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In: Accounting
Please answer the following questions:
Q5 Material purchases on account would most likely be included in which budget?
a. Direct labor budget
b. Selling and administrative budget
c. Cash budget
d. None of the above
Q6 Out of the Park socks produce socks for sports fans. The socks come in two sizes: Medium and Large. Out of the Park anticipates the following sales volumes and prices for the coming period:
|
Size |
Sales Volume |
Selling Price |
|
Medium |
8,000 socks |
$4.00 each |
|
Large |
10,000 socks |
$5.00 each |
What is the budgeted level of revenue for the coming period?
a. $50,000
b. $72,000
c. $82,000
d. $90,000
Q7 Out of the Park is projecting the following sales for January and February. Their policy is to maintain ending inventories at 5% of what is expected for the next month.
|
Expected Sales |
||
|
Style |
January |
February |
|
Medium |
1,000 units |
1,800 units |
|
Large |
1,200 units |
2,000 units |
What is the budgeted level of production for both styles for January?
a. Medium: 1,040; Large: 1,240
b. Medium: 2,040; Large: 1,310
c. Medium: 2,240; Large: 1,440
d. None of the above
Q8 Olu’s African Sculptures is preparing their budgeted financial statements for the coming year, and has accumulated the following data:
|
Beginning-of-period balances: |
|
|
Cash: |
$65,000 |
|
Accounts Receivable: |
$40,000 |
|
Raw Materials Inventory: |
$30,000 |
|
Work in Process Inventory: |
$150,000 |
|
Finished Goods Inventory: |
$30,000 |
|
Equipment (historical value): |
$275,000 |
|
Accumulated Depreciation: |
$125,000 |
|
Accounts Payable: |
$45,000 |
|
Estimates for end-of-period balances: |
|
|
Accounts Receivable: |
$20,000 |
|
Raw Materials Inventory: |
$12,500 |
|
Work in Process Inventory: |
$90,000 |
|
Finished Goods Inventory: |
$8,000 |
|
Accumulated Depreciation: |
$115,000 |
|
Accounts Payable: |
$27,000 |
|
Budgeted activity levels for the period: |
|
|
Sales (# units at a sales price of $205/unit): |
20,000 units |
|
Purchases of Direct Materials: |
$290,000 |
|
Direct Labor Wages: |
$170,000 |
|
Manufacturing Overhead: |
$210,000 |
|
Selling and Administrative Expenses: |
$775,000 |
What is the budgeted cash received from customers?
a. $4,100,000
b. $4,120,000
c. $4,220,000
d. $4,320,000
In: Accounting
Here is the information that William has accumulated so far:
The Capital Budgeting Projects
He must choose one of the four capital budgeting projects listed below:
Table 1
|
t |
A |
B |
C |
D |
|
0 |
(19,000,000) |
(20,000,000) |
(18,900,000) |
(19,500,000) |
|
1 |
5,200,000 |
5,700,000 |
6,080,000 |
6,600,000 |
|
2 |
8,300,000 |
8,000,000 |
6,080,000 |
8,100,000 |
|
3 |
6,100,000 |
6,300,000 |
6,080,000 |
6,100,000 |
|
4 |
6,100,000 |
4,400,000 |
6,080,000 |
6,100,000 |
|
Risk |
High |
Average |
Low |
Average |
Table 1 shows the expected after-tax operating cash flows for each project. All projects are expected to have a 4 year life. The projects differ in size (the cost of the initial investment), and their cash flow patterns are different. They also differ in risk as indicated in the above table.
The capital budget is $22 million and the projects are mutually exclusive.
Capital Structures
Grand Island Hotel has the following capital structure, which is considered to be optimal:
|
Debt |
45% |
|
Preferred Equity |
5% |
|
Common Equity |
50% |
|
100% |
Cost of Capital
William knows that in order to evaluate the projects he will have to determine the cost of capital for each of them. He has been given the following data, which he believes will be relevant to his task.
(1)The firm’s tax rate is 38%.
(2) Grand Island Hotel has issued a 9% semi-annual coupon bond with 15 years term to maturity. The current trading price is $960.
(3) The firm has issued some preferred stock which pays an annual 8.5% dividend of $100 par value, and the current market price is $98.
(4) The firm’s stock is currently selling for $88 per share. Its last dividend (D0) was $4.5, and dividends are expected to grow at a constant rate of 7.5%. The current risk free return offered by Treasury security is 2.5%, and the market portfolio’s return is 8%. Grand Island Hotel has a beta of 2.1. For the bond-yield-plus-risk-premium approach, the firm uses a risk premium of 3.9%.
(5) The firm adjusts its project WACC for risk by adding 1.8% to the overall WACC for high-risk projects and subtracting 2% for low-risk projects.
William knows that Grand Island Hotel executives have favored IRR in the past for making their capital budgeting decisions. His professor at Seattle U. said NPV was better than IRR. His textbook says that MIRR is also better than IRR. He is the new kid on the block and must be prepared to defend his recommendations.
First, however, William must finish the analysis and write his report. To help begin, he has formulated the following questions:
(1) What is the estimated cost of common equity using the CAPM approach?
(2) What is the estimated cost of common equity using the DCF approach?
(3) What is the estimated cost of common equity using the bond-yield-plus-risk-premium approach?
(4) What is the final estimate for rs?
Table 2
|
A |
B |
C |
D |
|
|
WACC |
||||
|
NPV |
||||
|
IRR |
||||
|
MIRR |
In: Finance
enny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $8.1 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $10.9 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $22.1 million to build, and the site requires $960,000 worth of grading before it is suitable for construction.
What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole number, e.g., 1,234,567.)
In: Finance
Rangers at the everglades national park, ride an air-boat, the mass of the air boat plus the rangers is 500 kg. The blades of the boat push on the air with 1000N, while moving the rangers experience an air resistance force of 200N directed opposite to the direction of motion, and the boat a water resistance of 250N. They move in straight line for 20s. Please complete the following tasks:
In: Physics
Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $5.1 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $5.4 million. The company wants to build its new manufacturing plant on this land; the plant will cost $12.6 million to build, and the site requires $780,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? (Enter your answer as a positive value in dollars, not millions of dollars, e.g., 1,234,567.)
In: Finance
You may need to use the appropriate technology to answer this question.
An amusement park studied methods for decreasing the waiting time (minutes) for rides by loading and unloading riders more efficiently. Two alternative loading/unloading methods have been proposed. To account for potential differences due to the type of ride and the possible interaction between the method of loading and unloading and the type of ride, a factorial experiment was designed. Use the following data to test for any significant effect due to the loading and unloading method, the type of ride, and interaction. Use α = 0.05.
| Type of Ride | |||
|---|---|---|---|
| Roller Coaster | Screaming Demon | Log Flume | |
| Method 1 | 45 | 48 | 50 |
| 47 | 40 | 46 | |
| Method 2 | 45 | 54 | 48 |
| 47 | 50 | 44 | |
Find the value of the test statistic for method of loading and unloading.
Find the p-value for method of loading and unloading. (Round your answer to three decimal places.)
p-value =
State your conclusion about method of loading and unloading.
Because the p-value ≤ α = 0.05, method of loading and unloading is not significant.Because the p-value > α = 0.05, method of loading and unloading is significant. Because the p-value > α = 0.05, method of loading and unloading is not significant.Because the p-value ≤ α = 0.05, method of loading and unloading is significant.
Find the value of the test statistic for type of ride.
Find the p-value for type of ride. (Round your answer to three decimal places.)
p-value =
State your conclusion about type of ride.
Because the p-value > α = 0.05, type of ride is significant.Because the p-value > α = 0.05, type of ride is not significant. Because the p-value ≤ α = 0.05, type of ride is significant.Because the p-value ≤ α = 0.05, type of ride is not significant.
Find the value of the test statistic for interaction between method of loading and unloading and type of ride.
Find the p-value for interaction between method of loading and unloading and type of ride. (Round your answer to three decimal places.)
p-value =
State your conclusion about interaction between method of loading and unloading and type of ride.
Because the p-value ≤ α = 0.05, interaction between method of loading and unloading and type of ride is significant.
Because the p-value ≤ α = 0.05, interaction between method of loading and unloading and type of ride is not significant.
Because the p-value > α = 0.05, interaction between method of loading and unloading and type of ride is not significant.
Because the p-value > α = 0.05, interaction between method of loading and unloading and type of ride is significant.
In: Statistics and Probability
You may need to use the appropriate technology to answer this question.
An amusement park studied methods for decreasing the waiting time (minutes) for rides by loading and unloading riders more efficiently. Two alternative loading/unloading methods have been proposed. To account for potential differences due to the type of ride and the possible interaction between the method of loading and unloading and the type of ride, a factorial experiment was designed. Use the following data to test for any significant effect due to the loading and unloading method, the type of ride, and interaction. Use α = 0.05.
| Type of Ride | |||
|---|---|---|---|
| Roller Coaster | Screaming Demon | Log Flume | |
| Method 1 | 41 | 52 | 50 |
| 43 | 44 | 46 | |
| Method 2 | 49 | 50 | 48 |
| 51 | 46 | 44 | |
Find the value of the test statistic for method of loading and unloading.
Find the p-value for method of loading and unloading. (Round your answer to three decimal places.)
p-value =
State your conclusion about method of loading and unloading.
Because the p-value > α = 0.05, method of loading and unloading is not significant.Because the p-value > α = 0.05, method of loading and unloading is significant. Because the p-value ≤ α = 0.05, method of loading and unloading is not significant.Because the p-value ≤ α = 0.05, method of loading and unloading is significant.
Find the value of the test statistic for type of ride.
Find the p-value for type of ride. (Round your answer to three decimal places.)
p-value =
State your conclusion about type of ride.
Because the p-value > α = 0.05, type of ride is significant.Because the p-value ≤ α = 0.05, type of ride is not significant. Because the p-value > α = 0.05, type of ride is not significant.Because the p-value ≤ α = 0.05, type of ride is significant.
Find the value of the test statistic for interaction between method of loading and unloading and type of ride.
Find the p-value for interaction between method of loading and unloading and type of ride. (Round your answer to three decimal places.)
p-value =
State your conclusion about interaction between method of loading and unloading and type of ride.
Because the p-value ≤ α = 0.05, interaction between method of loading and unloading and type of ride is not significant.
Because the p-value > α = 0.05, interaction between method of loading and unloading and type of ride is not significant.
Because the p-value ≤ α = 0.05, interaction between method of loading and unloading and type of ride is significant.
Because the p-value > α = 0.05, interaction between method of loading and unloading and type of ride is significant.
In: Statistics and Probability
In an amusement park ride, a 4m long lightweight rod connects the center motorized pivot to a car. The motor applies a couple of 30t2 Nm, and another motor in the car generates a forward force F=15t N. The mass of the car and rider is 150 kg. If the car starts from rest,
a. Determine the speed of the car at t = 10 s.
b. At t=10s, the center motor is switched off and spins freely, but the car motor remains engaged. What is the force in the rod.
c. If at t =15s the car motor is also switched off, and brakes are applied that deliver a constant force of 10N, how long does it take for the car to come to rest after the brakes are applied.
In: Physics
How Much of a Major Auto Accident Loss Will Be Covered? Ashley Diamond of Estes Park, Colorado, drives an eight-year-old Toyota valued at $9,900. She has a $70,000 personal automobile policy with $10,000 per-person medical payments coverage and both collision ($200 deductible) and comprehensive coverage. David Smith of Loveland, Colorado, drives a four-year-old Chevrolet Malibu valued at $9,300. He has a 25/50/15 family automobile policy with $18,000 in medical payments coverage and both collision ($100 deductible) and comprehensive insurance. Late one evening, while he was driving back from Rocky Mountain National Park, David's car crossed the centerline of the road, striking Ashley's car and forcing it into a ditch. David's car also left the road and did extensive damage to the front of a roadside store. The following table indicates the damages and their dollar amounts:
Item
Amount Bodily injuries suffered by Ashley $ 6,600
Bodily injuries suffered by Fran, a passenger in Ashley's car 28,517
Ashley's car 9,900
Bodily injuries suffered by David 2,500
Bodily injuries suffered by Cecilia, a passenger in David's car 12,855
David's car 9,300 Damage to the roadside store 14,011
Use the information to answer these questions. Round your answers to the nearest dollar.
How much will Ashley's policy pay Ashley?
$
How much will Ashley's policy pay Fran?
$
Will subrogation rights come into play? In what way? The input in the box below will not be graded, but may be reviewed and considered by your instructor.
How much will David's bodily injury liability protection pay?
$
How much will David's property damage liability protection pay?
$
To whom will David's property damage liability protection pay?
How much will David's medical protection pay?
$
To whom will David's medical protection pay?
How much reimbursement will David receive for his car?
$
How much will David be required to pay out of his own pocket?
$
In: Accounting