1. You apply for a home equity loan. The lender gets an appraisal on your home, showing a value of $183,500. You have a first mortgage with a current balance of $87,435. Based on a 75% LTV ratio, what is the maximum line of credit you can get?

2. Assume you buy 100 shares of stock at a price of $63.75 per share and incur brokerage fees of $200. You own the stock for 5 years and receive dividends of 50 cents per share at the end of each quarter. Immediately after receiving the 20^th quarterly dividend, you sell the stock at a price of $48.63 per share and incur brokerage fees of $200. Calculate your rate of return. (IRR)

Kuzma​ Foods, Inc. has budgeted sales for June and July at $670,000.00 and $720,000.00​, respectively. Sales are 80​% ​credit, of which 60​% is collected in the month of sale and 40​%

is collected in the following month. What is the budgeted Accounts Receivable balance on July​ 31?

A. $230,400.00

B. $288,000.00

C. $214,400.00

D. $576,000.00

2)

​Camellia, a merchandising​ company, has provided the following extracts from their budget for the first quarter of the forthcoming​ year:

The company collects 60​% of credit sales in the same month and the balance in the next month. Calculate the collections from the customers for the month of February.

A. $406,000.00

B. $700,000.00

C. $504,000.00

D. $616,000.00

The spot term structure for T-Bills (proxy for the risk free rate) is as follows 30-Day T-Bill=7% per annum, 60-Day T-Bill=7.25% per annum, 90-Day T-Bill=7.5% per annum, 180-Day T-Bill=7.65% per annum and the 270-Day T-Bill=7.85% per annum all with continuous compounding. A stock pays $0.5 per quarter as dividends, the first dividend has just been paid and the current stock price is $50. What is the price of a 6-month At-the-Money European Put option on this stock if the volatility is 35%? Assume the year has 360 days.

You work for a manufacturing company and have just completed the budget process for the upcoming business year. At the end of the first quarter you take the actuals and compare them to the budget. You notice there are differences which need explanation and create the static and flexible budget variances. You present this to management and they request you to explain the variances in more detail.

Use your own calculations to create the Flexible Budget Performance Report and present this. You also need to explain the reasons for the variances and who is responsible. Explain the calculations used to create this report.

Explain why the variances using standard costs better reflect the actual variance and how to determine who is responsible for each variance

Shields Company is preparing its interim report for the second quarter ending June 30. The following payments were made during the first two quarters: Expenditure Date Amount Annual advertising January $ 808,000 Property tax for the fiscal year February 358,000 Annual equipment repairs March 268,000 One-time research and development fee to consultant May 98,000 Required: For each expenditure, indicate the amount that would be reported in the quarterly income statements for the periods ending March 31, June 30, September 30, and December 31. Quarters Ending March 31 June 30 September 30 December 31 Advertising Property tax Equipment repairs Research and development

Hakim Sdn Bhd manufacturers water filtration system products that are used in both residential and commercial building. One of its products named product B is made using two different raw materials and two types of labour. The company operate a standard absorption costing system and now preparing its budgets for the first quarter for the year ending 31 December 2020.

In order to produce one unit of product B, two types of materials are required namely material X and Y. One unit of product B needs 5 kgs of material X at cost RM4 per kg. As for material Y, 3 kgs are needed at cost RM7 per kg.

Annual overheads are RM280,000. 40% of these overheads are fixed and the reminder for variable overhead. Fixed overheads are absorbed on a unit basis.

As for company’s inventory policy, closing inventory of finished goods is 30% of the following month’s sales volume and closing inventory of materials is 45% of the following month’s materials usage. Closing inventory as of 31 December 2019 for finished goods are 500 units, material X and Y are 1,500 kgs and 1,700 kgs respectively.

The selling price of the Product B is RM220 per unit. The following information has been identified for Product B.

The sales forecast for the year 2020 are as follows:

Months sales volume (units)

January 2250

February 2050

March 1650

April 2050

May 1250

June 2050

The management teams are concerned that Hakim Sdn Bhd has recently faced intense competition in the marketplace for Product B. Consequently, there have been issues concerning the availability and costs of specialized materials and employees needed to manufacture Product B, and there is concern that these might cause a problem in the current budget setting process.

Required:

Almost every organization, regardless of size, complexity or sector, depends heavily on budgets and budgetary systems to achieve their strategic goals since it involves the establishment of predetermined goals, the reporting of actual performance results and evaluation of performance. in terms of the predetermined goals. Define and discuss the functions of budget committee that can be implemented in Hakim Sdn Bhd to improve the preparation of their budgeting process.

Evergreen Corporation is preparing the master budget for the third quarter ending March 31, 2009.  It sells a single product for $20 a unit.  Sales are 25% cash and 75% credit.  The credit sales are collected 30% in the month of the sale and the remaining 70% is collected in the next month.  No credit sales occurred in December 2008. The December 31 inventory of finished goods is 15,000 units and projected sales are 20,000, 55000, 65,000, 75,000, and 85,000 units for the first  months of the year.  The desired ending inventory for each month is 35% of the next month's sales. The inventory of Finished Goods expected to be on hand on April 30 is 10,500 units.  Each Finished Unit requires 2 kilograms of materials at a cost of $1.00 per kilo and it takes 15 minutes to complete one unit.  Evergreen anticipates having 20,000 kilos of materials on hand at December 31, 2008.  The company requires 15% of the next month production materials needs to be available before the start of the month.  Labour is paid at the rate of $9.00 per hour and is paid when incurred.  Production overhead is incurred based on units of production and costs $1.50 per unit. Sixty percent of the purchases are paid in the month of purchase and 40% are paid in the following month.  Purchases in December 2008 were $232,500.

Operating expenses are paid in the month incurred and consist of sales commissions (8% of sales), shipping cost (4% of sales), office salaries of $15,000 a month, advertising of $2,800 per month,  and amortization of $3,200 per month, and other miscellaneous expenses of $4,500 per month.  The cash balance must not be negative. The beginning cash balance is $48,000.  Loans are obtained at the end of the month in which a cash shortage occurs and are made in even multiples of $1,000.  Interest is 1% per month based on the beginning-of-month loan balance and must be paid at the end of each month when the loan is repaid.   Evergreen paid $4,000 in cash dividends in January and purchased land for $150,000 in March paying cash.