Conch Republic Electronics Part 1

Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelley Couts, who inherited the company. When it was founded over 70 years ago, the company originally repaired radios and other household appliances. Over the years, the company expanded into manufacturing and is now a reputable manufacturer of various electronic items. Jay McCanless, a recent MBA graduate, has been hired by the company's finance department.

One of the major revenue-producing items manufactured by Conch Republic is a smart phone. Conch Republic currently has one smart phone model on the market, and sales have been excellent. The smart phone is a unique item in that it comes in a variety of tropical colors and is preprogrammed to play Jimmy Buffett music. However, as with any electronic item, technology changes rapidly, and the current smart phone has limited features in comparison with newer models. Conch Republic spent $750,000 to develop a prototype for a new smart phone that has all the features of the existing smart phone but adds new features such as WiFi tethering. The company has spent a further $200,000 for a marketing study to determine the expected sales figures for the new smart phone.

Conch Republic can manufacture the new smart phones for $215 each in variable costs. Fixed costs for the operation are estimated to run $6.1 million per year. The estimated sales volume is 155,000, 165,000, 125,000, 95,000, and 75,000 per year for the next five years, respectively. The unit price of the new smart phone will be $520. The necessary equipment can be purchased for $40.5 million and will be depreciated on a seven-year MACRS schedule. It is believed the value of the equipment in five years will be $6.1 million.

As previously stated, Conch Republic currently manufactures a smart phone. Production of the existing model is expected to be terminated in two years. If Conch Republic does not introduce the new smart phone, sales will be 95,000 units and 65,000 units for the next two years, respectively. The price of the existing smart phone is $380 per unit, with variable costs of $145 each and fixed costs of $4.3 million per year. If Conch Republic does introduce the new smart phone, sales of the existing smart phone will fall by 30,000 units per year, and the price of the existing units will have to be lowered to $210 each. Net working capital for the smart phones will be 20 percent of sales and will occur with the timing of the cash flows for the year; for example, there is no initial outlay for NWC, but changes in NWC will first occur in Year 1 with the first year's sales. Conch Republic has a 35 percent corporate tax rate and a required return of 12 percent.

Shelley has asked Jay to prepare a report that answers the following questions.

Conch Republic Electronics Part 2

Shelley Couts, the owner of Conch Republic Electronics, had received the capital budgeting analysis from Jay McCanless for the new smart phone the company is considering. Shelley was pleased with the results, but she still had concerns about the new smart phone. Conch Republic had used a small market research firm for the past 20 years, but recently the founder of that firm retired. Because of this, she was not convinced the sales projections presented by the market research firm were entirely accurate. Additionally, because of rapid changes in technology, she was concerned that a competitor could enter the market. This would likely force Conch Republic to lower the sales price of its new smart phone. For these reasons, she has asked Jay to analyze how changes in the price of the new smart phone and changes in the quantity sold will affect the NPV of the project.

Shelley has asked Jay to prepare a memo answering the following questions.

QUESTIONS

1.What is the payback period of the project?

2.What is the profitability index of the project?

3.What is the IRR of the project?

4.What is the NPV of the project?

5.How sensitive is the NPV to changes in the price of the new smart phone?

6.How sensitive is the NPV to changes in the quantity sold of the new smart phone?

PLEASE ATTATCH EXCEL FILE FOR ANSWER THANK YOU!!!!!

answer questions about  AMAZON

1. What industry does the firm operate in? Examine the firm’s past and future position within the industry. Is it a leader? What percent market share does it hold? Describe the services and products that the firm produces.

2. Who are the company’s important managers (aka: insiders) CEO, CFO, etc.? What is their experience? Is it applicable to their current position within the firm? Are they owners of the firm’s stock/bonds? How are they compensated? Are they buyers or sellers of the firm’s stock/bonds?

3. 4. Explore the Company 10-K (Annual Report) and find its Income Statement, Balance Sheet and Statement of Cash Flows. From the firm’s financial statements, calculate the following ratios: ( Show calculations and indicate year)
A. Firm Liquidity

1. Current Ratio

2. Acid-Test Ratio

3. Average Collection Period

4. Accounts Receivable Turnover

5. Inventory Turnover

Adventures in Wild Life conducts tours of wildlife reserves around the world. They have recently purchased a new lodge in Adak, Alaska, utilizing a 4% mortgage from Bank of Alaska. As part of the agreement they must provide an annual report showing they are achieving a current ratio of 1.2 or better. In order to ensure they achieve this ratio, the CEO requested the CFO to reclassify the long-term debt investments into brokerage accounts to allow them to sell them soon. The adjustments were done knowing the company was not planning on selling these long-term investments. The economy took a downturn and the business saw revenues drop more than 60%.

1. Explain how the move of long-term investments to brokerage investments would change the financial statements and how this movement would affect the current ratio.
2. What information on the financial statements should have shown the bank of this movement?
3. Determine if there was fraud in this movement and the type of fraud.

answer questions about  AMAZON (2 pages)

1. What industry does the firm operate in? Examine the firm’s past and future position within the industry. Is it a leader? What percent market share does it hold? Describe the services and products that the firm produces.

2. Who are the company’s important managers (aka: insiders) CEO, CFO, etc.? What is their experience? Is it applicable to their current position within the firm? Are they owners of the firm’s stock/bonds? How are they compensated? Are they buyers or sellers of the firm’s stock/bonds?

3. 4. Explore the Company 10-K (Annual Report) and find its Income Statement, Balance Sheet and Statement of Cash Flows. From the firm’s financial statements, calculate the following ratios: ( Show calculations and indicate year)
A. Firm Liquidity

1. Current Ratio

2. Acid-Test Ratio

3. Average Collection Period

4. Accounts Receivable Turnover

5. Inventory Turnover

Fucciani Fashions, Inc., is in the formal wear clothing industry. The corporate tax rate is 21 percent. The CEO has proposed a new venture. The project requires an initial outlay of $785,000 and is expected to result in a $93,000 cash inflow at the end of the first year. The project will be financed at the company’s target debt-equity ratio. Annual cash flows from the project will grow at a constant rate of 5 percent until the end of the fifth year and remain constant forever thereafter. The company currently has a target debt-equity ratio of 0.40, but the industry target debt-equity ratio is 0.35. The industry average beta is 1.2. The market risk premium is 7 percent and the risk-free rate is 5 percent. Fucciani, like all other firms is this industry, can borrow at the riskless interest rate. All companies in this industry can issue debt at the risk-free rate.

Show all work

Should Fucciani invest in the project?

Which of the following scenarios is inconsistent with a semistrong-efficient market?

Multiple Choice

• A. Veeva's CEO sold 100,000 shares of the company on Apr 1, 2017 for $56 per share. On Apr 6, Veeva reported disappointing operating results which caused the stock price to plummet to $40.

• B. Lyft's stock price jumped 15% from the IPO price when it started trading on Mar 28, 2019, its IPO day. The closing price was almost the same as the opening price.

• C. Netflix's stock price jumped 12 percent on the day it announced higher-than-expected growth rates in revenue. The price kept rising in the subsequent 5 trading days with a total return of 8 percent.

• D. When rumor came out on Sept 8, 2010 that Steve Jobs was hospitalized due to a heart attack, Apple's stock price plummeted by 10 percent within seconds.

1.)Who is responsible for the fair presentation of the financial statements and the integrity of the system of internal controls?

                  A. The independent registered accounting firm

                  B. The CEO and CFO

                  C. Management of the company

                  D. The Board of Directors

2.)Which of the following is NOT included in the cash flow profile?

                  A. Cash received from customers

                  B. Cash paid for inventory purchases

                  C. Free cash flows

                  D. cash used to pay dividends

3.) Which of the following is a “squeeze” in the cash flow profile

                  A. other cash flows

                  B. cash margin

                  C. other operating cash flows

                  D. other investing cash flows

4.) Which of the following is generally prepared using the indirect method:

                  A. financing activities section of the statement of cash flows

                  B. the investing section of the statement of cash flows

                  C. the operating section of the statement of cash flows

                  D. the non-operating section of the statement of comprehensive income

Adventures in Wild Life conducts tours of wildlife reserves around the world. They have recently purchased a new lodge in Adak, Alaska, utilizing a 4% mortgage from Bank of Alaska. As part of the agreement they must provide an annual report showing they are achieving a current ratio of 1.2 or better. In order to ensure they achieve this ratio, the CEO requested the CFO to reclassify the long-term debt investments into brokerage accounts to allow them to sell them soon. The adjustments were done knowing the company was not planning on selling these long-term investments. The economy took a downturn and the business saw revenues drop more than 60%.

1. Explain how the move of long-term investments to brokerage investments would change the financial statements and how this movement would affect the current ratio.
2. What information on the financial statements should have shown the bank of this movement?
3. Determine if there was fraud in this movement and the type of fraud.

i am not sure how to answer this question regarding blackberry company and technology if any one can answer it it would be a great help

C/ Some questions to consider (please do not include these actual questions in your work)...

• What proprietary innovations have they implemented or designed?

• Are these changing the market or industry as a whole?

• Who is the leader in progressive technology in their sector?

• Does their technology provide a competitive advantage over closest rivals? If so, how?

• Do suppliers and customers need to comply or bring new tech online in order to do business with the organization?

D/ Analysis –

Has the technology made a difference to their business? Anything missing from the picture? Do you think their technology was a wise investment? Why? How has the technology created a need for another piece of tech / any shortcomings? If you were suddenly CEO, what do you see as the next steps for this organization?