A new rail car costs $100,000 and is expected to last for twenty years, assuming that $20,000 is spent on a major overhaul at the end of year 10. Routine servicing and maintenance are expected to cost $2,000 per year. The car is expected to be used in revenue service for 300 days per year. What is the equivalent cost per-day-in-use over the twenty-year life of the car, assuming a discount rate of 6%, 8%, 10%

Please add formula answer included

1. Bill sold 3 times as many cars as Doug last month. Laurel sold 45 cars, which was 1 1/2 times as many cars as Bill. How many cars did Doug sell? answer is 10 cars
2. 2. The local grocery store sells two cans of soup for $1.28. It has a special sale of six cans for $3.12. A customer buys 12 cans at the special sale price. How much did the customer save over the regular price? answer is 1.44

3. A hotel has 15 floors. Each floor has 26 single-person rooms and 38 two-person rooms. What is the total guest capacity at the hotel? answer is 1530

4. Linda leaves Boise to travel the 2,160 miles to Austin, driving at a speed of 55 mph. Mark leaves Austin driving the same 2,160 mile route to Boise at 65 mph. How many miles will Mark have traveled when they meet? (Hint – distance = speed x time) answer is 1170 miles

5. Autzen Stadium in Eugene holds 59,000 screaming Duck fans. The games have been sold out for years. 18,500 fans walk to the game, 12,000 take the local bus and the remainder drive and park at the stadium. The average car brought 4 people. On average, how many cars parked at the stadium? answer is 7125

6. You are in charge of organizing the annual stockholders’ meeting and luncheon for your company, Making Big Bucks Now. The meal will cost $13 per person, entertainment will cost $2,100, facility rental is $880, invitations and annual reports printing costs are $2,636, and other expenses come to $1,629. If 316 stockholders plan to attend, what is the total cost of the luncheon? What is the cost per stockholder? answer is $11,353 and also $35.93

Joey Joystick is a computer programmer. While he was in his final year of university studies, he worked as an intern with a local electronic games producer, Great Games Pty Ltd. Joey impressed his supervisors with his insightful comments and other input on design work. They were so impressed with his work on one design, Crypt Force, that they gave him part credit for it and paid him a general bonus for it. Crypt Force ultimately won an industry award and proved to be a big seller for the company. After Joey’s university graduation ceremony, he was ushered aside by a Great Games executive who showed him a document and said: “We’re very impressed by your work, Joey. We’d like you to join us permanently— we’re sure you’ll be happy with the deal we can offer you.” The document was a contract of employment which contained the following clauses:

1. The duration of the contract is three (3) years.

9. The employee (Joey) agrees that he will not for the duration of the employment contract or for a period of one year after the conclusion of the employment undertake design activities in Australia for the purposes of the production of electronic games or any other form of entertainment.

The starting salary under the contract was that normally paid to a senior designer, which was a position a new designer would not usually attain until he or she had worked with Great Games for three years. Joey happily signed the agreement. After two years with Great Games, Joey was approached by a film production company, Computer Animated Films Inc (CAN). Joey agreed with CAN that, for a salary five times what he was getting paid by Great Games, he would immediately start work as part of a team producing Cosmic Armada, a feature-length computer animated film. As part of the deal, Joey would also work on a spin-off Cosmic Armada electronic game. Advise Great Games whether it can prevent Joey from working for CAN.

You are the audit partner at Preston & Associates, a mid-tier audit firm. You are responsible for the audits of the following three independent entities for the year ended 30 June 2018:

1. Helping Hand Ltd is a non-profit entity. You have discovered that it has not kept substantiating vouchers or receipts for more than 65 per cent of its expenses, excluding salaries and allowances.

2. Skyscraper Ltd is a building contractor with a varying workload. In order to compensate for the irregularity of its contracted building projects, Skyscraper also purchases large vacant blocks of land that it later subdivides for the construction of houses and units. Skyscraper then sells these on its own account. Your analysis strongly suggests that the apportionment of costs to houses and units sold has been kept low in order to boost profits. In your opinion, this has resulted in the overvaluation of the unsold properties. The directors of the company do not agree, and hold to their view that the stock of properties is correctly valued.

3. Big Event Ltd arranges for popular overseas entertainment artists to perform in Australia. The band Eclipse was booked by Big Event to play in major cities across the country. Big Event’s written contract required the company to pay the band in US dollars but, in order to reduce costs, it did not hedge the amounts. Subsequent to year end, the Australian dollar fell against the US dollar and a substantial loss relating to the band’s tour was predicted. The management of Big Event tried unsuccessfully to renegotiate the band’s contract and has been unable to obtain finance to cover the expected shortfall. Big Event has now cancelled the tour and expects a substantial claim from Eclipse. It is clear to you, as the auditor, that Big Event does not have the income, cash or other assets to sustain such a loss.

REQUIRED

Assuming that all amounts involved are material, identify and discuss the most likely auditor’s opinion that you would issue on each financial report for the year ending 30 June 2018.

1. Business risk is concerned with the operations of the firm. Which of the following is not associated with (or not a part of) business risk?

a. Demand variability.

b. Sales price variability.

c. The extent to which operating costs are fixed.

d. Changes in required returns due to financing decisions.

e. The ability to change prices as costs change.

2. From the information below, select the optimal capital structure for Minnow Entertainment Company.

a. Debt = 40%; Equity = 60%; EPS = $2.95; Stock price = $26.50.

b. Debt = 50%; Equity = 50%; EPS = $3.05; Stock price = $28.90.

c. Debt = 60%; Equity = 40%; EPS = $3.18; Stock price = $31.20.

d. Debt = 70%; Equity = 30%; EPS = $3.31; Stock price = $30.40.

e. Debt = 80%; Equity = 20%; EPS = $3.42; Stock price = $30.00.

3. The firm's target capital structure is consistent with which of the following?

a. Maximum earnings per share (EPS).

b. Minimum cost of debt (kd).

c. Minimum risk.

d. Minimum cost of equity (ks).

e. Minimum weighted average cost of capital (WACC).

4. Which of the following events is likely to encourage a corporation to increase its debt ratio?

a. An increase in the corporate tax rate.

b. An increase in the personal tax rate.

c. An increase in the company's degree of operating leverage.

d. An increase in the expected cost of bankruptcy.

e. Increased uncertainty about the level of sales and output prices.

5. Which of the following is a key determinant of operating leverage?

a. Level of debt.

b. Physical location of production facilities.

c. Cost of debt.

d. Technology.

e. Capital structure.

6. The Price Company will produce 55,000 widgets next year. Variable costs will equal 40 percent of sales, while fixed costs will total $110,000. At what price must each widget be sold for the company to achieve an EBIT of $95,000?

a. $2.00

b. $4.45

c. $5.00

d. $5.37

e. $6.21

Phoenix Company’s 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units.

Required:
1&2. Prepare flexible budgets for the company at sales volumes of 14,000 and 16,000 units and classify all items listed in the fixed budget as variable or fixed.

3. The company’s business conditions are improving. One possible result is a sales volume of 18,000 units. The company president is confident that this volume is within the relevant range of existing capacity. How much would operating income increase over the budgeted amount of $334,000 if this level is reached without increasing capacity?

4. An unfavorable change in business is remotely possible; in this case, production and sales volume for the year could fall to 12,000 units. How much income (or loss) from operations would occur if sales volume falls to this level?

he Mountain Top Resort Community is an elegant, thriving four-season resort and community of over 1,200 single family homes, 1,000 time-share units, and a multimillion-dollar ski business. Guests visiting the resort can enjoy the indoor/outdoor water park, play golf on one of the two 18-hole championship golf courses, ski, snowboard, or snow tube in the winter on 14 trails that are all lighted for night skiing, or relax at the full-service spa. There are also three dining rooms, card rooms, nightly movies, and live weekend entertainment. The resort uses a computerized system to make room reservations and bill customers. Following standard policy for the industry, the resort also offers authorized travel agents a 10% commission on room bookings. Each week, the resort prints an exception report of bookings made by unrecognized travel agents. However, the managers usually pay the commissions anyway, partly because they don’t want to anger the travel agencies and partly because the computer file that maintains the list of authorized agents is not kept up-to-date. Although management has not discovered it, several employees are exploiting these circumstances. As often as possible, they call the resort from outside phones, pose as travel agents, book rooms for friends and relatives, and collect the commissions. The incentive is obvious: rooms costing as little as $100 per day result in payments of $10 per day to the “travel agencies” that book them. The scam has been going on for years, and several guests now book their rooms exclusively through these employees, finding these people particularly courteous and helpful.

Requirements

Would you say this is a computer crime? Why or why not?

Is this fraud? Why or why not?

What internal controls would you recommend that would enable the resort’s managers to prevent such offenses?

Classify the controls that you just identified as either preventive, detective, or corrective controls.

How does the matter of “accountability” (tracing transactions to specific agencies) affect the problem?

Required information

[The following information applies to the questions displayed below.]

Phoenix Company’s 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units.

The company’s business conditions are improving. One possible result is a sales volume of 18,000 units. The company president is confident that this volume is within the relevant range of existing capacity. How much would operating income increase over the 2017 budgeted amount of $219,000 if this level is reached without increasing capacity?

An unfavorable change in business is remotely possible; in this case, production and sales volume for 2017 could fall to 12,000 units. How much income (or loss) from operations would occur if sales volume falls to this level? (Enter any loss with minus sign.)

Personal Financial Plan for “Jack and Jill”

• Jack and Jill are married and a middle-aged couple.
• In order to achieve their goals, they hope to retire and must, therefore, ensure they have enough savings to cater for their needs in their golden days.
• As a married couple, they have made several investments and are not sure whether their insurance coverage is adequate.
• They are not sure whether they have enough financial resources to last them for the rest of their lives.

Personal Financial Plan Assumptions

1. Retirement:

• Jill would like to retire at age 65; and
• Jack would prefer to retire when he is 67.

2. Asset evaluation

• Cash & Cash equivalents (bank accounts/CDs/Money Market) – RM100,000
• Brokerage account (stocks/bonds) – RM315,000 current value
• Retirement Annuity (RM250,000 current value)
• Jill’s EPF - RM400,000
• Jack’s EPF account (RM520,000)
• Home is worth RM388,000 with a RM120,000 mortgage at a 4.5% interest rate
• Jack’s car is 3 years old and worth RM27,000. The loan balance is RM9,500.

3. Insurance Coverage

• Jack’s life insurance coverage is through work (RM305,000) at RM100/month.
• Jill’s life insurance coverage is a whole life policy (RM95,000 death benefit, RM25,000 cash value) at RM85/month.
• Jack has taken a disability policy to compensate him if he becomes disabled through work which replaces 60% of his income and Jane has no disability insurance.

3. Other Situation Details

• Jill is currently self-employed.
• Jack grosses approx. RM140,000 per year; Jill makes approx. RM50,000.
• They spend approximately RM6,000 a month on basic living expenses like utilities, entertainment, basic needs like food, property tax, and other expenses.
• The overall fixed income to equity ratio is about 40% fixed income and 60% equities (40/60) of all investable assets.
• The couple has not drafted a will.

A) insurance analysis

B) investment analysis

C) estate plan review