Whirlybird, Inc. offers helicopter tours and transportation in major cities around the world. The company is considering a stock repurchase in the upcoming quarter. As the Chief Financial Officer (CFO), you understand there are several methods to reduce quarterly earnings, which could reduce stock price prior to the announcement of the proposed stock repurchase.

A. What course of action do you recommend to the Chief Executive Officer (CEO) of Whirlybird?

B. If the CEO approached you recommending a reduction in current quarter earnings, how would you respond?

Your company has arranged a revolving credit agreement for up to $68 million at an interest rate of 1.37 percent per quarter. The agreement also requires your company to maintain a compensating balance of 6 percent of the unused portion of the credit line, to be deposited in a non-interest bearing account. Your company's short-term investment account at the same bank pays an interest rate of .51 per quarter. What is the effective annual interest rate if your company borrows $33 million for one year?

ABC Company a Northwest manufacturer makes woman’s shoes, for which demand is highly seasonal. The company has experienced difficulty in making accurate forecasts. The following table gives the quantity of hose sold by quarters in the last three years.   

Demand Quarter 1998 1999 2000 I 540 590 649 II 70 72 82 III 110 126 130 IV 443 460 510

Decompose the data series into trend and seasonal factors and make forecasts for each quarter in 2001

“We’re in trouble” Your boss tells you one day. “End of the quarter is coming and there is no way we’re going to make our sales budget,” he adds. “You know what that means?” he asks. Then he answers his own question saying, “no bonus for you, for me or for our department’s head; he’s going to be very upset!” Your boss then proceeds to tell you his plan for saving everyone’s bonus and meeting the quarter’s budget. He will send an email to some major customers informing them of a 10% price increase effective on the start of next quarter. The customers will then place next quarter’s orders by the end of this quarter to beat the price increase and you’ll be able to meet your sales budget. After the end of the quarter, your boss plans to send a memo rescinding the announced “price increase.”

Please comment on the following:

1. What shortcomings of the budgeting process do you see in this story and how would you address them?

2. In your opinion does the plan go against any rules or regulations? Is the plan ethical?

3. What short and long term impact will your boss’ plan have for the company’s employees, its shareholders and its customers?

4. What would you advise your boss regarding his plan and why?

5. What alternate course of action would you suggest?

Julia Baker died, leaving to her husband Henry an insurance policy contract that provides that the beneficiary (Henry) can choose any one of the following four options. Money is worth 2.50% per quarter, compounded quarterly. Compute Present value if:

Click here to view factor tables Correct answer.

(a) Your answer is correct. (a) $56,770 immediate cash. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

(b) $4,200 every 3 months payable at the end of each quarter for 5 years. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

(c) $19,800 immediate cash and $1,980 every 3 months for 10 years, payable at the beginning of each 3-month period. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

(d) $4,200 every 3 months for 3 years and $1,640 each quarter for the following 25 quarters, all payments payable at the end of each quarter. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Which option would you recommend that Henry exercise?

The following quarterly financial data are for Pneumatic Inc., a maker of compressors. On average, Pneumatic makes 20,000 compressors each quarter.

Per Unit Total Qtrly Data at 20,000 Compressors

Sales revenue $300 $6,000,000

- Variable Costs 100 2,000,000

=Contribution margin $200 $4,000,000

- Fixed Costs 3,500,000

=PROFIT $500,000

Pneumatic received an offer from a one-time customer to purchase 5,000 compressors this coming quarter for $275 per unit. Pneumatic can produce up to 30,000 units a quarter, so the special order would not affect regular customer sales. Variable costs per unit will remain at $100. This special order will have no effect on fixed costs.

REQUIREMENTS:

A.Using differential analysis, determine whether Pneumatic would be better off rejecting the special order (Alternative 1) or accepting the special order (Alternative 2). B.Summarize the result of accepting the special order. C. Assume Pneumatic is approached with the same special offer, but has limited capacity and can only produce up to 20,000 units per quarter. Thus, any special orders will result in reduced sales to regular customers. Using the differential analysis 1, determine whether Pneumatic would be better off rejecting (Alternative 1) or accepting (Alternative 2) the special order. D. Summarize the result of accepting the special order in requirement c.

Bench Corporation is a merchandising company that is preparing a cash budget for the third quarter. They have the following budget information available.  

1. Estimated sales for July, August, September, and October will be $210,000, $230,000, $220,000, and $240,000. Accounts receivable from June sales are $136,000. All sales are on credit and collected 35% in the month of sale and 65% in the month following sale.

2. Inventory purchases for July, August, and September are budgeted as $129,600, $136,200, and $135,600. Accounts payable from June purchases are $71,100. All purchases are paid 40% in the month of purchase and 60% in the month following purchase.

3. Monthly SGA expenses are $60,000; $5,000 of which represents depreciation.

4. In August, Bench purchases a machine for $90,000.

5. The July 1 cash balance is $20,000. For debt covenants, Bench must maintain a $10,000 cash balance at month end. The company has access to a revolving line of credit at a 6% annual rate. Borrowing occurs in $5,000 increments at the end of a month and is repaid as soon as possible. Interest is paid when the principal is repaid.

What were total monthly Selling & Administrative (or SGA) expenses?

How much was paid in cash for Selling & Administration per month?

What was the ending cash balance for September?

What was the ending cash balance for the quarter?

What were the total cash receipts for the quarter?

How much interest was paid during the quarter?

Jordan and Taylor are too busy baking brownies to schedule an appointment with you. They did send you the enclosed questions for you to answer.

Chapter 21 Questions:

1. Units to be produced annually: 200,000 tins
Direct labor: 1 hour per 100 tins
Variable overhead costs per direct labor hour:
Indirect materials $2.05
Indirect labor $1.20
Utilities $9.25
Maintenance $3.50
Fixed overhead costs per quarter:
Insurance $3,000
Depreciation $2,000
Rent $12,000

What is the budgeted total manufacturing overhead for the year? (5 points)

2. Sales: 60,000 tins per quarter
Variable costs per dollar of sales: sales commissions 5%, delivery expense .5%, and advertising 1.5%.
Fixed costs per quarter: sales salaries $40,000, office rent $1,500, utilities $1,200, and repairs expense $200.
Selling price: $10 per tin

What is the budgeted total selling and administrative expenses for the quarter? (5 points)

3. Sales are 30% cash and 70% on credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale. Sales were December $180,000; January $220,000; February $250,000; and March $300,000.

What was total cash received in March?

Bob​ Carlton's golf camp estimates the following workforce requirements for its services over the next two​ years:

Each certified instructor puts in 480 hours per quarter regular time and can work an additional 120 hours overtime.​ Regular-time wages and benefits cost Carlton $7,200 per employee per quarter for regular time worked up to 480 ​hours, with an overtime cost of $20 per hour. Unused regular time for certified instructors is paid at $15 per hour. There is no cost for unused overtime capacity. The cost of​ hiring, training, and certifying a new employee is $10,000. Layoff costs are $4,000 per employee. Currently 8 employees work in this capacity.

a. Find a workforce plan using the level strategy that allows for no delay in service. It should rely only on overtime and the minimum amount of undertime necessary. What is the total cost of the​ plan?

​b. Use the chase strategy that varies the workforce level without using overtime or undertime. What is the total cost of this plan? (Enter your response as an integer)

C. Consider the following proposed plan for a different demand scenario. In this​ case, each certified instructor puts in 480 hours per quarter regular time. All other cost and capacity values are the same as above.

​

language is C++

1. Design a class that manages a Pet Food Company's quarterly summarized activity. It should contain the following:

( This is all private data )

Company Name - char[40]   //  This is a static member 

Quarter              - char         // This is a static member.  Validate to be 1-4 in the setter method

Division Name - char[40]

BonusBudgetRate - float   - set to 0.02
Total Sales        - float

Total Expenses - float

1a. Create a public method named netIncome() which will return total sales - total expenses as float.

2. Create public class methods (Setters and Getters) that load the data values.

3. Do not create getter/setter methods for the BonusBudgetRate item. It can be set in a constructor or initialized to the default value of 0.02. There is no other reference to it.

4. This class needs a header file and a corresponding cpp file.

5. Create a 'driver' program that contains the main() method and includes the header file for PetFoodCompany class.

   In the driver program, create an instance of the object PetFoodCompany. 

   Internally set the Quarter to 1 and the CompanyName to a name of your choosing.
   Display the CompanyName and Quarter values
   Prompt for total sales and total expenses for this object
   Display the result of netIncome(). 

Below is an example:

Company Name is myCompanyName
Current Quarter is 1

Enter Total Sales: 1000

Enter Total Expenses: 600
Net Income = 400

The deliverable is a working program (CPPs & H files) and a UML diagram of the this class.