Problem 26-7 Calculating Payments Rossdale Products has projected the following sales for the coming year: Q1 Q2 Q3 Q4 Sales $ 740 $ 665 $ 785 $ 890

Sales in the year following this one are projected to be 15 percent greater in each quarter. The company places orders during each quarter equal to 30 percent of projected sales for the next quarter.

a. Calculate payments to suppliers assuming that the company pays immediately. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

b. Calculate payments to suppliers assuming a 90-day payables period. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

c. Calculate payments to suppliers assuming a 60-day payables period. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Sales of roof material, by quarter, for 2010 through 2016, by Carolina Home Construction Inc. are shown below (in $000). Quarter Year I II III IV 2010 69 241 211 220 2011 85 236 249 222 2012 100 284 253 256 2013 117 298 275 268 2014 113 305 309 299 2015 120 311 325 296 2016 130 327 210 183 Click here for the Excel Data File Determine the typical seasonal patterns for sales using the ratio-to-moving-average method. (Round your answers to 4 decimal places.) Deseasonalize the data and determine the trend equation. (Round your answers to 3 decimal places.) Project sales for 2017 using the trend equation and seasonally adjust these values to find the predicted sales for each quarter. (Round your answers to 4 decimal places.)

A firm and its supplier are going to negotiate a deal. Since the supplier’s cost is $10 million per quarter and the value to the firm is $13 million per quarter, there is $3 million per quarter to split between the two. However, they can each hire a negotiation consultant for $500,000 per negotiation. If neither hires the consultant, each expects to get half of the $3 million pot. If only one hires the consultant, it expects to get three-fourths of the pot minus the consultant costs, leaving the other firm to gain 0 (and incur in 0 cost as well). If they both hire consultants, their consultants suggest additional expenditures that erases the potential gain of $3, leaving the firm and the supplier with the cost of hiring the consultants.

What is the equilibrium of this simultaneous move game? Hint: set up the 2x2 table and fill in the pay-off values in the cells, then determine the Dominant Strategies (if any) and Nash Equilibrium (if any)? Explain your reasoning.

Show Work.

2. Barbara has a jar of coins, some Canadian, some U.S., and similarly, some quarters, some dimes. [There is no other nationality of coin, nor any other value of coin.] 70% are Canadian coins. Given that it is a Canadian coin, there is a 40% chance it is a quarter. Given that it is not a Canadian coin, there is a 40% chance it is a quarter. Are nationality and value independent? Or is impossible to tell? Please explain how you know.

3. Ian, like Barbara, has a jar of coins, some Canadian, some U.S., and similarly, some quarters, some dimes. [There is no other nationality of coin, nor any other value of coin.] 60% are Canadian; 50% are quarters; and 80% of all quarters are Canadian. What is the probability of picking a coin and it being either Canadian or a quarter?

4. Let’s use the data from Question 9. [60% are Canadian; 50% are quarters; and 80% of all quarters are Canadian.] What’s the probability of it being a Canadian dime?

Sales of roof material, by quarter, since 2005 for Carolina Home Construction Inc. are shown below (in $ thousands).

1. Determine the typical seasonal patterns for sales using the ratio-to-moving-average method. (PLEASE DONOT USE EXCEL. PLEASE SHOW ALL MANUAL WORKINGS HOW DID YOU GET ANSWER IN THE TABLE)

2. Deseasonalize the data and determine the trend equation. PLEASE DONOT USE EXCEL. PLEASE SHOW ALL MANUAL WORKINGS HOW DID YOU GET ANSWER IN THE TABLE)

3. Project the sales for 2012, and then seasonally adjust each quarter.

JUST DO QUESTION 2 and 3, not 1. The answer to one is 4% I believe.

1. Ann gets a fully amortizing 30-year fixed rate mortgage with quarterly payments for $1,000,000. The interest rate is 4%, compounded quarterly. She prepays the mortgage in 1 quarter (i.e. she makes the 1^st payment and immediately prepays the remaining balance). What is Ann’s APR?

   Notes: a quarter equals 3 months, one year consists of 4 quarters, APR is annual.

2. Modify question 1: At the moment when Ann signs the mortgage, she must pay an origination fee that equals 2 points. Everything else stays the same, and she still prepays the mortgage in 1 quarter. What is Ann’s APR?

3. Modify question 2: There is still an origination fee of 2 points, but now Ann decides to keep the mortgage for the whole term, i.e. she no longer plans to prepay it. What is Ann’s APR?

8th State Bank prepares interim financial statements and follows an investment strategy of investing in trading securities. At the beginning of the third quarter of 2018, the bank held the following portfolio of trading securities:

During the third quarter of 2018, the bank entered into the following trading securities transactions:

On September 30, 2018, the Porter Company common stock had a quoted market price of $36.50 per share and the Union Company common stock had a quoted market price of $21 per share.

Required:

Hamby Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below:

The company managers have made the following additional assumptions and estimates:

1. Estimated sales for July, August, September, and October will be $380,000, $400,000, $390,000, and $410,000, respectively.

2. All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.

3. Each month’s ending inventory must equal 25% of the cost of next month’s sales. The cost of goods sold is 70% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.

4. Monthly selling and administrative expenses are always $52,000. Each month $7,000 of this total amount is depreciation expense and the remaining $45,000 relates to expenses that are paid in the month they are incurred.

5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.

How much is the Company's expected cash disbursement for merchandise in the month of July?

Multiple Choice

• $88,000

• $195,800

• $161,700

• $107,800

For example, vehicle operating costs should be $6,800 per month plus $476 per bus plus $3.5 per passenger. The company’s sales revenue should average $29 per passenger. In July, the company operated 53 buses and served a total of 3,200 passengers. How much is the company’s flexible budget operating income for July?

Multiple Choice

• $32,028

• $31,058

• $49,572

• $61,742

Santana Rey expects second-quarter 2018 sales of her new line of computer furniture to be the same as the first quarter’s sales (reported below) without any changes in strategy. Monthly sales averaged 42 desk units (sales price of $1,270) and 22 chairs (sales price of $520).

* Reflects revenue and expense activity only related to the computer furniture segment.
† Revenue: (126 desks × $1,270) + (66 chairs × $520) = $160,020 + $34,320 = $194,340
‡ Cost of goods sold: (126 desks × $770) + (66 chairs × $270) + $30,600 = $145,440

Santana Rey believes that sales will increase each month for the next three months (April, 50 desks, 34 chairs; May, 54 desks, 37 chairs; June, 58 desks, 40 chairs) if selling prices are reduced to $1,170 for desks and $470 for chairs, and advertising expenses are increased by 10% and remain at that level for all three months. The products’ variable cost will remain at $770 for desks and $270 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $10,200 and other fixed expenses will remain at $6,200 per month.

Required:
1. Prepare budgeted income statements for the computer furniture segment for each of the months of April, May, and June that show the expected results from implementing the proposed changes. Use a three-column format, with one column for each month.

                                                                BUDGETED income statements

                                                                 APRIL                                       MAY                                      JUNE

The following table shows the real output demanded and supplied at various price levels in a hypothetical economy.

On the following graph, use the blue points (circle symbols) to plot the aggregate demand (Initial AD) curve for the economy. Then use the orange points (square symbols) to plot the short-run aggregate supply (SRAS) curve for the economy.

Note: Line segments will automatically connect the points.

Initial ADSRASNew AD020406080100100806040200PRICE LEVEL (Billions of dollars)REAL GDP (Index numbers)

The equilibrium price level is   , and the equilibrium level of real output is   .

Suppose that the government spending increases by $10 billion and the expenditure multiplier in this economy is 3.

On the previous graph, use the purple points (diamond symbols) to illustrate the effect of the increase in government spending on the aggregate demand (New AD) curve.

The change in government spending   the equilibrium level of real output by   .