The Hazim Company is a wholesale distributor of automotive replacement parts. For purposes of

this question, assume on January 1, year 3, Hazim Co. adopted the dollar-value LIFO method of

determining inventory costs for financial and income-tax reporting. The following information relates

to this change:

Hazim has continued  to use the FIFO method for internal reporting purposes. Hazim's FIFO

inventories at December 31, Year 3, Year 4, and Year 5, were $100,000, $137,500, and $195,000,

respectively.

The FIFO inventory amounts are converted to dollar-value LIFO amounts using a single inventory

pool and annual cost indexes. Hazim uses the annual indexes developed by its industry trade

association: 1.25 for year 4 and 1.50 for year 5.

Calculate Hazim's dollar-value LIFO inventory at December 31, Year 4 and Year 5. Show all

calculations

When determining incremental unlevered net income, should all the expenses listed be included? If not, what expenses should we exclude and why?

Abe's Steakhouse is the largest upscale steakhouse company in the United States, based on total company- and franchisee-owned restaurants. The company's menu features a broad selection of high-quality steaks and other premium offerings. Assume the information below is from a recent annual report:

a. Common stock, $0.01 par value; 100,090,000 shares authorized; 23,563,356 issued and outstanding at the end of the current year, 23,385,356 issued and outstanding at the end of last year.

b. Additional paid-in capital: $194,389,000 at the end of the current year and $169,431,000 at the end of last year.

c. Retained earnings / (accumulated deficit): ($82,397,000) at the end of last year.

d. In the current year, net income was $53,983,000 and a cash dividend of $7,138,000 was paid.

Required:

Prepare the stockholders’ equity section of the balance sheet to reflect the above information for the current year and last year. (Amounts to be deducted should be indicated with a minus sign.)

Analyze a simple model of a consumer's response to a price increase.

% change (growth rate) = (value_new - value_old) / value_old Elasticity = |% change in quantity / % change in price|

a. For the following questions, assume that the Year 2 price increases by an additional 30%.What would be the new Year 2 price after the additional price increase? Answer

b. Given the previously calculated price elasticity of demand, what quantity would the consumer purchase in Year 2 after the price increase? Answer

c. What would be the consumer's expenditure in Year 2 after the price increase? Answer

d. What is the change in the consumer's expenditure between Year 1 and Year 2 by Answer

e. Would a tax on this good be relatively more effective at raising revenue, or changing behavior? AnswerChanging BehaviorRaising RevenueBoth

The Carbondale Hospital is considering the purchase of ambulance. The TheXarbondale Hospital is considering the purchase of ambulance. The decision will rest partly on the anticipated mileage" be driven next year. The miles driven during the past 5
years are as follows:

a) Forecast the mileage for next year using a 2-year moving average.
b) Find the MAD based on the 2-year moving average forecast in part (a), (Hint: You will have only 3 years of matched data.)
c) Use a weighted 2-year moving average with weights of .4 and .6 to forecast next year's mileage. (The weight of .6 is for the most recent year.) What MAD results from using this approach to forecasting? (Hint: You will have only 3 years of matched data.)
d) Compute the forecast for year 6 using exponential smoothing, an initial forecast for year 1 of 3,000 miles, and a = .5.

*****PLEASE SHOW WORK

1. Wages of $12,000 are earned by workers but not paid as of December 31.
2. Depreciation on the company’s equipment for the year is $10,240.
3. The Office Supplies account had a $330 debit balance at the beginning of the year. During the year, $4,879 of office supplies are purchased. A physical count of supplies at December 31 shows $538 of supplies available.
4. The Prepaid Insurance account had a $5,000 balance at the beginning of the year. An analysis of insurance policies shows that $2,400 of unexpired insurance benefits remain at December 31.
5. The company has earned (but not recorded) $750 of interest revenue for the year ended December 31. The interest payment will be received 10 days after the year-end on January 10.
6. The company has a bank loan and has incurred (but not recorded) interest expense of $5,000 for the year ended December 31. The company will pay the interest five days after the year-end on January 5.

For each of the above separate cases, prepare adjusting entries required of financial statements for the year ended (date of) December 31.

2. A) What is the present value of a cash flow stream of $10,000 per year at an interest rate of 6% starting one year from today and goes on forever? B) What is the present value of a cash flow stream of $10,000 per year starting one year from today that grows at 3% at an interest rate of 6% starting one year from today and goes on forever? C) What is the present value of a cash flow stream of $10,000 per year starting one year from today at an interest rate of 6% for ten years? C-2) What is the future value of the cash flow stream in part C? D) What is the present value of a cash flow stream of $10,000 per year starting one year from today that grows at 3% at an interest rate of 6% for ten years? This problem is good practice of A) PV of a perpetuity, B) PV of a growing perpetuity, C) PV of an annuity, C-2) FV of an annuity, D) PV of a growing annuity.

Bond A has a coupon rate of 10%, with a three-year maturity and a face value of $1,000. If the discount rate now or future is 10%, and you want to buy bond A now, what is the price you have to pay now (P0)?

Stock A has an earnings of $5 per share at year 1. The interest rate is 20%, and the return on equity is 25%. If there is no plow-back, what is the book value of equity per share at the beginning of year 10 ?

What happens to the price of a one-year bond with a coupon rate of 8% when the interest rate changes from 6% to 8%?

Your friend promises you a perpetuity of $1 every year, which starts in year 1. However, your friend is an absent-minded guy, paying you $2 at year 9 but no payment at year 10. Except for these two years, in other years, the payment is always $1. Which of the following is right about the present value at year zero of your friend’s all payments if r = 5%?

Create a 5-year capital budget for the project below assuming the following.

1.$500,000 initial outlay for purchase of new machine for a 5-year contract the company was awarded from a customer.

2.The company will have to rent new space for $50,000/year to put machine in.

3.A one-time, year 1 cost to set up the machine and get it running will be $200,000.

4.The machine is expected to generate revenue beginning in year 2.

The machine will generate around $150,000 in year 2...that number will increase by about 10% per year thereafter.

5.Machine is depreciated using S/L depreciation.

6.The company hasa flat tax rate of 25%.

7.The discount rate is 9%.

Build a 5-year capital budget that includes all of the above items and shows EBITDA, EBT, Taxes Paid, Net Income, and cash flow per year.

Then calculate NPV and IRR. Should the company undertake the project? Why or why not?