Personal Investment Analysis Find of the cost of a bachelor's degree at the university of your choice assume additional costs of $16,000 for an additional fifth year of education to get Master's degree. Assume that all tuition is paid at the beginning of the year. A student considering this investment must evaluate the present value of cash flows from possessing a graduate degree versus holding only the undergraduate degree. Assume that the average student with an undergraduate degree is expected to earn an annual salary of $55,000 per year (assumed to be paid at the end of the year) for 10 years. Assume that the average student with a graduate Masters degree is expected to earn an annual salary of $76,000 per year (assumed to be paid at the end of the year) for nine years after graduation. Assume a minimum rate of return of 10%. Determine the net present value of cash flows from an undergraduate degree. Use the present value table provided in this chapter 26. Determine the net present value of cash flows from a Masters degree, assuming that no salary is earned during the graduate year of schooling. What is the net advantage or disadvantage of pursuing a graduate degree under these assumption? Bachelor's degree costing 43,000 Master's degree costing 59,000

In this module we learned that, despite increases in the cost, the value of higher education has increased over time. How can college be made more affordable? Revenues earned by colleges and universities come from three main sources:

1. Tuition and fees paid by students, which have increased faster than the cost of living.
2. Support from governments at the federal, state and local levels. This support is paid for through tax revenues. Even private colleges and universities obtain funding from the government, but government support has declined at all levels in recent years.
3. Alumni contributions.

What has caused the cost of college to increase so much? (Not every college has a fancy gym or an Olympic sized pool with a lazy river.) What features of your college education would you be willing to do without to make college more affordable?

What do you propose should be done to make higher education more affordable? What reasons can you provide to support your argument?

The following is six months of data on the cost and production volume to manufacture crates of skittles. In order to better predict costs, the manager is trying to understand the relationship between production volume and cost. Use the hi-lo method to determine the cost equation. Round as needed to the closest penny.  (Please report the cost equation in y=mx+b format).

Is it possible to reduce the cost of healthcare so that everyone can have access to affordable healthcare services?

Do you feel that the Patient Protection and Affordable Care Act is a good step toward reducing healthcare costs in our nation? Why or why not?

Hirsch Company acquired equipment at the beginning of 2017 at a cost of $128,000. The equipment has a five-year life with no expected salvage value and is depreciated on a straight-line basis. At December 31, 2017, Hirsch compiled the following information related to this equipment:

Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes.

Required:

1.Prepare journal entries for this equipment for the years ending December 31, 2017, and December 31, 2018, under (1) U.S. GAAP and (2) IFRS.

- Record the entry for the purchase of equipment as per U.S. GAAP.

- Record the entry for the expense on depreciation of equipment as per U.S. GAAP

- Record the entry for the purchase of equipment as per IFRS.

- Record the entry for the expense on depreciation of equipment as per IFRS.

- Record the entry for the loss on impairment of equipment as per IFRS.

- Record the entry for the loss on impairment of equipment as per U.S. GAAP.

- Record the entry for the expense on depreciation of equipment as per U.S. GAAP.

- Record the entry for the expense on depreciation of equipment as per IFRS.

2. Prepare the entry(ies) that Hirsch would make on the December 31, 2017, and December 31, 2018, conversion worksheets to convert U.S. GAAP balances to IFRS. Ignore the possibility of any additional impairment at the end of 2018.

- Record the entry for the loss on impairment of equipment due to conversion from U.S. GAAP to IFRS.

- Record the entry for the loss on impairment of equipment due to conversion from U.S. GAAP to IFRS.

- Record the entry for reversing additional depreciation already recognized due to conversion from U.S. GAAP to IFRS

A company is considering replacement of manufacturing equipment with computer controlled equipment, at a cost of $500,000, replacing equipment with a scrap value of $50,000. This will reduce defect costs by $150,000 a year. At the end of 7 years, the equipment will be replaced and will have a scrap value of $100,000. The interest charges for financing the purchase will be $25,000 a year. The new system will be housed in a building that is currently unused, with an overhead value of $10,000 a year. Utility costs will be unchanged. Machine operators will require training of $1000 each for 4 workers. These workers are scheduled for a raise of $3000 each. Because the new equipment technology is well-established for its intended use, the risk premium for the project is considered to be 2 percentage points less than the company’s WACC of 8%.                 

1.1 List the investment facts for the project:

NOTE: List all of the financial details associated with the project and designate which should be included (and which ignored) in calculating the project’s cash flows and its cost of capital.

Life of the project: 7 years

Interest rate for the project:  6% (8-2) (cost of capital to the firm adjusted for project risk)

PVIF for the project:     0.666

PVIFA for the project:     5.582

A. Initial investment: (include all cash flows - positive and negative - that occur at the beginning of the project)

B. Future cash flows: (negative and positive)

C. Lump sum: (one time)

D. Annuity: (repeated annually)

E. Costs that you will ignore: (sunk cost or otherwise)

1.2. A. Using the relevant net cash flows and cost of capital from A above, calculate the NPV for the project. (use the NPV formula and the PV tables)

Please Answer:

1.1 A.

1.1 B.

1.1 C.

1.1 D

1.1 E.

1.2 A.

Fleet Sports purchased manufacturing equipment with a cost of $200,000 at the beginning of 2016. The equipment has an estimated life of 4 years or 100,000 shoes (units of product). The estimated residual value is $20,000. During 2016, 36,000 shoes (units of product) were produced with this machinery. Determine the following:

What is the depreciation expense per unit of production using the units-of-production depreciation?

What is the total depreciation expense at December 31, 2016, using units-of-production depreciation?

What is depreciation expense for the equipment at the end of 2016 using double-declining balance depreciation?

What is depreciation expense for the equipment at the end of 2018 using double-declining balance depreciation?

Assume Fleet Sports depreciated the manufacturing equipment using the straight-line method. Prepare a depreciation table as discussed in course lecture, with column headings of Year, Depreciation Expense, Accumulated Depreciation, and Book Value.

1. You are recently appointed as a centralized “Cost Control Analyst” for one of the bank in Toronto. Head of Banking operations in Toronto Mr. Horton has asked you to analyse the cost of basic stationary as Stationary in different regions of the bank seems to be one of the highest cost. He wants you to come up with your statistical analysis with two pager report. Use Central tendencies, Standard deviation and Regression analysis techniques along with graphical representation. (30 Marks

"A firm is considering purchasing a computer system.
-Cost of system is $188,000. The firm will pay for the computer system in year 0.
-Project life: 4 years
-Salvage value in year 0 (constant) dollars: $24,000
-Depreciation method: five-years MACRS
-Marginal income-tax rate = 40% (remains constant over time)
-Annual revenue = $141,000 (year-0 constant dollars)
-Annual expenses (not including depreciation) = $75,000 (year-0 constant dollars)
If the general inflation rate is 2.1% during the project period (which will affect all revenues, expenses, and the salvage value but not depreciation), determine the INFLATION-FREE IRR' of the computer system. Enter your answer as a percentage between 0 and 100."