Roche Brothers is considering a capacity expansion of its supermarket. The landowner will build the addition to suit in return for $175,000 upon completion and a​ five-year lease. The increase in rent for the addition is $8,000 per month. The annual sales projected through year 5 follow. The current effective capacity is equivalent to​ 500,000 customers per year. Assume 2% percent pretax profit on sales.

YEAR : 1 2 3 4 5

Customers: 550,000 610,000 685,000 700,000 725,000

Avg sales/customer: $51.00   $53.00 $58.00 $60.00 $66.00

a) . If Roche expands its capacity to serve​ 700,000 customers per year now​ (end of year​ 0), what are the projected annual incremental pretax cash flows attributable to this​ expansion?

The projected annual incremental pretax cash flows attributable to this expansion in year 0 are

​$_______. enter your response as an integer.

The projected annual incremental pretax cash flows attributable to this expansion in year 1 are $_______.

The projected annual incremental pretax cash flows attributable to this expansion in year 2 are $__________

The projected annual incremental pretax cash flows attributable to this expansion in year 3 are $________>

The projected annual incremental pretax cash flows attributable to this expansion in year 4 are $ ________.

The projected annual incremental pretax cash flows attributable to this expansion in year 5 are $________.

b) If Roche expands its capacity to serve​ 700,000 customers per year at the end of year​ 2, the landowner will build the same addition for $230,000 and a​ 3-year lease at $11,000 per month. What are the projected annual incremental pretax cash flows attributable to this expansion​alternative?

The projected annual incremental pretax cash flows attributable to this expansion in year 2 are $________

The projected annual incremental pretax cash flows attributable to this expansion in year 3 are $________..

The projected annual incremental pretax cash flows attributable to this expansion in year 4 are $________.

The projected annual incremental pretax cash flows attributable to this expansion in year 5 are $________.

Starfax, Inc., manufactures a small part that is widely used in various electronic products such as home computers. Results for the first three years of operations were as follows (absorption costing basis):

In the latter part of Year 2, a competitor went out of business and in the process dumped a large number of units on the market. As a result, Starfax’s sales dropped by 20% during Year 2 even though production increased during the year. Management had expected sales to remain constant at 50,000 units; the increased production was designed to provide the company with a buffer of protection against unexpected spurts in demand. By the start of Year 3, management could see that it had excess inventory and that spurts in demand were unlikely. To reduce the excessive inventories, Starfax cut back production during Year 3, as shown below:

Additional information about the company follows:

1. The company’s plant is highly automated. Variable manufacturing expenses (direct materials, direct labor, and variable manufacturing overhead) total only $4.00 per unit, and fixed manufacturing overhead expenses total $540,000 per year.

2. A new fixed manufacturing overhead rate is computed each year based that year's actual fixed manufacturing overhead costs divided by the actual number of units produced.

3. Variable selling and administrative expenses were $3 per unit sold in each year. Fixed selling and administrative expenses totaled $80,000 per year.

4. The company uses a FIFO inventory flow assumption. (FIFO means first-in first-out. In other words, it assumes that the oldest units in inventory are sold first.)

Starfax’s management can’t understand why profits doubled during Year 2 when sales dropped by 20% and why a loss was incurred during Year 3 when sales recovered to previous levels.

Required:

1. Prepare a variable costing income statement for each year.

2. Refer to the absorption costing income statements above.

a. Compute the unit product cost in each year under absorption costing. Show how much of this cost is variable and how much is fixed.

b. Reconcile the variable costing and absorption costing net operating income figures for each year.

5b. If Lean Production had been used during Year 2 and Year 3, what would the company’s net operating income (or loss) have been in each year under absorption costing?

1:Prepare a variable costing income statement for each year.

2a: Compute the unit product cost in each year under absorption costing. Show how much of this cost is variable and how much is fixed. (Do not round intermediate calculations and round your final answers to 2 decimal places.)

2b: Reconcile the variable costing and absorption costing net operating income figures for each year. (Enter any losses or deductions as a negative value.)

5b: If Lean Production had been used during Year 2 and Year 3, what would the company’s net operating income (or loss) have been in each year under absorption costing? (Loss amounts should be indicated with a minus sign.)

When Crossett Corporation was organized in January Year 1, it immediately issued 4,300 shares of $50 par, 5 percent, cumulative preferred stock and 10,000 shares of $10 par common stock. Its earnings history is as follows: Year 1, net loss of $15,200; Year 2, net income of $119,000; Year 3, net income of $119,600. The corporation did not pay a dividend in Year 1.

Required
a. How much is the dividend arrearage as of January 1, Year 2?

b. Assume that the board of directors declares a $39,500 cash dividend at the end of Year 2 (remember that the Year 1 and Year 2 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders? (Amounts to be deducted should be indicated with minus sign.)
  

Baker manufacturing needs a new machine that costs $200,000. The company is evaluating whether it should lease or purchase the machine. The equipment falls into the MACRS 3-year class, and it would be used for 3 years and then sold, because the firm plans to move to a new facility at that time. The estimated value of the equipment after 3 years is $70,000. A maintenance contract on the equipment would cost $6,000 per year, payable at the beginning of each year. Alternatively, the firm could lease the equipment for 3 years for a lease payment of $59,000 per year, payable at the beginning of each year. The lease would include maintenance. The firm is in the 21% tax bracket, and it could obtain a 3-year simple interest loan, interest payable at the end of the year, to purchase the equipment at a before-tax cost of 8%. If there is a positive Net Advantage to Leasing the firm will lease the equipment. Otherwise, it will buy it. What is the NAL?

MACRS RATES (year 1 0.3333) (year 2 0.4445) (year 3 0.1481) (year 4 0.0741)

could you solve this with explanation?

The Atlanta Braves signed an outfielder to a five-year contract. The contract calls for the following cash flows:

• a signing bonus of $2.00 million today,
• $12.12 million in year 1,
• $13.32 million in year 2,
• $14.40 million in year 3,
• $15.01 million in year 4, and
• $16.01 million in year 5.

If the outfielder has a discount rate of 5.00% per year, what is the value of his contract today (in millions)? (Express answer in millions. $1,000,000 would be 1.00)

In evaluating a piece of equipment for its optimum replacement interval, the following table of marginal costs were calculated. Year 1 2 3 4 5 MC(year1) $11,755 (year 2)$12,390 (year 3)$12,750 (year 4) $12,955 (YEAR 5)$13,425 The best available technology on the market costs $30,000 with projected revenues of O&M of $10,000 and O&M starting at $2500 and increasing $2000 per year. If corporate MARR is 18%, what is your recommendation? [year]

Henderson company had a beginning-of-the-year total assets of 300,000 and total liablities of 180,000.

A) if during the year total assets increased by 15,000 and total liabilities increased by 40,000, what is the end-of-year total stockholders equity

B) if during the year total assets increased by 60,000 and total liabilities decreased by 5,000 what is the end-of-year total stockholders equity

C) if during the year the total liabilties increased by 40,000 and total stock holders equity increased by 35000 what are the end-of-year total assets

Find the present values of these ordinary annuities. Discounting occurs once a year. Round your answers to the nearest cent. $500 per year for 10 years at 12%. $ $250 per year for 5 years at 6%. $ $400 per year for 16 years at 0%. $ Rework previous parts assuming that they are annuities due. Round your answers to the nearest cent. $500 per year for 10 years at 12%. $ $250 per year for 5 years at 6%. $ $400 per year for 16 years at 0%. $