Mystic Beverage Company is considering purchasing a new bottling machine. The new machine costs $165,124, plus installation fees of $13,539 and will generate earning before interest and taxes of $84,143 per year over its 6-year life. The machine will be depreciated on a straight-line basis over its 6-year life to an estimated salvage value of 0. Mystic’s marginal tax rate is 0%. Mystic will require $27,354 in NWC if the machine is purchased. Determine the annual cash flow in year 3 if the machine is purchased. round your answer to two decimals

Cheetah Copy purchased a new copy machine. The new machine cost $136,000 including installation. The company estimates the equipment will have a residual value of $34,000. Cheetah Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows:

2. Prepare a depreciation schedule for four years using the double-declining-balance method.

Floki Shipbuilding is considering purchasing a new fully integrated Computer Aided Design system. The new equipment can be purchased for $800,000 plus shipping and installation costs of $60,000. The company has already spent $55,000 on rewiring the rooms for the new system. The new machine is expected to have a useful life of seven years, at which time it will have a value of $130,000. The company estimates it will save $180,000 in annual operating cash outflows. Floki's weighted average cost of capital of 11% and its corporate tax rate is 31%. The CCA rate for the new system will be 30%. Floki plans to finance the new equipment with a bank loan requiring blended (i.e. principal and interest) quarterly payments of $58,000 over the next seven years. Use of this new system will reduce net operating working capital by $45,000.

Should Floki's Shipbuilding purchase this equipment? Show your work.

How does the State of New York rank in health care quality? What does your New York do well? What can New York do better and how?

“We really need to get this new material-handling equipment in operation just after the new year begins. I hope we can finance it largely with cash and marketable securities, but if necessary we can get a short-term loan down at MetroBank.” This statement by Beth Davies-Lowry, president of Intercoastal Electronics Company, concluded a meeting she had called with the firm’s top management. Intercoastal is a small, rapidly growing wholesaler of consumer electronic products. The firm’s main product lines are small kitchen appliances and power tools. Marcia Wilcox, Intercoastal’s General Manager of Marketing, has recently completed a sales forecast. She believes the company’s sales during the first quarter of 20x1 will increase by 10 percent each month over the previous month’s sales. Then Wilcox expects sales to remain constant for several months. Intercoastal’s projected balance sheet as of December 31, 20x0, is as follows: Cash .................................................................................................................................................. $ 35,000 Accounts receivable ............................................................................................................................ 270,000 Marketable securities .......................................................................................................................... 15,000 Inventory ............................................................................................................................................ 154,000 Buildings and equipment (net of accumulated depreciation) ................................................................... 626,000 Total assets ........................................................................................................................................$1,100,000 Accounts payable ................................................................................................................................ $ 176,400 Bond interest payable .......................................................................................................................... 12,500 Property taxes payable ........................................................................................................................ 3,600 Bonds payable (10%; due in 20x6) ....................................................................................................... 300,000 Common stock ................................................................................................................................... 500,000 Retained earnings ............................................................................................................................... 107,500 Total liabilities and stockholders’ equity ................................................................................................$1,100,000 Jack Hanson, the assistant controller, is now preparing a monthly budget for the first quarter of 20x1. In the process, the following information has been accumulated:

1 . Projected sales for December of 20x0 are $400,000. Credit sales typically are 75 percent of total sales. Intercoastal’s credit experience indicates that 10 percent of the credit sales are collected during the month of sale, and the remainder are collected during the following month.

2 . Intercoastal’s cost of goods sold generally runs at 70 percent of sales. Inventory is purchased on account, and 40 percent of each month’s purchases are paid during the month of purchase. The remainder is paid during the following month. In order to have adequate stocks of inventory on hand, the firm attempts to have inventory at the end of each month equal to half of the next month’s projected cost of goods sold. 3 . Hanson has estimated that Intercoastal’s other monthly expenses will be as follows:Sales salaries .............................................................................................................................................. $21,000 Advertising and promotion ............................................................................................................................ 16,000 Administrative salaries ................................................................................................................................. 21,000 Depreciation ................................................................................................................................................ 25,000 Interest on bonds ......................................................................................................................................... 2,500 Property taxes .............................................................................................................................................. 900 In addition, sales commissions run at the rate of 1 percent of sales.

4 . Intercoastal’s president, Davies-Lowry, has indicated that the firm should invest $125,000 in an automated inventory-handling system to control the movement of inventory in the firm’s ware-house just after the new year begins. These equipment purchases will be financed primarily from the firm’s cash and marketable securities. However, Davies-Lowry believes that Intercoastal needs to keep a minimum cash balance of $25,000. If necessary, the remainder of the equipment pur-chases will be financed using short-term credit from a local bank. The minimum period for such a loan is three months. Hanson believes short-term interest rates will be 10 percent per year at the time of the equipment purchases. If a loan is necessary, Davies-Lowry has decided it should be paid off by the end of the first quarter if possible.

5 . Intercoastal’s board of directors has indicated an intention to declare and pay dividends of $50,000 on the last day of each quarter.

6 . The interest on any short-term borrowing will be paid when the loan is repaid. Interest on Inter-coastal’s bonds is paid semiannually on January 31 and July 31 for the preceding six-month period.

7 . Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period.

Required: 1 . Describe the role of budgeting in a firm’s strategic planning.

2 . For each of the financial objectives established by the board of directors and the president of Healthful Foods Inc., determine whether John Winslow’s budget attains these objectives. Support your conclusion in each case by presenting appropriate calculations, and use the following format for your answer. Objective Attained/Not AttainedCalculations 3 . Explain why the adjustments contemplated by John Winslow are unethical, citing specific standards of ethical conduct for management accountants. (CMA, adapted) “We really need to get this new material-handling equipment in operation just after the new year begins. I hope we can finance it largely with cash and marketable securities, but if necessary we can get a short-term loan down at MetroBank.” This statement by Beth Davies-Lowry, president of Intercoastal Electronics Company, concluded a meeting she had called with the firm’s top management. Intercoastal is a small, rapidly growing wholesaler of consumer electronic products. The firm’s main product lines are small kitchen appliances and power tools. Marcia Wilcox, Intercoastal’s General Manager of Marketing, has recently completed a sales forecast. She believes the company’s sales during the first quarter of 20x1 will increase by 10 percent each month over the previous month’s sales. Then Wilcox expects sales to remain constant for several months. Intercoastal’s projected balance sheet as of December 31, 20x0, is as follows: Cash .................................................................................................................................................. $ 35,000

Accounts receivable ............................................................................................................................ 270,000

Marketable securities .......................................................................................................................... 15,000

Inventory ............................................................................................................................................ 154,000

Buildings and equipment (net of accumulated depreciation) ................................................................... 626,000

Total assets ........................................................................................................................................$1,100,000

Accounts payable ................................................................................................................................ $ 176,400

Bond interest payable .......................................................................................................................... 12,500

Property taxes payable ........................................................................................................................ 3,600

Bonds payable (10%; due in 20x6) ....................................................................................................... 300,000

Common stock ................................................................................................................................... 500,000

Retained earnings ............................................................................................................................... 107,500

Total liabilities and stockholders’ equity ................................................................................................$1,100,000

Jack Hanson, the assistant controller, is now preparing a monthly budget for the first quarter of 20x1. In the process, the following information has been accumulated:

1 . Projected sales for December of 20x0 are $400,000. Credit sales typically are 75 percent of total sales. Intercoastal’s credit experience indicates that 10 percent of the credit sales are collected dur-ing the month of sale, and the remainder are collected during the following month.

2 . Intercoastal’s cost of goods sold generally runs at 70 percent of sales. Inventory is purchased on account, and 40 percent of each month’s purchases are paid during the month of purchase. The remainder is paid during the following month. In order to have adequate stocks of inventory on hand, the firm attempts to have inventory at the end of each month equal to half of the next month’s projected cost of goods sold.

3 . Hanson has estimated that Intercoastal’s other monthly expenses will be as follows:

Sales salaries .............................................................................................................................................. $21,000

Advertising and promotion ............................................................................................................................ 16,000

Administrative salaries ................................................................................................................................. 21,000

Depreciation ................................................................................................................................................ 25,000

Interest on bonds ......................................................................................................................................... 2,500

Property taxes .............................................................................................................................................. 900

In addition, sales commissions run at the rate of 1 percent of sales. Prepare Intercoastal Electronics Company’s master budget for the first quarter of 20x1 by completing the following schedules and statements.

1 . Sales budget: 20x0 20x1 December January February March 1st Quarter

Total sales .................................................

Cash sales .................................................

Sales on account .......................................

2 . Cash receipts budget: 20x1 January February March 1st Quarter

Cash sales ................................................................

Cash collections from credit sales made during current month ...................................

Cash collections from credit sales made during preceding month ...............................

Total cash receipts ....................................................

3 . Purchases budget: 20x0 20x1 December January February March 1st Quarter

Budgeted cost of goods sold .....................................

Add: Desired ending inventory ............................

Total goods needed ............................

Less: Expected beginning inventory .......................

.Purchases .........................................

4 . Cash disbursements budget: 20x1 January February March 1st Quarter

Inventory purchases:

Cash payments for purchases during the current month* .................................

Cash payments for purchases ................................

during the preceding month† .............................

Total cash payments for inventory purchases ..........................................

Other expenses: Sales salaries .......................................................

Advertising and promotion .....................................

Administrative salaries ..........................................

Interest on bonds‡ .................................................

Property taxes‡ .....................................................

Sales commissions ...............................................

Total cash payments for other expenses .................................................

Total cash disbursements ..........................................

*40% of the current month’s purchases (schedule 3).†60% of the prior month’s purchases (schedule 3).‡Bond interest is paid every six months, on January 31 and July 31. Property taxes also are paid every six months, on February 28 and August 31.

5 . Complete the first three lines of the summary cash budget. Then do the analysis of short-term financing needs in requirement (6). Then finish requirement (5). Summary cash budget:

6. Analysis of short-term financing needs:

7. Prepare Intercoastal Electronics’ budgeted income statement for the first quarter of 20x1. (Ignore income taxes.)

8 . Prepare Intercoastal Electronics’ budgeted statement of retained earnings for the first quarter of 20x1.

9 . Prepare Intercoastal Electronics’ budgeted balance sheet as of March 31, 20x1. ( Hint: On March 31, 20x1, Bond Interest Payable is $5,000 and Property Taxes Payable is $900.)

Cheetah Copy purchased a new copy machine. The new machine cost $114,000 including installation. The company estimates the equipment will have a residual value of $28,500. Cheetah Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows: Year Hours Used 1 2,000 2 2,000 3 2,000 4 3,200 2. Prepare a depreciation schedule for four years using the double-declining-balance method. (Hint: The asset will be depreciated in only two years.) (Do not round your intermediate calculations.) Need help with this question, Thank You

Cheetah Copy purchased a new copy machine. The new machine cost $114,000 including installation. The company estimates the equipment will have a residual value of $28,500. Cheetah Copy also estimates it will use the machine for four years or about 8,000 total hours. Actual use per year was as follows: Year Hours Used 1 2,000 2 2,000 3 2,000 4 3,200 3. Prepare a depreciation schedule for four years using the activity-based method. (Round your "Depreciation Rate" to 3 decimal places and use this amount in all subsequent calculations.) Anything helps!

Your company is considering launching a new product. Designing the new product has already cost $500,000. The company estimates that it will sell 750,000 units per year of $3.2 per unit and variable non-labor costs will be $1 per unit. Production will end after year 3. New equipment costing $1 million will be required. The equipment will be depreciated to zero using the 7-year MACRS schedule. You plan to sell the equipment for book value at the end of year 3. Your current level of working capital is $300,000. The new product will require the working capital to increase to a level of $380,000 immediately, then to $400,000 in year 1, in year 2 the level will be $350,000, and finally in year 3 the level will return to $300,000. Your tax rate is 30%. The discount rate for this project is 11%. Do the capital budgeting analysis for this project and calculate its NPV.

“We really need to get this new material-handling equipment in operation just after the new year begins. I hope we can finance it largely with cash and marketable securities, but if necessary we can get a short-term loan down at MetroBank.” This statement by Beth Davies-Lowry, president of Intercoastal Electronics Company, concluded a meeting she had called with the firm’s top management. Intercoastal is a small, rapidly growing wholesaler of consumer electronic products. The firm’s main product lines are small kitchen appliances and power tools. Marcia Wilcox, Intercoastal’s General Manager of Marketing, has recently completed a sales forecast. She believes the company’s sales during the first quarter of 20x1 will increase by 10 percent each month over the previous month’s sales. Then Wilcox expects sales to remain constant for several months. Intercoastal’s projected balance sheet as of December 31, 20x0, is as follows:

Jack Hanson, the assistant controller, is now preparing a monthly budget for the first quarter of 20x1. In the process, the following information has been accumulated:

1. Projected sales for December of 20x0 are $500,000. Credit sales typically are 70 percent of total sales. Intercoastal’s credit experience indicates that 20 percent of the credit sales are collected during the month of sale, and the remainder are collected during the following month.

2. Intercoastal’s cost of goods sold generally runs at 70 percent of sales. Inventory is purchased on account, and 30 percent of each month’s purchases are paid during the month of purchase. The remainder is paid during the following month. In order to have adequate stocks of inventory on hand, the firm attempts to have inventory at the end of each month equal to half of the next month’s projected cost of goods sold.

3. Hanson has estimated that Intercoastal’s other monthly expenses will be as follows:

   Sales salaries	$	34,000
   Advertising and promotion		16,000
   Administrative salaries		34,000
   Depreciation		20,000
   Interest on bonds		3,600
   Property taxes		900

   In addition, sales commissions run at the rate of 1 percent of sales.

4. Intercoastal’s president, Davies-Lowry, has indicated that the firm should invest $125,000 in an automated inventory-handling system to control the movement of inventory in the firm’s warehouse just after the new year begins. These equipment purchases will be financed primarily from the firm’s cash and marketable securities. However, Davies-Lowry believes that Intercoastal needs to keep a minimum cash balance of $40,000. If necessary, the remainder of the equipment purchases will be financed using short-term credit from a local bank. The minimum period for such a loan is three months. Hanson believes short-term interest rates will be 10 percent per year at the time of the equipment purchases. If a loan is necessary, Davies-Lowry has decided it should be paid off by the end of the first quarter if possible.

5. Intercoastal’s board of directors has indicated an intention to declare and pay dividends of $75,000 on the last day of each quarter.

6. The interest on any short-term borrowing will be paid when the loan is repaid. Interest on Intercoastal’s bonds is paid semiannually on January 31 and July 31 for the preceding six-month period.

7. Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period.

Required:

Prepare Intercoastal Electronics Company’s master budget for the first quarter of 20x1 by completing the following schedules and statements.

I need both of these, thanks!

Today, it’s January the 1^st, 2020. A New Year Means New Opportunities to make money investing in bonds.

You are the investment manager of a Bond Fund.

You have the following three bonds in portfolio that needs re-evaluation:

1. Bond 1 ABC
2. Bond 2 DEF
3. Bond 3 XYZ

For more information about the three bonds, please take a look at the bottom of this page.

You expect that market interest rates will remain stable for the next 5 years at 3%, but after year 5, you expect the yield curve to go up = interest rates will go to 4% for year 6-10.  

1. What is the Fair Value of Bond 2? Show calculations

Bond 2 DEF 2019-2024 (Jan 1 issued, paid back Dec 31 2024)

Coupon rate 4%, Annual Coupons

Current Price $1.023

Par Value $1.000