In a marginal/differential analysis, I have two decision options available for the upcoming year:

1. Keep open my existing arcade business only and not expand, or 2. expand business by opening a second location across town

If opened, the second locaiton's staff wages would be the same percentage of sales as the original location. The opening of the second location is estimated to result in a 15% increase in sales for the original location.

Question...

I have calculated the breakeven point (in units). If I multiply the breakeven by the price per unit, is that number supposed to cover my variable expenses, or my fixed expenses? How do I use that breakeven info. to determine if the decision to expand is good or not?

City Q has an average water consumption of 22000 m3 / day. Jar tests have indicated that 33 mg / L of hydrated aluminum sulphate "alum" [Al2 (SO4) 3.14H2O] is the optimum dosage required to treat the water supply to this town. The additional alkalinity used is HCO3-. The natural alkalinity in the untreated water source is 57 mg / L as CaCO3. Use the coagulation reaction to:
a. Determine the amount of coagulant used per day (in kg / day)
b. Determine the amount of precipitant generated per day (in kg / day).
c. How much alkalinity is being consumed during the coagulation / flocculation process (in mg / L CaCO3)? Is the natural alkalinity level adequate?

A CSTR activated sludge system is being designed for the Fulton Fish Processing Plant. The flow is relatively small (0.25 mgd), but the wastewater is strong due to all of the fish waste (BOD5 = 4500 mg/L). Primary settling removes 20% of the BOD5. In order to discharge to the town sewer the BOD5 must be reduced to a concentration that is 95% of the influent. What is the Dimensions of the basin assuming a 3:1 L:W ratio. Also, what is the sludge production rate?

Design Parameters

θc = 10 days

X = 2100 mg VSS/L

MLVSS is 75% of MLSS

Aeration Basin = 20 ft deep

Yobs = 0.3 mg MLSS/mg BOD5

Recycle Ratio = 50%

4. Which of the following pricing practices represents price discrimination? Explain.

a. Local businesses in a small college town offer a 10% discount to anyone showing a student ID card.

b. Fred’s Fridges advertises a one-day sale on refrigerators. The ad specifies that no phone orders are accepted and that the buyer must transport the refrigerator.

c. A hardback copy of the last Harry Potter book sold for $30 at an independent bookstore; but for $25 at the local outlet of a national bookstore chain.

d. Freshman tuition and fees at Penn State-University Park for academic year 2018-2019 was about $18,000 for Pennsylvania residents and $35,000 for out-of-state students (a pricing pattern that is typical of state universities.)

Read the following:

Bill Smith, after a period of great self-reflection and introspection, went to see his boss with the following information and ultimately a request to transfer. Bill was shocked to look in the mirror and realize he was middle aged and still only in the middle income bracket of society. In addition, he was tired of living in a large city, so he wanted to be transferred to a small town. And finally, along with his transfer, he expected to receive a large raise.

Answer these questions:

• What do you think could be a major communication problem(s) in this scenario?
• How can these communication issues be solved?
• How could a communication problem between Bill Smith and his boss affect management actions?

One major advantage of corporate ownership is limited liability of shareholders. Let's say that Emma is the primary shareholder of a family based corporation that owns five laundromats in town. Emma's company needs to borrow $350,000 from the bank to expand its business. As President, she signs a promissory note with the bank on behalf of the corporation. The banker also asks that she sign another document in which she is personally liable for the loan in the event the corporation cannot repay it. The three other shareholders, Tom, James and Linda, do not sign the paper to be personally liable. If the company goes bankrupt and the bank loan is not paid, is Emma personally liable to the bank for the balance on the note or is she not liable since the loan was given to the corporation?

Conch Republic Electronics Part 1

Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelley Couts, who inherited the company. When it was founded over 70 years ago, the company originally repaired radios and other household appliances. Over the years, the company expanded into manufacturing and is now a reputable manufacturer of various electronic items. Jay McCanless, a recent MBA graduate, has been hired by the company's finance department.

One of the major revenue-producing items manufactured by Conch Republic is a smart phone. Conch Republic currently has one smart phone model on the market, and sales have been excellent. The smart phone is a unique item in that it comes in a variety of tropical colors and is preprogrammed to play Jimmy Buffett music. However, as with any electronic item, technology changes rapidly, and the current smart phone has limited features in comparison with newer models. Conch Republic spent $750,000 to develop a prototype for a new smart phone that has all the features of the existing smart phone but adds new features such as WiFi tethering. The company has spent a further $200,000 for a marketing study to determine the expected sales figures for the new smart phone.

Conch Republic can manufacture the new smart phones for $215 each in variable costs. Fixed costs for the operation are estimated to run $6.1 million per year. The estimated sales volume is 155,000, 165,000, 125,000, 95,000, and 75,000 per year for the next five years, respectively. The unit price of the new smart phone will be $520. The necessary equipment can be purchased for $40.5 million and will be depreciated on a seven-year MACRS schedule. It is believed the value of the equipment in five years will be $6.1 million.

As previously stated, Conch Republic currently manufactures a smart phone. Production of the existing model is expected to be terminated in two years. If Conch Republic does not introduce the new smart phone, sales will be 95,000 units and 65,000 units for the next two years, respectively. The price of the existing smart phone is $380 per unit, with variable costs of $145 each and fixed costs of $4.3 million per year. If Conch Republic does introduce the new smart phone, sales of the existing smart phone will fall by 30,000 units per year, and the price of the existing units will have to be lowered to $210 each. Net working capital for the smart phones will be 20 percent of sales and will occur with the timing of the cash flows for the year; for example, there is no initial outlay for NWC, but changes in NWC will first occur in Year 1 with the first year's sales. Conch Republic has a 35 percent corporate tax rate and a required return of 12 percent.

Shelley has asked Jay to prepare a report that answers the following questions.

Conch Republic Electronics Part 2

Shelley Couts, the owner of Conch Republic Electronics, had received the capital budgeting analysis from Jay McCanless for the new smart phone the company is considering. Shelley was pleased with the results, but she still had concerns about the new smart phone. Conch Republic had used a small market research firm for the past 20 years, but recently the founder of that firm retired. Because of this, she was not convinced the sales projections presented by the market research firm were entirely accurate. Additionally, because of rapid changes in technology, she was concerned that a competitor could enter the market. This would likely force Conch Republic to lower the sales price of its new smart phone. For these reasons, she has asked Jay to analyze how changes in the price of the new smart phone and changes in the quantity sold will affect the NPV of the project.

Shelley has asked Jay to prepare a memo answering the following questions.

QUESTIONS

1.What is the payback period of the project?

2.What is the profitability index of the project?

3.What is the IRR of the project?

4.What is the NPV of the project?

5.How sensitive is the NPV to changes in the price of the new smart phone?

6.How sensitive is the NPV to changes in the quantity sold of the new smart phone?

PLEASE ATTATCH EXCEL FILE FOR ANSWER THANK YOU!!!!!

Drinkeverywhere is an American retailer located in Seattle, WA. The company president is Sam Cooper, who inherited the company. When the company was founded over 60 years ago, it originally focuses on retailing high-end beverage, wines, and finer foods to more than 30 states in the US. Over the years, the company still maintains its main business, which accounts for about 50 percent of its total revenue. Faced with stiff competition, the company also expanded into the business of manufacturing its own beverages. You and your team, the Carson College of Business graduates, are hired by the company's finance department to evaluate a new project for the company. One of the major revenue-producing items of Drinkeverywhere’s manufacture division is a sparkling soft drink. Drinkeverywhere currently has one flavor of this beverage, with size of 12 FL OZ each, and sales have been excellent. Drinkeverywhere’s main competitor on the beverage market is the Coca-Cola Company (KO). Drinkeverywhere’s drink is healthier but has similar taste to Coke. However, Drinkeverywhere wants to incorporate a new flavor into their products. Drinkeverywhere spent $100,000 to develop a new technology for its beverage that has all the features of the existing one but adds a new flavor, which can balance the original taste while having some new and exotic flavor to it. The new product also has much lower calories. The company has spent a further $25,000 for a marketing study to determine the expected sales figures for the new flavor. Drinkeverywhere can manufacture the new beverage for $0.5 per can in variable costs. Fixed costs for the operation are estimated to run $2.5 million per year. The estimated sales volume is 3,400,000, 2,550,000, 2,950,000, 2,680,000 and 1,978,000 cans per year for the next five years, respectively. The unit price of the new beverage will be $2.5 per can. The necessary equipment can be purchased for $12 million and will be depreciated on a seven-year MACRS schedule. It is believed the value of the equipment in five years will be $2 million. As previously stated, Drinkeverywhere currently manufactures a beverage product. Production of the existing product is expecting to be terminated in three years. If Drinkeverywhere does not introduce the new beverage product, sales of the existing product will be 2,000,000, 1,990,000 and 187,000 cans per year for the next three years, respectively. The price of the existing drink is 2 $1.5 per can, with variable costs of $0.3 each and fixed costs of $0.8 million per year. If Drinkeverywhere does introduce the new beverage, sales of the existing one will fall by 5,000 cans per year, and the price of the existing drinks will have to be lowered to $1.2 each can. Net working capital for the beverage will be 20 percent of sales and will occur with the timing of the cash flows for the year; for example, there is no initial outlay for NWC, but changes in NWC will first occur in Year 1 with the first year's sales. Drinkeverywhere has a 25 percent corporate tax rate. The company has a target debt to equity ratio of .55 and is currently A+ rated (according to S&P 500 ratings). The overall cost of capital of the company is 12 percent. The finance department of the company has asked your team to prepare a report to Sam, the company’s CEO, and the report should answer the following questions.

QUESTIONS 1. Can you and your team prepare the income statement table, the operating cash flow (OCF) table, and the total cash flow from assets (CFFA) table for this project?

2. Can you use these tables to help explain to Sam the relevant incremental cash flows of this project?

3. James, a newly graduated MBA in the company’s finance department suggested that you should use 12% as the discount rate for the discounted cash flow (DCF) analysis for this new project. Do you and your team agree with James?

a) If Yes, can you explain to Sam, the president of the company, why you should use 12%?

b) If Not, please find the cost of capital for this project, and explain in details how your team comes up with this number and why it is proper for this DCF analysis?

4. What are the NPV and IRR of the project?

5. Should Sam take the new project? Why or why not?

The University of Danville is a private not-for-profit university that starts the current year with $700,000 in net assets: $400,000 without donor restrictions and $300,000 with donor restrictions. The $300,000 is composed of $200,000 with purpose restrictions and $100,000 that must be held permanently.

The following transactions occurred during the year.

1. Charged students $1.2 million for tuition and fees.
2. Received a donation of equity investments that had cost the owner $100,000 but is worth $300,000 currently. According to the terms of the gift, the university must hold the investments forever but can spend the dividends for any purpose. Any changes in the value of these securities must be held forever and cannot be spent.
3. Received a cash donation of $700,000 that must be spent to acquire laboratory equipment.
4. Awarded scholarships to students in the amount of $100,000.
5. Paid salary expenses of $149,000 (teaching), $80,000 (research), $50,000 (administrative), and $40,000 (fundraising).
6. Learned that a tenured faculty member is contributing his services for this year and will not accept his $80,000 salary. His time is 70 percent teaching and 30 percent research.
7. Spent $200,000 of the money in (c) on laboratory equipment. The donor had made no specifications about the recording of the acquisition. The equipment is used 80 percent of the time for research and 20 percent of the time for teaching.
8. Learned that the investments in (b) are worth $339,000 at the end of the year.
9. Received cash dividends of $9,000 on the investments in (b).
10. Computed depreciation expense for the year on the equipment in (g) as $32,000.
11. The school’s board of trustees votes to set aside $100,000 of previously unrestricted cash for the future purchase of library books.
12. Received an unconditional promise of $10,000 halfway through the year. The school expects to collect the money in three years. The $10,000 future payment has a present value of $7,513 based on a reasonable annual interest rate of 10 percent.
13. Received an art object as a gift. It is worth $70,000. For financial reporting, it qualifies as work of art/museum piece. The school prefers not to record such gifts unless required.
14. Paid utilities and other general expenses of $83,000 (teaching), $45,000 (research), $43,000 (fundraising), and $50,000 (administrative).
15. Received free services from alumni who come to campus each week and put books on the shelves in the library. Over the course of the year, the school would have paid $103,000 to have this work done.
16. Near the end of the year, the school received a pledge of $40,000 to be collected in two years. It is judged to be conditional and has a present value of $31,200.

Determine the end-of-year balances for net assets without donor restrictions and net assets with donor restrictions by creating a statement of activities for the period. The school has two program services: education and research. It also has two supporting services: fundraising and administration.