, common stock | 525,000 | ||
| Retained earnings | 675,000 | ||
| Total stockholders’ equity | $ | 1,890,000 | |
On February 5, the directors declare a 16% stock dividend
distributable on February 28 to the February 15 stockholders of
record. The stock’s market value is $41 per share on February 5
before the stock dividend. The stock’s market value is $35 per
share on February 28.
One stockholder owned 600 shares on February 5 before the dividend. Compute the book value per share and total book value of this stockholder’s shares immediately before and after the stock dividend of February 5. (Round your "Book value per share" answers to 3 decimal places.)
| Before | After | |
| Book value per share | $27.391 | |
| Total book value of shares | $ |
2/ Required information
The following information applies to the questions displayed below.]
Duval Co. issues four-year bonds with a $101,000 par value on January 1, 2017, at a price of $96,990. The annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31.
. Prepare an amortization table for these bonds. Use the straight-line method of interest amortization. (Round your answers to the nearest dollar amount.)
| Semiannual | Unamortized | Carrying |
| Period-End | Discount | Value |
| 1/01/2017 | ||
| 6/30/2017 | ||
| 12/31/2017 | ||
| 6/30/2018 | ||
| 12/31/2018 | ||
| 6/30/2019 | ||
| 12/31/2019 | ||
| 6/30/2020 | ||
| 12/31/2020 |
In: Accounting
World of Leasing Limited (WLL) is trying to determine the lease payment it should quote for the construction trucks it is considering purchasing for leasing. Assume that each truck costs $200,000, has a 5 year useful life and a CCA rate of 50%. Before tax operating cost of the truck is $50,000 per year paid by the owner (lessor) of the asset. The corporate tax rate is 40%, before tax cost of debt is 8%, and risk free rate is 4%. Cost of capital is 10%. CCA tax shield will be claimed at the end of the year and the lease payment and operating costs will be at the beginning of the year.
a. Determine the annual lease payment if the resale value of the truck is $60,000 after 5 years. Assume asset pool is open.
b. Determine the annual lease payment if the resale value of the truck is $60,000 after 5 years. Assume asset pool is closed.
c. Continuing with b) above, suppose OnlyLease Inc. (OLI) has a corporate tax rate of 0%, cost of debt is 8%, and cost of capital is 12%. What is the maximum lease payment OLI would be willing to make?
d. Within what range of values WLL and OLI can make a deal?
In: Finance
World of Leasing Limited (WLL) is trying to determine the lease payment it should quote for the construction trucks it is considering purchasing for leasing. Assume that each truck costs $200,000, has a 5 year useful life and a CCA rate of 50%. Before tax operating cost of the truck is $50,000 per year paid by the owner (lessor) of the asset. The corporate tax rate is 40%, before tax cost of debt is 8%, and risk free rate is 4%. Cost of capital is 10%. CCA tax shield will be claimed at the end of the year and the lease payment and operating costs will be at the beginning of the year.
a. Determine the annual lease payment if the resale value of the truck is $60,000 after 5 years. Assume asset pool is open.
b. Determine the annual lease payment if the resale value of the truck is $60,000 after 5 years. Assume asset pool is closed.
c. Continuing with b) above, suppose OnlyLease Inc. (OLI) has a corporate tax rate of 0%, cost of debt is 8%, and cost of capital is 12%. What is the maximum lease payment OLI would be willing to make?
d. Within what range of values WLL and OLI can make a deal?
In: Finance
Splish Corp. has 150,240 shares of common stock outstanding. In 2020, the company reports income from continuing operations before income tax of $1,210,400. Additional transactions not considered in the $1,210,400 are as follows.
| 1. | In 2020, Splish Corp. sold equipment for $38,300. The machine had originally cost $83,600 and had accumulated depreciation of $31,900. The gain or loss is considered non-recurring. | |
| 2. | The company discontinued operations of one of its subsidiaries during the current year at a loss of $191,500 before taxes. Assume that this transaction meets the criteria for discontinued operations. The loss from operations of the discontinued subsidiary was $90,100 before taxes; the loss from disposal of the subsidiary was $101,400 before taxes. | |
| 3. | An internal audit discovered that amortization of intangible assets was understated by $38,400 (net of tax) in a prior period. The amount was charged against retained earnings. | |
| 4. | The company recorded a non-recurring gain of $125,400 on the condemnation of some of its property (included in the $1,210,400). |
Analyze the above information and prepare an income statement for
the year 2020, starting with income from continuing operations
before income tax. Compute earnings per share as it should be shown
on the face of the income statement. (Assume a total effective tax
rate of 19% on all items, unless otherwise indicated.)
(Round earnings per share to 2 decimal places, e.g.
1.47.)
|
SPLISH CORP. |
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In: Accounting
In: Operations Management