1. The Robinson Diner, managed by Ina Fay, needs your assistance in preparing its 20X8 operating budget. Since the diner is a sole proprietorship, it will not pay income taxes. Information is in the Excel.
   1. Prepare the operating budget for 20X8. (9 points)

Mt. Olive Pickle Co. exports pickle products to the Eurozone and invoices its customers in U.S. dollars. Aldi in Germany has purchased​ $1,000,000 of pickle products from Mt.​ Olive, with payment due in 6 months. The payment will be made with a​ bankers' acceptance issued by Deutsche Bank at a fee of​ 2.65% per annum. Mt. Olive has a WACC of​ 9.0% per annum. If Mt. Olive holds this acceptance to​ maturity, what is its annualized percentage​ all-in-cost (AIC). Assume a​ 360-day year.
A.
​11.69%
B.
​11.99%
C.
​12.42%
D.
​12.89%

Here are the abbreviated financial statements for Planner’s Peanuts:

a. If sales increase by 20% in 2020 and the company uses a strict percentage of sales planning model (meaning that all items on the income and balance sheet also increase by 20%), what must be the balancing item?

b. What will be the value of this balancing item?

The state’s Secretary of Education is considering the purchase of a new computer for $100,000. A cost study indicates that the new computer should save the Department of Education $30,000, measured in real dollars, during each of the next eight years. The real interest rate is 20 percent and the inflation rate is 10 percent. As a governmental agency, the Department of Education pays no taxes. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Exercise 16-39 Part 1 Required: Compute the nominal interest rate. (Enter your answer as a decimal not as a percentage (e.g., enter 12% as 0.12).

We are evaluating a project that costs $842,318, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 56,424 units per year. Price per unit is $37, variable cost per unit is $18, and fixed costs are $423,844 per year. The tax rate is 35%, and we require a return of 22% on this project.

In percentage terms, what is the sensitivity of NPV to changes in the units sold projection? (Round answer to 2 decimal places. Do not round intermediate calculations)

Topic: Sensitivity Analysis

Decide on the two grocery stores to use in this activity

Decide on the 15 products you want to compare.

The brand name, product, and size have to be exactly the same at each store. Therefore, do not compare generic brands as they have different names at different stores.

You may have to wait until your visit to the first store to determine the “size” as you may not be aware of the different size packages for different products.

Use a variety of products to get a good representation of all items at the stores.

At each store, record the price of each product on your list. (A question always comes up whether to use a sales prices or a club card price. You should use the price of the item that you’d pay on the particular day you visit the store.)

If you didn’t record the prices in an electronic spreadsheet (such as an Excel spreadsheet) at each store, do so after you collect all your data.

Questions to answer after collecting your data

The question of interest is, “Are the items at one of the two grocery stores in your study more expensive, on average, than the other store?”

Answer these questions to answer the question of interest. (R tutorial 2 may be helpful in answering some of these questions.)

1.   (1 point) Give the two stores you are comparing and a personal motivation on why you chose those two stores.

2.   (2 points) Give a brief summary of how you chose the 15 items you used in the study. Do you feel these items are representative of all items at the store? (In other words, do you feel that you’ll be able to answer the question of interest based the items in your sample?) Why or why not?

3.   (3 points) What method of inference you used and why? (Include a check of the conditions to use that particular method. If you use a graph to assess any condition, include the graph) (Hint: think about the samples you took – are the samples independent or dependent?)

4.   (3 points) State the null and alternative hypotheses in statistical notation. Define any parameters used.

5.   (2 points) Obtain and include an appropriate graphical display that will allow you to make an initial guess as to whether you feel the null hypothesis will be rejected or not. (Hint: think about what method you will be using to perform the hypothesis test.) Comment on whether or not you feel the null hypothesis will be rejected and why or why not.

6.   (1 point) Perform the analysis in R. Report the test-statistic (with degrees of freedom) and p-value.

7.   (3 points) State a conclusion in the context of the problem that answers the question of interest supported with the p-value obtained in #6.

8.   (3 points) Use R to construct a 95% confidence interval for the average difference in prices between the two stores. Include and interpret the confidence interval in the context of the problem. (3 pts)

9.   (2 points) Which store would you shop at? Why?

10. (2 points) Provide a copy of your data.

DATA:

Vons:

Almond Milk                                       3.49

Strawberry pop tarts                           2.59

1 lb Bananas                                        .69

Head lettuce                                         1.69

Pace Salsa                                             3.39

Ball park beef franks                          4.49

Ball park buns                                      2.49

Kraft American Cheese                     5.99

Crest toothpaste                                  4.00

Strawberries                                          3.50

Special K                                               4.99

Hidden Valley Ranch                         3.99

Core Water                                           1.99

Jif Peanut Butter                                  3.09

Egglands best                                       3.99

Smiths:                 

Almond Milk                                        3.19

Strawberry pop tarts                            2.29

1 lb Bananas                                        .59

Pace Salsa                                             3.29

Head lettuce                                         .99

Ball Park Beef Franks                        4.99

Ball Park Buns                                     2.99

Kraft American Cheese                      3.19

Crest toothpaste                                  2.99

Strawberries                                          2.50

Special K                                               2.49

Core Water                                           1.50

Jif Peanut Butter                                  2.79

Hidden Valley Ranch                         3.29

Egglands Best                                      2.89

Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $300,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $100,000 are allocated based on the number of employees. The costs of operating departments A and B are $160,000 and $240,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows:

4) Using the direct method, what amount of Maintenance Department costs will be allocated to Department B?

A) $96,000

*B) $100,000

C) $110,000

D) $122,000

5) Using the direct method, what amount of Personnel Department costs will be allocated to Department B? $75,000

6) Using the step-down method, what amount of Maintenance Department cost will be allocated to Department B if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up)

A) $84,143

B) $69,231

C) $66,734

D) $71,443

7) Using the direct method, what amount of Maintenance Department costs will be allocated to Department A?

8) Using the direct method, what amount of Personnel Department costs will be allocated to Department A?

A) $25,000

B) $28,000

C) $30,000

D) $20,000

9) Using the step-down method, what amount of Maintenance Department cost will be allocated to Department A if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up)

Coyote Ltd, a private company reporting under ASPE, reported the following for the years ended May 31, 2017, and 2016

Coyote Ltd.

Balance sheet May 31

Additional information

1. Profit for 2017 was $108,000

2. common shares were issued for $50,000

3. Land with a cost of $50,000 was sold at a loss of $20,000

4. Purchased land with a cost of $100,000 with a $55,000 down payment and financed the remainder with a mortgage note payable.

5. No equipment was sold during 2017

Instruction:

1. Prepare a cash flow statement for the year using the indirect method.

2. Is it unfavorable for a company to have a net cash outflow from financing activities?

3. Using horizontal analysis, calculate the percentage change between 2016 and 2017.

4. Using vertical analysis, calculate the percentage of the base amount for each year.

5. Based on your calculation in part (3) and (4), identify any significant changes from 2016 to 2017.

The Collins Co. has just gone public. Under a firm commitment agreement, the company received $33.50 for each of the 4.25 million shares sold. The initial offering price was $35.90 per share, and the stock rose to $44.00 per share in the first few minutes of trading. The company paid $920,000 in legal and other direct costs and $280,000 in indirect costs.
  
What is the net amount raised? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the nearest whole number, e.g., 32.)
  
Net amount raised            $
  
What are the total direct costs? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the nearest whole number, e.g., 32.)
  
Direct costs            $
  
What are the total indirect costs? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the nearest whole number, e.g., 32.)
  
Indirect costs            $
  
What are the total costs? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the nearest whole number, e.g., 32.)
  
Total costs            $
  
What was the flotation cost as a percentage of funds raised? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
  
Flotation cost percentage             %