In: Operations Management
Part 1:
Scenario
You are the owner of a Vancouver hair salon. (Please make up the name and location. Use your imagination.) Due to the pandemic and a sharp decline in demand, you had to lay off all of your staff and close in March.
Now, with some pandemic restrictions lifted, your salon is once again open for business. You need to hire back your former hair stylists. Write a message to your former employees requesting that they return to work. Maintain a professional tone.
Instructions: Choose if the message should be written as an email, memo, or letter. Write the message in Word. I’m expecting less than 200 words. Upload the file to this folder when you are done. Don’t forget to proofread!
Part 2:
Scenario
Write a message to your clients explaining that your hair salon is open once again. Share with them a promotion of your choosing to entice them to make an appointment.
Instructions: Choose if the message should be written as an email, memo, or letter. Write the message in Word. I’m expecting less than 200 words. Upload the file to this folder when you are done. Don’t forget to proofread!
Grading Rubric:
Tone
Audience
Clarity
Conciseness
Cohesion
Graphic Highlighting
Formatting
In: Computer Science
Rolt Company began 2019 with a $105,000 balance in retained earnings. During the year, the following events occurred:
1. The company earned net income of $86,000.
2. A material error in net income from a previous period was corrected. This error correction increased retained earnings by $9,590 after related income taxes of $4,110.
3. Cash dividends totaling $12,000 and stock dividends totaling $18,500 were declared.
4. One thousand shares of callable preferred stock that originally had been issued at $115 per share were recalled and retired at the beginning of 2019 for the call price of $125 per share.
5. Treasury stock (common) was acquired at a cost of $19,000. State law requires a restriction of retained earnings in an equal amount. The company reports its retained earnings restrictions in a note to the financial statements.
Required:
Prepare a statement of retained earnings for the year ended December 31, 2019.
In: Accounting
|
PROVIDE EQUATIONS OR FORMULAS a. Using the financial statements shown below, calculate net operating working capital, total net operating capital, net operating profit after taxes, free cash flow, and return on invested capital for the most recent year. The federal-plus-state tax rate is 25%. |
||||||
| Lan & Chen Technologies: Income Statements for Year Ending December 31 | ||||||
| (Millions of Dollars) | 2020 | 2019 | ||||
| Sales | $945,000 | $900,000 | ||||
| Expenses excluding depreciation and amortization | 812,700 | 774,000 | ||||
| EBITDA | $132,300 | $126,000 | ||||
| Depreciation and amortization | 33,100 | 31,500 | ||||
| EBIT | $99,200 | $94,500 | ||||
| Interest Expense | 10,400 | 8,900 | ||||
| EBT | $88,800 | $85,600 | ||||
| Taxes (25%) | 22,200 | 21,400 | ||||
| Net income | $66,600 | $64,200 | ||||
| Common dividends | $43,300 | $41,230 | ||||
| Addition to retained earnings | $23,300 | $22,970 | ||||
| Lan & Chen Technologies: December 31 Balance Sheets | ||||||
| (Millions of Dollars) | ||||||
| Assets | 2020 | 2019 | ||||
| Cash and cash equivalents | $47,250 | $45,000 | ||||
| Short-term investments | 3,800 | 3,600 | ||||
| Accounts Receivable | 283,500 | 270,000 | ||||
| Inventories | 141,750 | 135,000 | ||||
| Total current assets | $476,300 | $453,600 | ||||
| Net fixed assets | 330,750 | 315,000 | ||||
| Total assets | $807,050 | $768,600 | ||||
| Liabilities and equity | ||||||
| Accounts payable | $94,500 | $90,000 | ||||
| Accruals | 47,250 | 45,000 | ||||
| Notes payable | 17,400 | 9,000 | ||||
| Total current liabilities | $159,150 | $144,000 | ||||
| Long-term debt | 90,000 | 90,000 | ||||
| Total liabilities | $249,150 | $234,000 | ||||
| Common stock | $444,600 | $444,600 | ||||
| Retained Earnings | 113,300 | 90,000 | ||||
| Total common equity | $557,900 | $534,600 | ||||
| Total liabilities and equity | $807,050 | $768,600 | ||||
| Key Input Data | ||||||
| Tax rate | 25% | |||||
| Net operating working capital (NOWC) | ||||||
| 2020 | NOWC = | Operating current assets | - | Operating current liabilities | ||
| 2020 | NOWC = | ?? | - | ?? | ||
| 2020 | NOWC = | ?? | ||||
| 2019 | NOWC = | Operating current assets | - | Operating current liabilities | ||
| 2019 | NOWC = | ?? | - | ?? | ||
| 2019 | NOWC = | ?? | ||||
| Total net operating capital (TNOC) | ||||||
| 2020 | TNOC = | NOWC | + | Fixed assets | ||
| 2020 | TNOC = | ?? | + | ?? | ||
| 2020 | TNOC = | ?? | ||||
| 2019 | TNOC = | NOWC | + | Fixed assets | ||
| 2019 | TNOC = | ?? | + | ?? | ||
| 2019 | TNOC = | ?? | ||||
| Investment in total net operating capital | ||||||
| 2020 | 2019 | |||||
| 2020 | Inv. In TOC = | TNOC | - | TNOC | ||
| 2020 | Inv. In TOC = | ?? | - | ?? | ||
| 2020 | Inv. In TOC = | ?? | ||||
| Net operating profit after taxes | ||||||
| 2020 | NOPAT = | EBIT | x | ( 1 - T ) | ||
| 2020 | NOPAT = | ?? | x | ?? | ||
| 2020 | NOPAT = | ?? | ||||
| Free cash flow | ||||||
| 2020 | FCF = | NOPAT | - | Investment in total net operating capital | ||
| 2020 | FCF = | ?? | - | ?? | ||
| 2020 | FCF = | ?? | ||||
| Return on invested capital | ||||||
| 2020 | ROIC = | NOPAT | / | Total net operating capital | ||
| 2020 | ROIC = | ?? | / | ?? | ||
| 2020 | ROIC = | ?? | ||||
| b. Assume that there were 15 million shares outstanding at the end of the year, the year-end closing stock price was $65 per share, and the after-tax cost of capital was 10%. Calculate EVA and MVA for the most recent year. | ||||||
| Additional Input Data | ||||||
| Stock price per share | $65.00 | |||||
| # of shares (in thousands) | 15,000 | |||||
| After-tax cost of capital | 10.0% | |||||
| Market Value Added | ||||||
| MVA = | Stock price | x | # of shares | - | Total common equity | |
| MVA = | ?? | x | ?? | - | ?? | |
| MVA = | ?? | - | ?? | |||
| MVA = | ?? | |||||
| Economic Value Added | ||||||
| EVA = | NOPAT | - | (Operating Capital | x | After-tax cost of capital) | |
| EVA = | ?? | - | ?? | x | ?? | |
| EVA = | ?? | - | ?? | |||
| EVA = | ?? | |||||
In: Finance
An investor offers you $801,066 in exchange for shares of your start-up company. The investor demands an annual rate of return of 62%, and expect that your IPO will be in 5 years. At that time you expect your firm to have annual income of around $1,811,566 dollars. A similar firm was recently acquired for $18,930,059 dollars. At the time of acquisition, their income was $1,573,471 million dollars per year.
What percentage of your equity should you give to the investor?
Enter your answer as a percentage, without decimals. For example, if your answer is 0.76543, that's 76.543%, which rounds to 77%.
In: Finance
Small Company reported 20X7 net income of $43,000 and paid dividends of $14,000 during the year. Mock Corporation acquired 30 percent of Small's shares on January 1, 20X7, for $99,000. At December 31, 20X7, Mock determined the fair value of the shares of Small to be $127,000. Mock reported operating income of $81,000 for 20X7.
Required:
Compute Mock's net income for 20X7 assuming it
a. Carries the investment in Small at fair value.
b. Uses the equity method of accounting for its investment in Small.
| a. | Net income (fair value method) |
| b. | Net income (equity method) |
In: Accounting
An investor offers you $853,457 in exchange for shares of your start-up company. The investor demands an annual rate of return of 69%, and expect that your IPO will be in 5 years. At that time you expect your firm to have annual income of around $1,898,530 dollars. A similar firm was recently acquired for $18,848,156 dollars. At the time of acquisition, their income was $1,994,670 million dollars per year.
What percentage of your equity should you give to the investor?
Enter your answer as a percentage, without decimals. For example, if your answer is 0.76543, that's 76.543%, which rounds to 77%.
In: Finance
A manufacturer of fabricated metal products has acquired a new plasma table for $37,000. It is projected that the acquisition of this equipment will increase revenue by $10,000 per year. Operating costs for the machine will average $2,600 per year. The machine will be depreciated using the MACRS method, with a recovery period of 7 years. The company uses an after-tax MARR rate of 10% and has an effective tax rate of 30%.
2. Now, suppose that the duration of the project is six years and that an estimate of the value of the equipment cannot be obtained from the marketplace.
2.5. What conclusion can be drawn by comparing the results of the before- and after-tax analyses?
In: Finance
Assume that TDW Corporation (calendar-year-end) has 2018 taxable income of $650,000 for purposes of computing the §179 expense. The company acquired the following assets during 2018:
| Asset | Placed in Service | Basis |
|---|---|---|
| Machinery | September 12 | $2,270,000 |
| Computer Equipment | February 10 | $263,000 |
| Furniture | April 2 | $880,000 |
| Total | $3,413,00 |
a. What is the maximum amount of §179 expense TDW may deduct for 2018?
b. What is the maximum total depreciation, including §179 expense, that TDW may deduct in 2018 on the assets it placed in service in 2018 assuming no bonus depreciation
In: Accounting
Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to the ending inventory using FIFO.
Date Activities Units Acquired at Cost Units Sold at Retail
May 1 Beginning Inventory 160 units @ $11
May 5 Purchase 225 units @ $13
May 10 Sales 145 units @ $21
May 15 Purchase 105 units @ $14
May 24 Sales 95 units @ $22
Select one:
a. $3215
b. $3240
c. $2940
d. $3355
e. $2800
In: Accounting