You are a nonprofit manager and you are preparing for the upcoming fiscal year. You are in charge of leading the budget process for the organization. Briefly describe how you would start to prepare the organization’s budget. What considerations would you need to take into account? Who would you involve in the process? What are the timeline and key activities of the budget process? Once your budget is developed, what steps would you take to ensure the organization is on track to meet its budget?
Preparing a Budget
o Describe the key steps you would take to prepare your nonprofit organization’s budget. Cite at least one academic source to support your response.
o Discuss the considerations that you would need to take into account when preparing the nonprofit organization’s budget. Cite at least one academic source to support your response.
o Describe individuals involved in the budgeting process. o Outline the budgeting process timeline and key activities.
Ongoing
o Describe the steps you would take to ensure the organization is on track to meet its budget.
In: Accounting
1.) What is the depreciation expense in Year 1 (in $s) and after tax OCF in year 1?
2.) What is the depreciation expense in Year 2 (in $s) and after tax OCF in year 2?
3.) What is the depreciation expense in Year 3 (in $s) and after tax OCF in year 3?
4.) What is the after tax salvage value of the equipment at the end of year 3
5.)What is the terminal cash flow (the last cash flow of the project not including the OCF)?
6.) What is the initial investment in this project (enter as a negative number)?
7.) What is the projects NPV?
Frito Lay is considering a new line of potato chips. This will be a three year project.
a. Frito Lay paid $1,000,000 last year to a winning person who thought of the new line of potato chips.
b. New equipment will cost $6,000,000 and depreciation is by the 3-year MACRS method. Purchase of the equipment will require an increase in net working capital of $600,000 at time 0 (which will be recaptured at the end of the project).
c. The new potato chips will generate an additional $5,000,000 in revenues in the first year, $4,000,000 in revenues in in the second year, and $2,000,000 in revenues the third (final) year revenues.
d. In addition to the additional revenues outlined in c. The new potato chips will decrease existing chip line revenues by $2,000,000 the first year, $1,000,000 the second year, and $500,000 the third year.
e. The new project is estimated to have expenses of $150,000 each year.
f. At the conclusion of the project, the equipment can be sold for $1,000,000.
g. The firm’s marginal tax rate is 20 percent, and the project’s cost of capital is 10 percent.
The following is the MACRS Depreciation Table:
|
Year |
3-year |
5-year |
7-year |
|
1 |
33.33% |
20.00% |
14.29% |
|
2 |
44.44% |
32.00% |
24.49% |
|
3 |
14.82% |
19.20% |
17.49% |
|
4 |
7.41% |
11.52% |
12.49% |
|
5 |
11.52% |
8.93% |
|
|
6 |
5.76% |
8.93% |
|
|
7 |
8.93% |
||
|
8 |
4.45% |
In: Finance
In: Accounting
different cash flow. given the following cash flow at the end of each year, what is the future value of this cash flow at 3%, 9%, and 18% interest rates at the end of year 7?
year
1.
$15,000
year
2.
$20,000
year
3.
$29,000
year4 through 6. $0
year
7.
$130,000
In: Finance
Determine the internal rate of return for a project that costs -$149,500 and would yield after-tax cash flows of $23,000 the first year, $25,000 the second year, $28,000 the third year, $30,000 the fourth year, $34,000 the fifth year, and $40,000 the sixth year.
Question 28 options:
|
4.79% |
|
|
4.29% |
|
|
5.08% |
|
|
4.12% |
|
|
5.35% |
In: Finance
Quality Improvement and Profitability Objective Gagnon Company reported the following sales and quality costs for the past four years.
Assume that all quality costs are variable and that all changes in the quality cost ratios are due to a quality improvement program.
Year Sales Revenues Quality Costs as a Percent of Revenues (I only need the answer to the third required part in bold please)
Year 1 $9,600,000 30%
Year 2 10,400,000 27%
Year 3 12,320,000 23%
Year 4 15,320,000 19%
Required: 1. Compute the quality costs for all four years. Quality Cost Year
Year 1 $ 2,880,000
Year 2 $ 2,808,000
Year 3 $ 2,833,600
Year 4 $ 2,910,800 (These answers are correct.)
By how much did net income increase from Year 1 to Year 2 because of quality improvements? $ 312,000 (correct)
By how much did net income increase from Year 2 to Year 3 because of quality improvements? $ 492,800 (correct)
By how much did net income increase from Year 3 to Year 4 because of quality improvements? $ 612,800 (correct)
Required 2. The management of Gagnon Company believes it is possible to reduce quality costs to 3 percent of sales. Assuming sales will continue at the Year 4 level, calculate the additional profit potential facing Gagnon. $ 2,451,200 (correct)
Is the expectation of improving quality and reducing costs to 3 percent of sales realistic? Yes (correct)
Required 3. Assume that Gagnon produces one type of product, which is sold on a bid basis. In Years 1 and 2, the average bid was $200. In Year 1, total variable costs were $120.00 per unit. In Year 3, competition forced the bid to drop to $160.00. Do not round the intermediate calculations and round your final answers to the nearest dollar.
Compute the total contribution margin in Year 3 assuming the same quality costs as in Year 1. $
Now, compute the total contribution margin in Year 3 using the actual quality costs for Year 3. $
What is the increase in profitability resulting from the quality improvements made from Year 1 to Year 3? $
I need the third part in bold more than anything. Thank you for your time.
In: Accounting
Different cash flow. Given the following cash inflow at the end of each year, what is the future value of this cash flow at 6%, 11%, and 18% interest rates at the end of year 7?
|
Year 1: |
$16,000 |
|
Year 2: |
$19,000 |
|
Year 3: |
$30,000 |
|
Years 4 through 6: |
$0 |
|
Year 7: |
$150,000 |
In: Finance
Different cash flow. Given the following cash inflow at the end of each year, what is the future value of this cash flow at 7%, 12%, and 14% interest rates at the end of year 7?
|
Year 1: |
$16,000 |
|
|
Year 2: |
$18,000 |
|
|
Year 3: |
$29,000 |
|
|
Years 4 through 6: |
$0 |
|
|
Year 7: |
$130,000 |
In: Finance
Find the inflation rate based in the information presented in the table below. For you calculations assume a fix consumption basket consisting of 3 footballs and 4 basketballs, and year 1 as the base year.
|
Year |
Price of Footballs |
Price of Basketballs |
|
Year 1 |
$10 |
$12 |
|
Year 2 |
12 |
15 |
|
Year 3 |
14 |
18 |
In: Economics
A firm is considering a project that requires an initial investment of $420,000. The life of this project is five years. Cash flows for each year are estimated as follows: Year 1 Year 2 Year 3 Year 4 Year 5 $180,000 $220,000 $160,000 -$20,000 -$80,000 If the cost of capital of this project is 8%, what is the payback period of this project?
In: Finance