One of the most important costs in the hospitality businesses is the Cost of Sales (or Cost of Goods Sold). How is it determined? Please select the most appropriate answer from the list below.
1. It is calculated by adding up all purchases of inventory during one accounting period.
2. It is the amount of inventory available on hand. It is calculated by adding the value of individual items by counting them.
3. It is determined by adding all purchases to the beginning inventory amount, and then by subtracting the amount of inventory on hand.
4. It is calculated by multiplying the target percentage (%) predetermined by the management.
How do we determine whether the labor expense has truly grown in a year compared with that of the previous year?
1. If the current year's amount is larger than that of the previous year, it has truly grown.
2. If the current year's difference between the budgeted labor expense and the actual one than that of the previous year, then this year's labor expense has truly grown.
3. Compare each year's labor expense against the revenues amount of the relevant year. If this year's labor expense percentage (%) is larger than that of the previous year, it has truly grown.
4. Divide the current year's labor expense by the previous year's labor expense. If the result is larger than 100%, then it has truly grown.
In: Accounting
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Bill Gates is analyzing a proposed expansion of a division in Switzerland. The cost of the expansion would be SF 21 million. The cash flows associated with the project would be SF 5.8 million per year for the next 5 years. The dollar required return is 12 percent per year, and the current exchange rate is SF 1.10. The interest rate in the U.S. is 6 percent per year. The interest rate in Switzerland is 5 percent per year. Use the approximate form of interest rate parity in calculating the expected spot rates. |
| a. |
Convert the projected franc flows into dollar flows and calculate the NPV. (Do not round intermediate calculations and enter your answer in dollars, not in millions, rounded to two decimal places, e.g., 1,234,567.89) |
| b-1. | What is the required return on franc flows? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| b-2. | What is the NPV of the project in Swiss francs? (Do not round intermediate calculations and enter your answer in francs, not in millions, rounded to two decimal places, e.g., 1,234,567.89) |
| b-3. | What is the NPV in dollars if you convert the franc NPV to dollars? (Do not round intermediate calculations and enter your answer in dollars, not in millions, rounded to two decimal places, e.g., 1,234,567.89) |
In: Finance
1.) What is the entry to pay for the cost of the merchandise inventory bought for 1,000?
2.) What does this mean? 2/10, net/30
3.) What is the entry to pay for the cost of the merchandise inventory bought for 1,000 if the payment terms are 2/10, net/30 and we pay in 8 days?
4.) What is the entry to record the payment of a customer on account for merchandise inventory?
5.) What is the entry to record the payment of a customer on account for merchandise inventory for 5,000 if the payment terms are 2/10, net/30 and they pay in 8 days?
In: Accounting
An asset can be purchased today at an installed cost of $1,000. It is forecast to generate annual operating net cash inflows of $250 for the next five years and to be sold for $100 at the end of four years. (Assume that there is no income tax and that annual net cash flows occur at the end of each year.)
(a) Draw a time-line showing all the cash flows relating to this asset. (1 mark)
(b) Using a discount rate of 10% per year, what is the present value of the forecast cash inflows? (Give your answer to the nearest cent.)
(c) Using the present value you calculated in part (b), what is the net present value of this project? (Give your answer to the nearest cent.) (1 mark)
(d) If the asset is depreciated at the rate of $200 per year:
(i) What will be the accounting profit in years 1 to 4? (1 mark)
(ii) What will be the accounting profit in year 5? (1 mark)
(iii) What will be the average annual accounting profit? (1 mark)
(iv) What will be the average investment (based on the asset’s installed cost and salvage value)? (1 mark)
(v) What will be the accounting rate of return? (Give your answer in percentage points to two decimal places.)
In: Accounting
What are the challenges of estimating cost of capital for a project taken by a division in a multi-divisional firm, such as Disney, that do not exist when estimating cost of capital of the firm itself (here, Disney)? How would you deal with these challenges (at least discuss two such challenges)
In: Finance
2. Why is it critical to take into account the cost of money in assessing the financial viability of multi-year programs? Explain what is Cumulative Present Value (CPV).
In: Finance
People in the aerospace industry believe the cost of a space project is a function of the mass of the major object being sent into space. Use the following data to develop a regression model to predict the cost of a space project by the mass of the space object. Determine r2 and se.
Weight (tons) Cost ($ millions)
1.897 $ 53.6
3.019 184.4
0.453 6.4
0.978 23.5
1.058 32.6
2.100 110.4
2.404 104.6
*(Do not round the intermediate values. Round your answers to 4 decimal places.) **(Round the intermediate values to 4 decimal places. Round your answer to 3 decimal places.)
ŷ = __________ + __________ * x
r2 =_________________ **
se = ________________**
In: Statistics and Probability
Production quantity and the total cost of production are given in the form of a table.
|
Production quantity (100 tons) |
42 |
16 |
48 |
50 |
30 |
12 |
18 |
28 |
|
Total cost (1000 of Rs.) |
22 |
10 |
14 |
20 |
14 |
8 |
12 |
16 |
In: Statistics and Probability
Show the impact of the inclusion of external cost on a supply and demand graph.
In: Economics
"Machine A has an immediate cost of $13,000, and it will earn a net income of $6600 per year for a total of 7 years. Machine B has an immediate cost of $24,000, and it will earn a net income of $4600 per year for a total of 28 years. Assume that Machine A can continually be replaced at the end of its useful life with an identical replacement. Neither machine has any salvage value. Enter the annual equivalent worth of the machine that is the best alternative if the interest rate is 14.8%. If neither machine is acceptable, enter 0."
In: Finance