Yasmin Jamieson is 18 years old and is about to graduate from an Ottawa high school. She must decide: which university will she attend in September? She wants to follow a 4-year undergraduate degree in Economics. Yasmin has been accepted to attend McMaster University in Ontario, Canada, and Stanford University, California, United States. She faces only one annual cost for the each of the four years she is in university: tuition. Annual tuition at McMaster is $15,000. At Stanford, annual tuition is $45,000. Assume that she is not considering the option of working after high school. Therefore, do not consider the foregone labour earnings when going to university. After graduation, Yasmin has a strong interest in Labour Economics and hopes to receive job offers from Capital Economics (near Hamilton, Canada) and from Insight Economics (near Stanford, USA).

She knows that these two companies offer different annual salaries depending on where one has graduated. Capital Economics will offer a McMaster graduate an annual salary of $128,000 and a Stanford graduate an annual salary of $160,000. Insight Economics will offer a McMaster graduate an annual salary of $175,000 and a Stanford graduate an annual salary of $250,000.

Let’s assume the following:

• Yasmin’s objective in her decision-making is to maximize the present value of net future income over her career (that is, income net of costs).

• She is certain to get job offers from both companies.

• Please ignore differences between these two cities in terms of income taxes, the exchange rate, the cost of living and moving costs.

• These annual salaries do not change for the duration of her expected career, from age 22 to 65. Hint: this time horizon is sufficiently long to use the present value (PV) approximation formula.

• However, the present value of annual tuition costs should be calculated using the expanded present value formula.

• The market interest rate is 5%. Which university would you recommend to Yasmin? Please show all your calculations and explain your recommendation. (20 points)

Data for Tropical Enterprises? follows:

2019

2018

2017

Total Current Assets

$400,000

$300,000

$250,000

Total Current Liabilities

190,000

150,000

125,000

Compute the dollar amount of change and the percentage of change in Tropical ?Enterprises's working capital each year during 2019 and 2018. What do the calculated changes? indicate?

Begin by selecting the formula to compute the working? capital, the dollar amount of change and the percentage of change in Tropical ?Enterprises' working capital.

Working capital =__________________________________

Dollar amount of change = __________________________

Percentage of change = _________________________________

?First, calculate the amount and percentage of change in working capital in 2018. ?(Round the percentage to one decimal? place, X.X%.)

The amount of change in working capital is ________

The percentage of change in working capital is _________%

. ?Next, calculate the amount and percentage of change in working capital in 2019. ?(Round the percentage to one decimal? place, X.X%.)

The amount of change in working capital is__________ .

The percentage of change in working capital is_________ %.

What do the calculated changes? indicate?

Tropical ?Enterprises' working capital has ? -deteriorated or improved -year over year from 2017 to 2019.

Hurst Co. manufacturers and sells a single product. Price and cost data regarding this product are as follows: selling price $40 per unit variable manuf. cost $20 per unit variable selling& admin $6 per unit fixed MOH 208,000 per yr fixed selling and admin $325,000 per yr d. Using the current sales level of 43,500, what is the operating leverage? Use the operating leverage to predict the increase in net income if sales increase by 20%. Prove the percentage increase predicted by preparing a contribution margin format income statement.

1. Samsung TV sells for £299. The material cost is given as £55, labor cost as £20, and variable overhead as £25 per unit. Fixed production overhead for the year is £1.2million.

i. calculate the break even level of sale for Both Volume and Revenue.

ii. calculate the break even
Revenue using the C/S ratio

iii. if the budgeted sales revenue is £2.99million, calculate the margin of safety in units and as a percentage

iv. produce a break even chart using the above information

iv. how many Samsung TVs must be sold in order to achieve a profit of £500,000?

Total sales of ABC Corp. is $100 M and net income is $11.5M. The manager belives that eliminating the group marginal customers which constitutes 10% of the total sales, will increase the performance of the company. Distribute the revenue and expenses of BC Corp. between the marginal customers and credible customers, based on income statement, indicate whether the company should eliminate marginal customers or not, in terms of net profit margin.

Percentage of sales total/ fixed/ variable

Cost of sales (%) 70/ - /70

Overhead cost (%) 15/ 8/ 7

Collection exp.(%) 1 /-/ 1

Other exp. (%) 2.5/2/ 0.5

1. Suppose that the ABC Corporation has a production (and sales) capacity of $1,000,000 per month. Its fixed costs – over a considerable range of volume – are $350,000 per month, and the variable costs are $0.50 per dollar of sales.

1. What is the annual break even chart (D’)? Develop (graph) the break even chart.
2. What would be the effect on D’ of decreasing the variable cost per unit by 25% if the fixed costs thereby increased by 10%?
3. What would be the effect on D’ if the fixed costs were decreased by 10% and the variable cost per unit were increased by the same percentage?

We are evaluating a project that costs $836,559, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 62,175 units per year. Price per unit is $35, variable cost per unit is $19, and fixed costs are $418,916 per year. The tax rate is 35%, and we require a return of 22% on this project.

In percentage terms, what is the sensitivity of OCF to changes in the variable cost per unit projection? (Round answer to 2 decimal places. Do not round intermediate calculations)

Topic: Sensitivity Analysis

2. On January 1, 2018, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2019. Expenditures on the project were as follows:

Kendall borrowed $600,000 on a construction loan at 8% interest on January 1, 2018. This loan was outstanding throughout the construction period. The company had $2,000,000 in 5% bonds payable outstanding in 2018 and 2019. Kendall used the specific interest method.

Interest capitalized for 2018 was:

a. 48,000

b. 40,000

c. 32,000

d. 30,000

3. Pam & Co. exchanged land and $9,000 cash for equipment. The book value and the fair value of the land were $90,000 and $106,000, respectively.

Assuming that the exchange has commercial substance, Lowell would record equipment and a gain/(loss) of:

a. Equipment: 90,000

Gain/loss: (25,000)

b. Equipment: 99,000

Gain/loss: (16,000)

c. Equipment: 106,000

gain/loss: 25,000

d. Equipment: 115,000

gain/loss: 16,000

On March 1, Mocl Co. began construction of a small building. The following expenditures were incurred for construction:

The building was completed and occupied on July 1. To help pay for construction $215,000 was borrowed on March 1 on a 12%, three-year note payable. The only other debt outstanding during the year was a $2,000,000, 10% note issued two years ago.

Calculate the weighted-average accumulated expenditures. (Do not leave any answer field blank. Enter 0 for amounts.)

Calculate avoidable interest. (Round answer to 0 decimal places, e.g. 12,515.)

1. X Miami, is a residential tower (or a social living community as it's marketed) in Edgewater. It is designed around 2 principals: 1. Life's better with company and 2. You deserve to love your home. X Miami has rooftop yoga, a pool deck, and a "meet your neighbor" page on their website as means to facilitate social connection. The carefully curated tower took exceptionally long to build. To inform construction timelines of future social living communities in Miami, the board is interested in analyzing construction (feet) as a function of time (day). Assume the variables are linearly related.

1. Would a scatterplot be an appropriate graph to visualize the data? If so, why? If appropriate, sketch a graph of the data.

2. Calculate the prediction equation for the regression of Y on X. Interpret each of the coefficients.

3. Define: (a) Y'₁₈ (b) Y₁₈. Interpret these values.

d. Define Y'₂₀

4. r²= .998. Interpret this value. Explain why this value is so high.