Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in preparation of the budgeting process.

Waterways likes to keep 10% of the next month’s unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31, 2019, totaled $181,800.

Direct Materials

Direct materials cost 80 cents per pound. Two pounds of direct materials are required to produce each unit.

Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2019, totaled 11,380 pounds. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $102,875.

Other Information

The Cash balance on December 31, 2019, totaled $101,000, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.40 per share for 5,340 shares outstanding. The company has an open line of credit with Romney’s Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 9% interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $460,000 equipment purchase is planned for February.

For the first quarter of 2020, prepare a cash budget. (Round answers to 0 decimal places, e.g. 2,520.

Entity A is a listed company that operates the cruise ship business. One of the cruise ships was purchased on 1 Oct 2011. This cruise ship is made up of three main components: (1) cruise’s fabric, (2) cabins and entertainment area and (3) fittings propulsion system.

Details of the cost of its components and their estimated useful lives are as below:

Components Original cost Depreciation basis

(1) Cruise’s fabric (hull, decks, etc.) HK$37,500,000 50 years straight-line

(2) Cabins and entertainment area fittings HK$18,750,000 15 years straight-line

(3) Propulsion system HK$12,500,000 useful life of 80,000 hours

On 30 Sep 2019, no further capital expenditure had been incurred on the cruise ship.

In the year ended 30 Sep 2019, the cruise had experienced a high level of engine trouble, which had cost Entity A considerable revenue loss and compensation costs.  The measured expired life of the propulsion system on 30 Sep 2019 was 50,000 hours. Due to the unreliability of the engines, a decision was made by Entity A on 1 Oct 2019 to replace the whole of the propulsion system at a cost of HK$17,500,000. The old propulsion system was also sold to a second-hand machinery shop with a loss on disposal of $4,250,000. The cash from the disposal was received on 20 Oct 2019.  The expected life of the new propulsion system was 160,000 hours and in the year ended 30 Sep 2020, the cruise had used its engines for 10,000 hours.

At the same time as the propulsion system replacement, Entity A took this opportunity to upgrade the cabin and entertainment facilities at a cost of HK$7,500,000 and repaint the cruise’s fabric at a cost of HK$2,500,000 respectively. After the upgrade of the cabin and entertainment area fittings, it was estimated that their remaining useful life was 10 years.

For calculating depreciation, all the works on the cruise can be assumed to have been completed on 1 Oct 2019. All residual values can be taken as NIL.

REQUIRED:

(1) Measure the depreciation expense of the Cruise’s Fabric for the year ended 30 Sep 2020.

Answer = $

(2) Measure the depreciation expense of the Cabins and entertainment area fittings for the year ended 30 Sep 2020.

Answer = $

(3) Measure the depreciation expense of the Propulsion system for the year ended 30 Sep 2020.

Answer = $

(4) Measure the carrying amount of the Cruise’s Fabric on 30 Sep 2020.

Answer = $

(5) Measure the carrying amount of the Cabins and entertainment area fittings on 30 Sep 2020.

Answer = $

(6) Measure the carrying amount of the Propulsion system on 30 Sep 2020.

Answer = $

(7) Measure the carrying amount of Entity A’s cruise ship on 30 Sep 2020.

Answer = $

(8) Measure the cash received from the sale of the old propulsion system.

Answer = $

SUBJECT is FINANCE

Free Cash Flows

Rhodes Corporation’s financial statements are shown below.

Rhodes Corporation: Income Statements for Year Ending December 31
(Millions of Dollars)

Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)

Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions.

1. What is the net operating profit after taxes (NOPAT) for 2020? Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to the nearest whole number.
2. What are the amounts of net operating working capital for both years (2020 and 2019)? Enter your answers in millions. Round your answers to the nearest whole number.

   2020: $   million

   2019: $   million

3. What are the amounts of total net operating capital for both years? Enter your answers in millions.

   2020: $   million

   2019: $   million

4. What is the free cash flow for 2020? Enter your answer in millions. Cash outflow, if any, should be indicated by a minus sign. Round your answer to the nearest whole number.

   $    million

5. What is the ROIC for 2020? Round your answer to two decimal places.

     %

6. How much of the FCF did Rhodes use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that a net use can be negative.) Enter your answers in millions.

   After-tax interest payment	$    million
   Reduction (increase) in debt	$    million
   Payment of dividends	$   million
   Repurchase (Issue) stock	$   million
   Purchase (Sale) of short-term investments	$   million

Windsor Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Windsor and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2021, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $34,970 notes, which are due on June 30, 2021, and September 30, 2021. Another note of $5,970 is due on March 31, 2022, but he expects no difficulty in paying this note on its due date. Brown explained that Windsor’s cash flow problems are due primarily to the company’s desire to finance a $300,080 plant expansion over the next 2 fiscal years through internally generated funds.

The commercial loan officer of Topeka National Bank requested the following financial reports for the last 2 fiscal years.

(a)

Compute the following items for Windsor Corporation. (Round answers to 2 decimal places, e.g. 2.25 or 2.25%.)

You found your dream house. It will cost you $300000 and you will put down $50000 as a down payment. For the rest you get a 30-year 5.5% mortgage. What will be your monthly mortgage payment in $ (assume no early repayment)?

You found your dream house. It will cost you $300000 and you will put down $30000 as a down payment. For the rest you get a 30-year 5.5% mortgage. What will be your monthly mortgage payment in $ (assume no early repayment)

You found your dream house. It will cost you $200000 and you will put down $40000 as a down payment. For the rest you get a 30-year 5.5% mortgage. What will be your monthly mortgage payment in $ (assume no early repayment)?

Explain why a firm only shuts down once the price drops to the minimum of the average variable cost (AVC) curve, rather than shutting down as soon as the price falls below the minimum of the average total cost (ATC) curve.

1. Cellular respiration is the process of breaking down organic molecules into usable energy for cellular processes.

1. Why isn’t glucose broken down in one step to make ATP?

2. What is the equation for cellular respiration?

3. What are the major steps in cellular respiration?

You found your dream house. It will cost you $300000 and you will put down $45000 as a down payment. For the rest you get a 30-year 4.5% mortgage. What will be your monthly mortgage payment in $ (assume no early repayment)?