Revenue for the year Sh.1,500,000
Costs as percentages of sales %
Direct materials 30%
Direct labour 25%
Variable overheads 10%
Fixed overheads 15%
Selling and distribution 5%
On average:
(a) Accounts receivable take 2.5 months before payment.
(b) Raw materials are in inventory for three months.
(c) Work in progress represents two months' worth of half produced goods.
(d) Finished goods represents one month's production.
(e) Credit is taken as follows:
(i) Direct materials 2 months
(ii) Direct labour 1 week
(iii) Variable overheads 1 month
(iv) Fixed overheads 1 month
(v) Selling and distribution 0.5 months
Work in progress and finished goods are valued at material, labour and variable expense cost.
Required
Compute the working capital requirement of Corn Co assuming the labour force is paid for 50 working weeks a year
In: Finance
| The Mortenson Company has the following account balances: | |||||||||
| Cost of Goods Sold | 120,000.55 | ||||||||
| Interest Revenue | 5,000.45 | ||||||||
| Loss on Asset Disposal | 12,000.11 | ||||||||
| Sales Revenue Refund | 9,000.54 | ||||||||
| Operating Expenses | 46,000.87 | ||||||||
| Sales Revenue | 200,000.59 | ||||||||
| In Mortenson's multiple-step income statement, what will be the value of the gross profit/margin? | |||||||||
| John won the lottery that will pay him $100,000.00 at the end of each of the next 20 years. | ||||||||
| Assuming an appropriate interest rate is 8% compounded annually, how much is this | ||||||||
| total lottery winnings worth today? | ||||||||
In: Accounting
Required information
Information for Pueblo Company follows:
| Product A | Product B | ||||
| Sales Revenue | $ | 48,000 | $ | 61,000 | |
| Less: Total Variable Cost | $ | 10,000 | $ | 18,340 | |
| Contribution Margin | $ | 38,000 | $ | 42,660 | |
The total fixed costs are $42,000.
Determine target sales needed to earn a $21,000 target profit.
In: Accounting
Your company, Dominant Retailer, Inc., is considering a project whose data are shown below. Revenue and cash operating expenses are expected to be constant over the project's 5 year expected operating life; annual sales revenue is $95,000.00 and cash operating expenses are $37,500.00. The new equipment's cost and depreciable basis is $135,000.00 and it will be depreciated by MACRS as 5 year property. The new equipment replaces older equipment that is fully depreciated but can be sold for $7,500. In addition, the new equipment requires an additional $5,000 of net operating working capital, which can be fully recovered at the end of the project. The new equipment is expected to be sold for $10,995 at the end of the project in year 5. The marginal tax rate is 28.00%. What is the project's Initial Cash Outlay at Year 0? Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.
Using the information from problem 2 on Dominant Retailer, Inc., what is the NPV of the Project if Dominant Retailer’s WACC is 12.75%? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.
In: Finance
Brian and Company is a consulting group that offers fool-proof pricing and revenue optimization Service guaranteed to deliver $2M in Benefit to a customer. It cost Brian and Company $550k to provide this service. Unfortunately, they have a competitor, Dissenture that provides a similar, but somewhat inferior service that only delivers $1.5 M in guaranteed benefit. It also cost Dissenture $500k to provide this service. When competing with Dissenture, what price does Brian and company need to charge in order to guarantee that they win the business? Assume that neither Dissenture nor Brian and company will price below cost and that both of them know each other’s costs and the customer benefits in each case. How would Brian’s price need to change if it only cost Dissenture $400K to provide their service?
In: Operations Management
Dana Company projects a sales revenue of $150,000 during the calendar year 2014. Using the income statement provided below, prepare a pro-forma income statement using the percent-of-sales method.
Income Statement
Dana Dairy Products
For the Year Ended December 31, 2013
| Sales Revenue | 100,000 |
| Less: Cost of Good Sold | 87,000 |
| Gross Profits | 13,000 |
| Less: Operating Expenses | 11,000 |
| Operating Profits | 2,000 |
| Less: Interest Expense | 500 |
| Net Profits before taxes | 1500 |
| Less: Taxes (40%) | 600 |
| Net Profits after taxes | 900 |
In: Finance
Common-Sized Income Statement
Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages.
| Tannenhill Company |
Electronics Industry Average |
||||
| Sales | $1,430,000 | 100 | % | ||
| Cost of goods sold | 815,100 | 60 | |||
| Gross profit | $614,900 | 40 | % | ||
| Selling expenses | $386,100 | 24 | % | ||
| Administrative expenses | 143,000 | 10 | |||
| Total operating expenses | $529,100 | 34 | % | ||
| Operating income | $85,800 | 6 | % | ||
| Other income | 28,600 | 2 | |||
| $114,400 | 8 | % | |||
| Other expense | 14,300 | 1 | |||
| Income before income tax | $100,100 | 7 | % | ||
| Income tax expense | 42,900 | 3 | |||
| Net income | $57,200 | 4 | % | ||
a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. If required, round percentages to one decimal place. Enter all amounts as positive numbers.
| Tannenhill Company | |||
| Common-Sized Income Statement | |||
| For the Year Ended December 31 | |||
| Tannenhill Company Amount | Tannenhill Company Percent | Electronics Industry Average | |
| Sales | $1,430,000 | % | 100.0% |
| Cost of goods sold | 815,100 | % | 60% |
| Gross profit | $614,900 | % | 40% |
| Selling expenses | $386,100 | % | 24% |
| Administrative expenses | 143,000 | % | 10% |
| Total operating expenses | $529,100 | % | 34% |
| Operating income | $85,800 | % | 6% |
| Other income | 28,600 | % | 2% |
| $114,400 | % | 8% | |
| Other expense | 14,300 | % | 1% |
| Income before income tax | $100,100 | % | 7% |
| Income tax expense | 42,900 | % | 3% |
| Net income | $57,200 | % | 4% |
b. The company is managing the cost of manufacturing product than the industry, and has slightly selling and administrative expenses relative to the industry. The combined impact causes net income as a percent of sales to be than the industry average.
In: Accounting
Problem C The following data are for Toy Company:
|
December 31 |
||
|
Current |
Prior |
|
|
Prepaid expenses |
$34,500 |
$45,000 |
|
Accrued liabilities (short term) |
210,000 |
186,000 |
|
Cash in Bank |
1,095,000 |
975,000 |
|
Wages payable |
-0- |
37,500 |
|
Accounts payable |
714,000 |
585,000 |
|
Merchandise inventory |
1,342,500 |
1,437,000 |
|
Bonds payable, due in 2005 |
615,000 |
594,000 |
|
Marketable securities (short term) |
217,500 |
147,000 |
|
Notes payable (due in six months) |
300,000 |
195,000 |
|
Accounts receivable |
907,500 |
870,000 |
|
Allowance for doubtful accounts |
(72,000) |
(57,000) |
|
Cash flow from operating activities |
192,000 |
180,000 |
In: Accounting
Values of leaders play a big part in organizational culture because it determines how the rest of the organization will run in my opinion. As a leader they must recognize these values first for themselves and find a way to introduce them to the organization. Furthermore, a leader must figure out how his values will blend into the present culture. I think that if a leader claims that his values are respect, compassion and honest, then he/she should exhibit these values on a regular basis and this goes for both personal and professional life. As Whitmire (2005) mentioned in the text, without practice and reinforcement these values are worthless. For example, big cooperate companies like Enron, greediness was more important as oppose to being fair and honest which made the company go downhill from there. So at the end of the day, if the people at the top are not in sync with the leader’s values it will not help the organization. What are your thoughts?
In: Economics
Using the revenue function given in the earlier question above, at an interest rate of 25%, if the firm makes it optimal choice, then its total profit would be? Revenue equal to $4.7k^0.5
A) 4.4
B) 4.85
C) 5.33
D) 5.75
previous question:
A firm uses capital, K, to produce revenue. The revenue function is given as Revenue = $4.7K0.5. If the interest rate is currently 21%, what is optimal K for the firm to choose?
Group of answer choices
2
3
4
5
In: Economics