Banana Tires (BT), a U.S.-based multi-national company, has screened several acquisition targets in Malaysia. BT has identified a Malaysian company, KL Rubber, which would provide a good strategic fit for BT. The estimates for revenue for the next year are MYR 200 million. Revenues are expected to increase by 6% into the foreseeable future (in MYR).

Expenses are expected to be 65% of revenue. The tax rate on the firm's earnings is expected to be 35%. Assume that there is no depreciation.

This exchange rate is currently $.2255 per MYR. Inflation is expected to average 6.5% in Malaysia and 2.0% in the U.S. BT has estimated their cost of capital for this project to be 12.5% (in terms of USD).

What is the maximum that BT should pay for KL Rubber? (4 points)

Support SUPERTEL, a new Telecommunication company, in calculating the Lifetime Value per customer based on the following assumptions: Perform the necessary calculations (A THROUGH K NEEDS TO BE CALCULATED):

You are a marketing manager at a purse retailer. Last year you sold 1,300 purses at a price of $430 per purse. Your fixed costs are $50,000 and it costs you $110 to make each purse.

Calculate: Total revenue, average revenue, total cost, and unit variable cost.

Did you make a profit last year? How much?

You are deciding whether or not to participate in a national association of “Purse parties”, where all the attendees have to purchase your purse. Each party will cost you $1500. The expected number of attendees for each party is 30 women. You are also required by your boss to make a profit of at least $8000 by participating in each party.

Should you participate? Why or why not?

We have 3,000 Units of product to sell over a five day period. From historical sales data, we have estimated the following demand curves

P=price/unit in $

Q=number of units sold

Day 1: P=10-0.01Q valid for prices between $3and $8.

Day 2: same as Day 1

Day 3: P= 15-0.01Q valid for prices between $6 and $10

Day 4 P=20-0.01Q valid for prices between $6 and $12

Day 5: same as Day 1

1. The revenue maximizing price for day 3 is______ and quantity sold is _______.

2. The revenue maximizing price for day 4 is ______ and quantity sold is _______.

Expert Answer

Indigo River Packaging is considering a project that would last for 2 years and have a cost of capital of 17.88 percent. The relevant level of net working capital for the project is expected to be 24,000 dollars immediately (at year 0); 26,000 dollars in 1 year; and 0 dollars in 2 years. Relevant expected revenue, costs, depreciation, and cash flows from capital spending in years 0, 1, and 2 are presented in the following table (in dollars). The tax rate is 50 percent. What is the net present value of this project?

JACK’s Fish House is a family-owned restaurant that specializes in German-style seafood. Data concerning the restaurant’s monthly revenues and costs appear below (q refers to the number of meals served):

Prepare the restaurant’s planning budget for April assuming that 1,800 meals are served.

Assume that 1,700 meals were actually served in April. Prepare a flexible budget for this level of activity.

The actual results for April appear below. Prepare a flexible budget performance report for the restaurant for April.

- On December 31, 2018, State Construction Inc. signs a contract with the state of West Virginia Department of Transportation to manufacture a bridge over the New River. State Construction anticipates the construction will take three years. The company’s accountants provide the following contract details relating to the project:

During the three-year construction period, State Construction incurred costs as follows:

State Construction uses the percentage of completion method to recognize revenue.

How much revenue should State Construction recognize in

2019          __________________

2020          __________________

2021          __________________

The following information relates to YogaGuru for the year ended 30 June 2020.

Required: Prepare an Income Statement , a fully classified Balance Sheet in narrative format and a Statement of Changes in Equity for the year ended 30 June 2020 for YogaGuru.

Income Statement:

Fully narrative Balance Sheet:

Statement of Changes in Equity

You have been asked to review the December 31, 2021, balance sheet for Champion Cleaning. After completing your review, you list the following three items for discussion with your superior: An investment of $33,000 is included in current assets. Management has indicated that it has no intention of liquidating the investment in 2022. A $130,000 note payable is listed as a long-term liability, but you have determined that the note is due in 10, equal annual installments with the first installment due on March 31, 2022. Deferred revenue of $69,000 is included as a current liability even though only two-thirds will be recognized as revenue in 2022, and the other one-third in 2023. I need these numbers put into the appropriate classification please.

Hospital Equipment Company (HEC) acquired several fMRI machines for its inventory at a cost of $3,600 per machine. HEC usually sells these machines to hospitals at a price of $6,960. HEC also separately sells 12 months of training and repair services for fMRI machines for $1,740. HEC is paid $6,960 cash on November 30 for the sale of an fMRI machine delivered on December 1. HEC sold the machine at its regular price, but included one year of free training and repair service. Required: For the machine sold at its regular price, but with one year of “free” training and repair service, determine the dollar amount of revenue earned from the equipment sale versus the revenue earned from the training and repair services.