A company wants to buy a new management information system. The cost of the system is $10 million, with an additional $1,000,000 for delivery/installation. Immediate net working capital of $500,000 and an additional net working capital investment of $250,000 at the end of year one. The system has a life of 10 years. It will be depreciated as a 7-year asset under MACRS rules. Salvage value is $1,000,000 at end of 10 years. Tax rate is 24 percent. Rate of return is 16%.

New system will save $2,400,000 per year. Costs are $500,000 during the first year, and will increase by 6% per year for the ten year period. Sales price is $15 per unit of computer time and sales are expected to be 170,000 units. After the first year, demand for computer time will decline by 5% per year. An additional $400,000 per year in computer operating costs will be charged and will increase by 6% annully over the ten years.

Calculate the NPV.

A company's marketing strategy will last two years and produce revenue in years 1 and 2 only. The strategy can result in a success, a moderate success, or a failure. The marketing strategy will cost $60,000 immediately (year 0), $38,000 in year 1, and $12,000 in year 2. There is uncertainty with projected revenues, but the forecasted revenues and probabilities for the marketing strategy are as follows: - Success: Year 1: $89,000; Year 2: $112,000; Probability: 0.26 - Moderate success: Year 1: $78,000; Year 2: $70,000; Probability: 0.42 - Failure: Year 1: $39,000; Year 2: $50,000; Probability: 0.32 The company's MARR is 15%. You can ignore any other costs except for the marketing costs. Calculate the standard deviation of the net present worth for the strategy. HINT: it is easier to calculate the net present worth of each separate result first (success, moderate success, failure) before dealing with the probabilities

. Rawlings Company has the following equity accounts at the beginning and end of Year Three: January 1, Year Three December 31, Year Three Preferred Stock, 6%, $100 par value $2,000,000 $2,000,000 Common Stock, $1 Par Value $160,000 $200,000 Capital in Excess of Par, Common $12,000,000 $16,000,000 Retained Earnings $1,100,000 $1,800,000 The common stock account increased because 40,000 shares of common stock were issued to the public on September 1, Year Three. Preferred stock was paid its dividend during the year. A cash dividend was also distributed on the common stock. Net income for the year was $1,200,000. a. How much cash was received when the common stock was issued during Year Three? b. What was the total cash dividend paid on the common stock shares during the year? c. What was the company’s basic earnings per share for Year Three?

Barrel Corporation had service and interest costs of $50,000 related to its defined benefit plan for the year ended December 31, Year 7. THe company's unrecognized prior service cost was $200,000 at December 31, Year 6 and the average remaining service life of the company's employees was 20 years. Plan assets earned an expected and actual return of 10% during Year 7. The company made contributions to the plan of $25,000 and paid benefits of $30,000 during the year. The pension plan had plan assets with a fair value of $300,000 at December 31, Year 6. The PBO was $400,000 at December 31, Year 6 and $420,000 at December 31, Year 7. Barrel's effective tax rate is 30%.

What is funded status of Barrel Corporation's pension plan at December 31, Year 7?

a-$20,000 underfunded

b-$75,000 overfunded

c-$95,000 underfunded

d-$120,000 overfunded

Project cash flow and NPV.  The managers of Classic Autos Incorporated plan to manufacture classic Thunderbirds​ (1957 replicas). The necessary foundry equipment will cost a total of $4,100,000 and will be depreciated using a​ five-year MACRS​ life. The sales manager has an estimate for the sale of the classic Thunderbirds. The annual sales volume will be as​ follows:

If the sales price is $30,000 per​ car, variable costs are $18,000 per​ car, and fixed costs are $1,100,000 ​annually, what is the annual operating cash flow if the tax rate is 30​%? The equipment is sold for salvage for ​$500,000 at the end of year five. Net working capital increases by $600,000 at the beginning of the project​ (year 0) and is reduced back to its original level in the final year. Find the internal rate of return for the project using the incremental cash flows.

"A company's marketing strategy will last two years and produce revenue in years 1 and 2 only. The strategy can result in a success, a moderate success, or a failure. The marketing strategy will cost $71,000 immediately (year 0), $42,000 in year 1, and $13,000 in year 2. There is uncertainty with projected revenues, but the forecasted revenues and probabilities for the marketing strategy are as follows: - Success: Year 1: $107,000; Year 2: $114,000; Probability: 0.21 - Moderate success: Year 1: $94,000; Year 2: $76,000; Probability: 0.43 - Failure: Year 1: $38,000; Year 2: $48,000; Probability: 0.36 The company's MARR is 25%. You can ignore any other costs except for the marketing costs. Calculate the standard deviation of the net present worth for the strategy. HINT: it is easier to calculate the net present worth of each separate result first (success, moderate success, failure) before dealing with the probabilities."

Analyzing Cash Dividends on Preferred and Common Stock Everett Company has outstanding 30,000 shares of $50 par value, 6% preferred stock and 70,000 shares of $1 par value common stock. During its first three years in business, it declared and paid no cash dividends in the first year, $310,000 in the second year, and $90,000 in the third year. (a) If the preferred stock is cumulative, determine the total amount of cash dividends paid to each class of stock in each of the three years. Distibution to Preferred Common Year 1 $ Answer $ Answer Year 2 $ Answer $ Answer Year 3 $ Answer $ Answer (b) If the preferred stock is noncumulative, determine the total amount of cash dividends paid to each class of stock in each of the three years. Distibution to Preferred Common Year 1 $ Answer $ Answer Year 2 $ Answer $ Answer Year 3 $ Answer $ Answer

The Wheat producers of North America are expecting to match their supply to meet the change in the market demand during coming year that is expected to change. The current year market supply and supply function is assumed to be:

Q_D= 62.5 - 0.125P

Q_S= 0.5P - 100

Please predict either a rise or fall in the demand of wheat as a percentage change from the current year demand based on your observations from the website and derive a new demand function with the predicted percentage change (EITHER INCREASE OR DECREASE) in demand, (i.e. the quantity demanded will increase or decrease by THE PERCENTAGE for each level of price). (Please restrict your change in demand within ± 25%)

Please compute the following:

1. Market Equilibrium Price for current year and next year with percentage change.
2. Market Equilibrium Quantity for current year and next year with percentage change
3. Producer Surplus and Consumer Surplus for current year and following year with percentage change

Rotorua Products, Ltd., of New Zealand markets agricultural products for the burgeoning Asian consumer market. The company’s current assets, current liabilities, and sales over the last five years (Year 5 is the most recent year) are as follows: Year 1 Year 2 Year 3 Year 4 Year 5 Sales $ 4,519,650 $ 4,743,420 $ 4,986,130 $ 5,404,630 $ 5,644,150 Cash $ 83,903 $ 94,914 $ 91,997 $ 79,973 $ 72,599 Accounts receivable, net 403,668 425,131 432,904 506,860 563,814 Inventory 818,643 875,531 829,934 890,369 897,953 Total current assets $ 1,306,214 $ 1,395,576 $ 1,354,835 $ 1,477,202 $ 1,534,366 Current liabilities $ 317,903 $ 330,463 $ 343,668 $ 328,804 $ 392,334 Required: 1. Express all of the asset, liability, and sales data in trend percentages. Use Year 1 as the base year. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

BLC offers its customers two lawn maintenance services. One service is for a one-year maintenance plan at a cost of $180. Customers can earn a 5% discount from this price if they pay before BLC’s calendar fiscal year for maintenance services to be performed in the following year. The second service offered by BLC is a three-year maintenance plan that sells for $500. The first year’s maintenance service for this three-year plan will be delivered before BLC’s fiscal year end. No discount for early payment is offered for the second plan.

a) Prepare the summary journal entry for the cash sale of 180 one-time plans for the current year, 100 discounted one-time plans for the following year, and 280 three-year maintenance plans.

b) Determine the statement of financial position (SFP) classification of the unearned portion of the revenue collected.