Red Queen Restaurants wishes to prepare financial plans. Use the financial statements and the other information provided below to prepare the financial plans.

Red Queen Restaurants Income Statement for the Year Ended December 31, 2019  
Sales revenue    $799,000
Less: Cost of goods sold   599,000
Gross profits    $200,000
Less: Operating expenses   101,000
Net profits before taxes    $99,000
Less: Taxes (21%)   20,790
Net profits after taxes    $78,210
Less: Cash dividends   20,500
To retained earnings    $57,710

      Red Queen Restaurants Balance Sheet December​ 31, 2019        
Assets Liabilities and Stockholders' Equity  
Cash    $32,700 Accounts payable    $99,900
Marketable securities    17,800       Taxes payable    20,600
Accounts receivable    149,800       Other current liabilities   4,500
Inventories   100,400 Total current liabilities   $125,000
Total current assets    $300,700       Long-term debt    $199,700
Net fixed assets   349,500 Common stock   $150,500
Retained earnings   $175,000
Total assets   $650,200 Total liabilities and equity    $650,200

The following financial data are also​ available:

(1) The firm has estimated that its sales for 2020 will be $899,700.

​(2) The firm expects to pay $34,400 in cash dividends in 2020.

​(3) The firm wishes to maintain a minimum cash balance of $31,500.

​(4) Accounts receivable represent approximately 21% of annual sales.

​(5) The​ firm's ending inventory will change directly with changes in sales 2020.

​(6) A new machine costing $43,100will be purchased in 2020.Total depreciation for 2020 will be $15,800.

​(7) Accounts payable will change directly in response to changes in sales in 2020.

​(8) Taxes payable will equal​ one-fourth of the tax liability on the pro forma income statement.

​(9) Marketable​ securities, other current​ liabilities, long-term​ debt, and common stock will remain unchanged.

Questions:

a. Prepare a pro forma income statement for the year ended December​ 31, 2020​, using the ​percent-of-sales method.

b. Prepare a pro forma balance sheet dated December​ 31, 2020​, using the judgmental approach.

c. Analyze these​ statements, and discuss the resulting external financing required.

1. What are some of the growth strategies that have been employed by the developing nations? Describe in detail.

2. How successful are these strategies? Justify your answer.

3. Provide examples of developing countries that have successfully applied some of these growth strategies.

What restrictions or recommendations should be applied to firms/companies when using social networks? Are these tools a security threat? Can they tarnish the reputation of the company? Can they enhance the reputation of the company? How so? Please, indicate your point of view in detail.

Red blood cells have an average lifespan of 120 days in the human body. If a given individual produces 200 billion red blood cells per day, what is the average number of red bloods cells in his/her body? (Note: 1 trillion = 1000 billion) SHOW WORK

a) 1.6 trillion cells b) 8 trillion cells c) 16 trillion cells d) 24 trillion cells e) 30 trillion cells f) 600 trillion cells g) We do not have enough information to answer this question.

A roulette wheel has 38 slots: 18 red, 18 black, and 2 green. A ball is tossed into the wheel and eventually settles in a slot at random. You play many games, betting $1 on red each time. If the ball lands in a red slot you win $1, otherwise you lose the dollar you bet. After n games, what is the probability that you have more money than you started with? Give (approximate) numerical answers for n = 100 and n = 1000. How would the answer change if there were no green slots?

Discuss how purchasing equipment affects your operation tax wise and your cash flow by using Section 179.

Section II (Unit 4 Application): Evaluate Your Client’s Financial Health

In preparation of your next meeting with the them, you now need to review the financial information. You are responsible for creating a report based off of this information. Analyze the assets & liabilities, to evaluate their financial health and provide cash management counseling.

In the Case Study: Resources folder, please review the Client’s Financial Data to create (show your work) the following items IN EXCEL with the information given by the Clients:

• Cash Flow Statement
• Balance Sheet
• Financial Ratios (5 ratios; review Unit 4)

After completing the financial statements and ratios (IN EXCEL), write a one page summary to your clients explaining the outcome of their Cash Flow Statement and Balance Sheet and how their ratio results compare to the benchmarks.

Section II (Unit 4 Application): Evaluate Your Client’s Financial Health

In preparation of your next meeting with the them, you now need to review the financial information. You are responsible for creating a report based off of this information. Analyze the assets & liabilities, to evaluate their financial health and provide cash management counseling.

In the Case Study: Resources folder, please review the Client’s Financial Data to create (show your work) the following items IN EXCEL with the information given by the Clients:

• Cash Flow Statement
• Balance Sheet
• Financial Ratios (5 ratios; review Unit 4)

After completing the financial statements and ratios (IN EXCEL), write a one page summary to your clients explaining the outcome of their Cash Flow Statement and Balance Sheet and how their ratio results compare to the benchmarks.

Section II (Unit 4 Application): Evaluate Your Client’s Financial Health

In preparation of your next meeting with the them, you now need to review the financial information. You are responsible for creating a report based off of this information. Analyze the assets & liabilities, to evaluate their financial health and provide cash management counseling.

In the Case Study: Resources folder, please review the Client’s Financial Data to create (show your work) the following items IN EXCEL with the information given by the Clients:

• Cash Flow Statement
• Balance Sheet
• Financial Ratios (5 ratios; review Unit 4)

After completing the financial statements and ratios (IN EXCEL), write a one page summary to your clients explaining the outcome of their Cash Flow Statement and Balance Sheet and how their ratio results compare to the benchmarks.

Assets & Liabilities

Annual Income & Expenses

Joint Money Market Account $8,000

Mary's Gross - Part Time Wages $17,500

Boat $15,000 Gifts to Family $3,000 Credit Card B (For Clothes)

$3,250 Homeowners insurance $1,200 Mortgage Balance $100,000 Auto insurance/registration

$2,000 Cash on hand $1,000 Income Taxes $30,000 House $175,000 Bill's Gross Salary $110,000 Personal Property $25,000 Food (For Groceries/Restaurants) $12,000 Credit Card D (For Misc. Items) $4,000 Utilities $6,250 Mary's - Car Loan Balance $12,000 Maintenance (auto and home) $3,500 Joint Savings Account $400 Charitable Contributions $9,600 Mary's Car $23,000 Mortgage (including taxes) $21,000 Credit Card A (For Groceries/Restaurants) $2,500 Combined Auto Loan Payment $13,250 Joint Checking Account $1,250 Boat Loan $7,500 Bill's - Truck Loan Balance $30,000 Phone $1,550 Bill's Truck $42,000 Gas/Plane Tickets for Transportation $4,200 Mary's 401(k) $18,000 Medical Expenses $8,500 Bill's 401(k) $65,000 Medical Bill Payments $4,000 Medical Bills $7,500 Clothing $4,300 Credit Card C (For Travel) $11,000 Miscellaneous $8,500 Internet $750 Medical Insurance Premiums $6,300 Life Insurance premium $1,600 Credit Cards (sum of ALL credit card payments) $4,200 Mary's 401(k) - Contributions $4,000 Bill's 401(k) - Contributions $4,000

Use your knowledge about price-searching firms and two-part pricing to advise the company below.

The company has a bar and is trying to decide on the cover charge (if any) and price for each drink. It has done a modest survey to ask customers to classify themselves as light drinkers or heavy drinkers and to indicate the number of drinks they would typically consume during the evening at various possible prices.

The estimate from the study is that a change in the price equal to $1 per drink causes light drinkers to change their consumption on average by 0.5 drinks per night. However, a change in price of $1 causes heavy drinkers to change their consumption on average by 1.0 drink per night. For both groups a typical consumer will not consume anything once the price reaches $9 per drink. (Customers might instead go to another bar or not go to a bar at all.)

(Note the distinction between dQ/dP and dP/dQ, which is its inverse.) Draw an inverse demand curve for a typical light drinker and for a typical heavy drinker on the same diagram. Explain your diagram. Write equations for the curves in slope-intercept form.

If 300 people visit the bar on a typical evening, with 200 people being light drinkers and 100 people being heavy drinkers, draw an overall (inverse) demand curve for all of the consumers combined. (A good way to start is with a price of $9. Then determine what would happen if the price were reduced all the way to zero. You would then be able to plot on a diagram the total quantity demanded at $9 and the total quantity demanded at $0. Connect the two points involved with a straight line and determine its slope.)

What is the slope and what is the intercept for this (total) demand curve? Write an equation in slope-intercept form.

Recall that, in the case of a straight-line demand curve, the slope of the marginal revenue line for a company that does not practice price discrimination is double the slope of the (total) market demand curve.        

If the marginal cost of making drinks (the alcohol, the bartender’s labor, and the amortized cost of purchasing glasses and cleaning them repeatedly) is constant at $5 per drink, and if no cover charge is assessed, what is the best price to charge for drinks? How many drinks would be sold on a typical evening? What would your profits be? Show your work. What would be the point price elasticity of demand at the profit-maximizing price? (Find the quantity where marginal revenue equals marginal cost, and then use your equation for the total demand curve to determine the price to charge.)

However, our last two-part pricing slide tells us that a monopoly user charge is too high from the standpoint of two-part pricing. If you cut your price by $1 per drink AND assess the maximum possible cover charge without causing a typical light drinker to refuse to enter the bar, would your profits improve? How high would the cover charge be? Calculate both the cover charge and your total profits. Would the new pricing increase profits? Show your work.

(Using calculus). Maybe the best price cut is not exactly $1. Write a profit equation. Profits equal total revenue minus total cost. Total cost equals $5 times the number of drinks sold. Total revenue equals the price for drinks times the number of drinks sold, PLUS 300 people times the cover charge. The cover charge equals, for a light drinker, the triangle of consumer surplus above the price but below the demand curve for a light drinker. (The area of a triangle equals one half the base times the height.)

You will take the derivative of the profit equation with respect to P or Q and set it equal to zero. For example, use the equation for the total demand curve and solve for Q in terms of P. Then in the profit equation substitute in an expression involving P in place of every ‘Q’ that was in the original profit equation. Now you can take a derivative of profits with respect to P and set the derivative equal to zero. Eventually you can solve for the exact best P, Q, and cover charge.  

Use your knowledge about price-searching firms and two-part pricing to advise the company below.

The company has a bar and is trying to decide on the cover charge (if any) and price for each drink. It has done a modest survey to ask customers to classify themselves as light drinkers or heavy drinkers and to indicate the number of drinks they would typically consume during the evening at various possible prices.

The estimate from the study is that a change in the price equal to $1 per drink causes light drinkers to change their consumption on average by 0.5 drinks per night. However, a change in price of $1 causes heavy drinkers to change their consumption on average by 1.0 drink per night. For both groups a typical consumer will not consume anything once the price reaches $9 per drink. (Customers might instead go to another bar or not go to a bar at all.)

(Note the distinction between dQ/dP and dP/dQ, which is its inverse.) Draw an inverse demand curve for a typical light drinker and for a typical heavy drinker on the same diagram. Explain your diagram. Write equations for the curves in slope-intercept form.

If 300 people visit the bar on a typical evening, with 200 people being light drinkers and 100 people being heavy drinkers, draw an overall (inverse) demand curve for all of the consumers combined. (A good way to start is with a price of $9. Then determine what would happen if the price were reduced all the way to zero. You would then be able to plot on a diagram the total quantity demanded at $9 and the total quantity demanded at $0. Connect the two points involved with a straight line and determine its slope.)

What is the slope and what is the intercept for this (total) demand curve? Write an equation in slope-intercept form.

Recall that, in the case of a straight-line demand curve, the slope of the marginal revenue line for a company that does not practice price discrimination is double the slope of the (total) market demand curve.        

If the marginal cost of making drinks (the alcohol, the bartender’s labor, and the amortized cost of purchasing glasses and cleaning them repeatedly) is constant at $5 per drink, and if no cover charge is assessed, what is the best price to charge for drinks? How many drinks would be sold on a typical evening? What would your profits be? Show your work. What would be the point price elasticity of demand at the profit-maximizing price? (Find the quantity where marginal revenue equals marginal cost, and then use your equation for the total demand curve to determine the price to charge.)

However, our last two-part pricing slide tells us that a monopoly user charge is too high from the standpoint of two-part pricing. If you cut your price by $1 per drink AND assess the maximum possible cover charge without causing a typical light drinker to refuse to enter the bar, would your profits improve? How high would the cover charge be? Calculate both the cover charge and your total profits. Would the new pricing increase profits? Show your work.

(Using calculus). Maybe the best price cut is not exactly $1. Write a profit equation. Profits equal total revenue minus total cost. Total cost equals $5 times the number of drinks sold. Total revenue equals the price for drinks times the number of drinks sold, PLUS 300 people times the cover charge. The cover charge equals, for a light drinker, the triangle of consumer surplus above the price but below the demand curve for a light drinker. (The area of a triangle equals one half the base times the height.)

You will take the derivative of the profit equation with respect to P or Q and set it equal to zero. For example, use the equation for the total demand curve and solve for Q in terms of P. Then in the profit equation substitute in an expression involving P in place of every ‘Q’ that was in the original profit equation. Now you can take a derivative of profits with respect to P and set the derivative equal to zero. Eventually you can solve for the exact best P, Q, and cover charge.