Horse Heaven Farm began 20X6 with cash of 180,000. During the year, Horse Heaven earned service revenue of 600,000 and collected 480,000 from customers. Expenses for the year totaled 330,000, with 300,000 paid in cash to suppliers and employees. Horse heaven also paid 138,000 to purchase equipment and a cash dividend of 47,000 to shareholders. During 20X6, Horse Heaven borrowed 25,000 by issuing a note payable. Prepare the company's statement of cash flows for the year. Format operating activities by the direct method. Calculate Horse's free cash flow and cash realization ratio.

A car manufacturer is offering the following incentive with any purchase of its new 2019 mid- size sedans at one of its affiliated dealerships. The vehicle sells for $24,000. Free maintenance services for 2 years at the dealership

Assume there are no other promotions running during this time. The car manufacturer estimates that the normal selling price for the maintenance services it will provide to customers, on average, over the two year period under this promotion is $1,000. Assuming the customer pays $24,000 for the vehicle, how much revenue is recognized on the sale date? You can ignore the time value of money.

ABC Company is considering a 3-year project, which will add a new product to its portfolio; last year, the company hired a consultant to explore this market opportunity and paid $1 million for the research report - this amount will be depreciated over the next four years; if the company proceeds with the launch of the new product, it will need to invest $26.0 million in new equipment, which will be depreciated straight line over 4 years with no remaining salvage value.

-The project is expected to generate $12 million in sales (revenue) in the first year of the project; the sales are expected to increase by 50% in the second year, double in year 3 compare to year 2, and double again in year 4.  

-COGS is expected to be 55% of sales

-SG&A expenses will be $5.5 million each year

-The company pays income tax rate of 23.0%

-The cost of capital is 9.7%

-Working capital will start from zero and reach 20% of sales by the end of the first year and will stay at 20% of sales each year though the end of the project; working capital will be fully recovered at the end of the project;

Calculate the following:

1) Free cash flows of the project

2) NPV

3) IRR

4) Payback period

5) should the company invest in this project?

The following balance sheet was prepared by the bookkeeper for Jacuzi Company as of December 31, 2017. Jacuzi Company Balance Sheet as of December 31, 2017 Cash $ 80,000 Accounts payable $ 75,000 Accounts receivable (net) 52,200 Bonds payable 100,000 Inventory 57,000 Stockholders' equity 218,500 Investments 76,300 Equipment (net) 96,000 Patents 32,000 $393,500 $393,500 The following additional information is provided: 1. Cash includes the cash surrender value of a life insurance policy $9,400, a bank overdraft of $2,500 has been deducted. Cash also includes petty cash of $725. 2. The net accounts receivable balance includes: (a) accounts receivable—debit balances $60,000 from normal sales to customers; (b) accounts receivable—credit balances $4,000 for sales returns by customers; (c) allowance for doubtful accounts $3,800. 3. Inventory does not include goods costing $3,000 shipped out on consignment. Accounts receivables of $3,000 were recorded on the goods that were consigned.. 4. Investments include common stock of Ford Motor Company $19,000, vacant land held for future use $48,300, and “goodwill” of $9,000. 5. Equipment costing $5,000 with accumulated depreciation $5,000 is still being used by the company. Accumulated depreciation on the remaining equipment is $40,000. 6. Stockholders’ equity consists of Common Stock $150,000, Retained Earnings of $80,400 and Treasury Stock of $11,900. Required Prepare a corrected “classified” balance sheet in good form.

The manufacturer of a certain electronic component claims that they are designed to last just slightly more than 4 years because they believe that customers typically replace their device before then. Based on information provided by the company, the components should last a mean of 4.24 years with a standard deviation of 0.45 years. For this scenario, assume the lifespans of this component follow a normal distribution

3) The company considers a component to be “successful” if it lasts longer than the warranty period before failing. They estimate that about 70.3% of components last more than 4 years. They find a random group of 10 components that were sold and count the number of them which were “successful,” lasting more than 4 years.

a. What is the expected number of these 10 components that will last more than 4 years? (Round your answer to 1 decimal place.)

b. What is the standard deviation for the number of these 10 components that will last more than 4 years? (Round your answer to 1 decimal place.)

c. What is the probability that no more than 6 of these components will last more than 4 years?

4) The company is not satisfied with how many returns they are processing, and accountants in the company are recommending that they change the warranty period. The accountants suggest basing the period of the warranty on making sure, in the long run, only about 5% of customers will return the component. What amount of time corresponds to the shortest 5% of lifespans for this component? (Round your answer to 1 decimal place.)

Splish sells its specialty combination gas/wood-fired grills to local restaurants. Each grill is sold for $1,550 (cost $600) on credit with terms 2/20, net/60.

Prepare the journal entries for the sale of 30 grills on August 1, 2021, and upon payment, assuming the customer paid on (1) August 20, 2021, and (2) September 29, 2021. Assume the company records sales net.

Valuing a Stock with Three-Stage Dividend Discount Model Mocha-Cola In the morning of Tuesday, January 3rd 2004, Robert Smart, a security analyst at Armani Investment was reviewing the 2003 financial statements of Mocha-Cola as requested by one of their most important clients, Mr. Jin Qian. Mr. Jin Qian has accumulated a significant amount of wealth through Armani’s recommendations in the past and now he was interested in investing a sizeable amount of his wealth into Mocha-Cola stocks. Mocha-Cola, the world famous soft drink company, was able to increase its market value consistently over the last several decades. While Mocha-Cola’s growth in the domestic soft drink market has leveled off in the past few years due to aggressive marketing campaigns of its competitors (especially by TipsyCola), the analysts expect that the firm will continue to expand thanks to the introduction of new products and increased demand for Mocha-Cola products by international markets. The initial analyses carried by Robert Smart revealed that Mocha-Cola reported earnings per share of $3.00 in 2003, and paid dividends per share of $0.75. Mr. Smart asked his assistant, Paul Brook, to gather further information on Mocha-Cola as reported by other analysts. Paul’s summary of analyst reports indicated that Mocha-Cola’s earnings would grow at their extraordinary level of 20% at least for the next five years (from 2004 to 2008). While Mr. Smart concurs with this expectation, he thinks that it should decline linearly each year after the high growth period to a stable growth rate of 5% in 2013 due to severe competition in the soft-drink industry. Paul Brook also noted that according to analysts’ reports payout ratio was expected to remain unchanged from 2004 to 2008, after which it would increase each year equally to reach its steady state value of 80% in 2013. By the end of the day, Mr. Smart was already tired and overwhelmed with the amount of information accumulated. He asked Paul to calculate the stock price of MochaCola by using three-stage dividend discount model and assuming a 15% required rate of return. The results were expected to be ready for presentation by 10:00 a.m. on Wednesday. While Paul was very proficient in terms of putting necessary inputs together as he did in this task, he had never actually run the three-stage dividend discount model on his own. He took another sip from his coffee and got ready to prepare a full, fresh pot that he was going to need for the rest of the night.

Please show excel formulas !

     The product development group of a high-tech electronics company developed five proposals for new products. The company wants to expand its product offerings, so it will undertake all projects that are economically attractive at the company’s interest rate of 15% per year. The cash flows (in $1000 units) associated with each project are estimated. Which projects, if any, should the company accept on the basis of a present worth analysis?

Your manager is proposing a new investment. If the company pursues the investment, it will cost $300,000 today. It has an expected life of 10 years and no salvage value. Annual expenses are estimated to be $30,000 per year. Annual revenue increases are estimated to be $70,000 per year. Your company must borrow 1/3 of the investment cost. The bank has agreed to six equal annual payments, with the first payment due at the end of year 1. The company's MARR is 10% compounded annually. The loan interest rate is 12% compounded annually.

create in excel file

a) How much is the loan payment?

b) What is the present worth of this investment opportunity?

c) Based on the present worth analysis, should the company make the investment? Why or why not?