Your company is a global seller or home furnishings called Worldwide Home Stuff Unlimited (WHSU). (Yes, they need some more creative people in their company.) Complete a seven-year planning model for WHSU for the period 2016 through 2022. Use the structure shown at the end of this assignment. Proceed as follows:

1. Take the 2016, 2017, and 2018 values from the data at the end of this assignment. Enter the ACTUAL VALUES even for the various lines that can be calculated from other lines (e.g., the Gross Profit or the EBT).

2. Place all growth rates and other input variables at the top left corner of the worksheet. Use formulas and/or functions to perform all necessary calculations.

   Important Note: Most or all of the growth factors and other input values you will be using in this model are calculated in steps 3 through 7 below. So put the formulas for calculating these values in the appropriate cells at the top left corner of the worksheet.

3. Starting with 2019 and beyond, for the following line-items (a thru d below), assume a constantPERCENTAGE growth from one year to the next—e.g., from 2018 to 2019. That percentage change is equal to the Average Annual Percentage Change from 2016 to 2018. Calculate this value by averaging the percentage change from 2016 to 2017 and the percentage change from 2017 to 2018.

   1. Net Sales/Sales Revenue

   2. Selling, General, and Administrative (SG&A)

   3. Depreciation and Amortization

   4. Other Expenses

4. Starting with 2019 and beyond, assume that Advertising will change by the same dollar amount (not the same percentage) from one year to the next—e.g., from 2018 to 2019. That amount is equal to the Average Annual Change (in dollars) between 2016 and 2018.

5. Starting with 2018 and beyond, assume that Rent Expense will be unchanged (that is, constant) from one year to the next, so the values in 2019 through 2022 will be the same as the 2018 value.

6. Assume that the Cost of Goods Sold (CGS) as a percentage of Net Sales/Sales Revenue (that is, the ratio of CGS to Net Sales) will be constant in years 2018 through 2022 and equal to the percentage in 2018. You will need to calculate that percentage (ratio).

7. Assume that the tax rate will be constant in years 2018 through 2022 and equal to the tax rate in 2018. You will need to calculate that value (that is, the tax expense as a percentage of the EBT).

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8. Note that your formulas should allow for the possibility that your company may lose money in any given year (whether or not it is not the case with the current data).

9. Be sure to note somewhere on the spreadsheet that all figures are in millions.

10. Format financial data with commas (but no decimal places), using dollar signs only for the Net Sales/Sales Revenue, Gross Profit, Total Expenses, Earnings Before Taxes, and Net Income lines. Format growth rates as percentages. Properly format all columns and numbers.

11. When creating the spreadsheet, be sure to copy cell formulas rather than entering similar formulas many times (for example, you can use the autofill handle to copy cell formulas from year to year).

12. Use Excel to place a footer on your spreadsheet with your last name and section (e.g., Jones—INSY 2299 RZQ—where you substitute your last name for Jones and your section for RZQ).

Be sure to follow these instructions carefully!

On December 31, 2021, L Inc. had a $1,800,000 note payable outstanding, due July 31, 2022. L borrowed the money to finance construction of a new plant. L planned to refinance the note by issuing long-term bonds. Because L temporarily had excess cash, it prepaid $530,000 of the note on January 23, 2022. In February 2022, L completed a $3,300,000 bond offering. L will use the bond offering proceeds to repay the note payable at its maturity and to pay construction costs during 2022. On March 13, 2022, L issued its 2021 financial statements. What amount of the note payable should L include in the current liabilities section of its December 31, 2021, balance sheet?

Multiple Choice

• $0.

• $1,800,000.

• $530,000.

• $1,270,000

A county is considering using a piece of parkland for one of two alternative recreation projects. Project S would require construction costs of $2 million (year 0) and generate net benefits of $1 million per year for 10 years. (Assume the benefits are realized at the ends of years 1 through 10). Project L would require construction costs of $15.5 million and generate net benefits of $2 million per year for 20 years. (Assume the benefits are realized at the ends of years 1 through 20). If these figures are in real dollars, and the real discount rate is 8 percent: Find the NPV, IRR, PI, Discounted Payback Period, Regular Payback Period, and AEA for each of the two alternatives. Which project would the county select?

On December 31, 2019, Ayayai Inc. borrowed $3,720,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $446,400; June 1, $744,000; July 1, $1,860,000; December 1, $1,860,000. The building was completed in February 2021. Additional information is provided as follows. 1. Other debt outstanding 10-year, 14% bond, December 31, 2013, interest payable annually $4,960,000 6-year, 11% note, dated December 31, 2017, interest payable annually $1,984,000 2. March 1, 2020, expenditure included land costs of $186,000 3. Interest revenue earned in 2020 $60,760 (a) Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building.

Company Corp. is constructing a building. The following information pertains to the construction of the building. prepare journal entries 1) On 1/1/2015, company borrows $2,400,000 at 12% for 8 years to finance the new construction project. Payments are due quarterly with the first due date falling on 3/31/2015. Prepare the journal entries for each quarter’s payment. 2) Expenditures made on the project during 2015 are as follows: 1/1/2015 of $300,000; 5/1/2015 of $400,000; 7/1/2015 of $1,100,000; 10/1/2015 of $400,000. Journalize these capital expenditures. 3) Make the adjusting entry for capitalization of interest. Put the capitalized interest in the PP&E Subledger. Company Corp has $4,500,000 of general debt outstanding at 11% during 2015.

Pikton plc, a company with a 31st Dec year-end, had the following general borrowings in place at the beginning and end of 20X6. 1 January 20X6 31 December 20X6 £m £m 10% Bank loan repayable 20X8 120 120 9.5% Bank loan repayable 20X9 80 80 On 1 March 20X6, Pikton plc began construction of a qualifying asset, a piece of machinery for a hydro-electric plant, using existing borrowings. Expenditure drawn down for the construction was £30million on 1 March 20X6 and £20million on 1 October 20X6.

(a) Calculate the weighted average borrowing rate (also known as the capitalisation rate)

(b) Calculate the amount of borrowing costs that can be capitalised for the hydro-electric plant machine for the year ending 31st December 20X6.

Case 3 – Corporate Risk Management

1. A manufacturing company of consumer products that is based in Japan is considering entering new market in a Latin American country by exporting its products for sale there. Explain various risks it faces from expanding its market! Provide an example of each risk explained (10%)
2. Hellenistic Cruise is purchasing three new cruise ships to build sequentially. The first ship will commence construction today and take one year to build. The second will then be started. Hellenistic Cruise can cancel order for a given cruise ship at any time before construction begins for a small fee. Explain the real options should be considered in this situation! (10%)
3. Explain how a company manage its risk to face a global pandemic, such as Covid19, currently! (15%)update