As for the sales forecast for Year 1 through Year 3, these are some important variables I will go to consider for sales:

Economy: The economic condition of the city, the province and the country are variables I need to consider for a sales forecast. If conditions are poor, people will spend less money on consumption. If economic conditions are great, then more people will have extra money to spend.

Competition: I need to consider the level of competition I have around me. If new competitors enter the market, that can affect my sales forecast drastically. The same goes for if my competitors drop out of the market.

Inflation: Inflation is something that effects every country, and effects the economic conditions. So, I need to consider trends of inflation (and inflation forecasts) in order to make a sales forecast.

Political Environment: I need to consider the political environment of the city, the province and the country. The political environment affects the economy and business law. If there is an election within my sales forecast period, I need to consider the potential outcomes of each election.

Seasonal Demands: I need to consider seasonal demands and trends because each season has a different demand for products. Summertime is going to require cold beverages, meanwhile winter will have a demand for hot beverages. Each season will also affect overall sales. People spend more money in the summer. A sales forecast will have to consider all these seasonal demands and changes into the model.

Where to obtain data: Government websites, Market research firms, Political experts, Stock Market data, Google Maps (search for competitors) or Drive around my area (locate competitors visually), City database, Economic analysts

Part 1

1.Are these considerations feasible? Would you change or add any considerations?

2.As a lender (someone who commits capital with the expectation of receiving financial returns) to this company, what are some numbers you want this entrepreneur to show you before you make your decision to invest your money?

The biggest challenges throughout the planning process is determining start up costs, determining inventory and determining the location of the store. The start up costs are a big challenge due to there being a number of variables such as how much inventory is smart to start off with, how much to pay in utilities (can easily fluctuate), and how much to pay in advertising the store to customers. Determining inventory is also a challenge because orders must be placed to keep up with inventory and determining a schedule for that is based on revenue, but during the planning process revenue can only be projected and not consistently known. Determining the location of the store is also a challenge, it is an extremely important decision that will make or break the success of the store. Calculating how many customers are nearby, as well as type of income (lower-class, middle-class, upper class, etc.) is also challenging.

The growth potential of my business is tremendous. I view after a few months, for there to be a solid foundation for revenue. The first few months may be tough because the public either doesn’t know about the store, or don’t have a trust built with the store yet. Once I am established, I see my store serving the community with well needed convenience products and establishing a

casual customer base. Once I’m established after a few months, I expect revenue to climb and stabilize. After a few years I expect to be financially in a great position. Some profits can be diverted to upgrades for the store, improving customer experience (maybe experiment with new and diverse products). After a few years, I see myself expanding by buying other Circle K franchises to open or try to buy established stores from owners. This would require saving up a lot of the profit but in the long run it is a great investment in my opinion.

Part 2

3.This entrepreneur mentioned some big challenges he/she would face when starting this business. Do you agree? Explain your decision

4.Evaluate the growth potential of the business. Would you agree with this entrepreneur’s vision? Why or why not?

hello chegg, please provide references from where you pick the data to answer these questions

1. BestUvClass, Inc. has the choice between two types of machines. One costs less but has a shorter life expectancy. The first machine costs $9,000, will last for two years, and produce revenues of $7,750 in the first year of operation. Operating costs will be 27 percent of revenues and the machine will be depreciated using the 3-Year MACRS schedule. The machine can be sold at the end of two years for $2,000. The initial change in net working capital will be $465. Subsequently, the change in net working capital will be 6% of the change in revenues for the next year. The cost of the first machine is expected to increase by 10 percent per year for the foreseeable future. For replacement chains, assume that the salvage value of the first machine will increase by 10 percent per year, and and initial net working capital will increase by 6 percent per year.

   The second machine will last for four years, cost $12,000, be depreciated using the 3-Year MACRS schedule, and produce revenues of $6,000 in its first year of operation. Operating costs will be 24 percent of revenues. The change in net working capital will be 4% of the change in revenues for the next year. The second machine can be sold for $500 at the end of the project's life.

   Annual revenue inflation for both projects is expected to be 6 percent. The firm's cost of capital is 14.50 percent, and its marginal tax rate is 24 percent.

   1. What are the NPVs for both projects without any consideration of replacement?

   2. Construct replacement chains for these two machines.

   3. Which machine should be selected? Why?

Have to calculate using an excel workbook.

Problem 3-3 A review of the ledger of Bonita Company at December 31, 2017, produces the following data pertaining to the preparation of annual adjusting entries. 1. Salaries and Wages Payable $0. There are eight employees. Salaries and wages are paid every Friday for the current week. Five employees receive $800 each per week, and three employees earn $550 each per week. December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December. 2. Unearned Rent Revenue $414,960. The company began subleasing office space in its new building on November 1. Each tenant is required to make a $5,720 security deposit that is not refundable until occupancy is terminated. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease. Date Term (in months) Monthly Rent Number of Leases Nov. 1 6 $6,700 5 Dec. 1 6 $6,770 4 3. Prepaid Advertising $15,600. This balance consists of payments on two advertising contracts. The contracts provide for monthly advertising in two trade magazines. The terms of the contracts are as shown below. Contract Date Amount Number of Magazine Issues A650 May 1 $7,200 12 B974 Oct. 1 8,400 24 The first advertisement runs in the month in which the contract is signed. 4. Notes Payable $58,300. This balance consists of a note for one year at an annual interest rate of 12%, dated June 1.

An exchange traded fund (ETF) is a security that represents a portfolio of individual stocks. Consider an ETF for which each share is equivalent to a portfolio of two shares of Amarillo National Bank (ANB), three shares of Canyon Buff Enterprise (CBF), and two shares of Tyson Foods (TSN). Suppose the current market price of each individual stock are shown below:

The price per share of the ETF in a normal market is:

A put is currently being traded on an underlying security. An investor buys a put option for $7 per share. The strike price is $100 per share and the option expires in three months.

a) What is the profit of this trade per share if in three months the price of the

underlying security is $117 per share?

b) How does you answer to part a) change if the price of the underlying security in

three months is $99 per share?

An exchange traded fund (ETF) is a security that represents a portfolio of individual stocks. Consider an ETF for which each share represents a portfolio of two shares of Apple Inc. (APPL), one share of Google (GOOG), and ten shares of Microsoft (MSFT). Suppose the current stock prices of each individual stock are as shown below:

Stock     Price
APPL      $200.23
GOOG   $570.51
MSFT      $29.61

If the ETF is currently trading for $1,200, what arbitrage opportunity is available? What trades would you make?

RTF Inc. has options traded on the CBOE. As a measure of its volatility, assume the stock price can either go up at $40 or down to $15. Interest rates that apply are 1%. Consider a strike 25 call option. Using this strike price and the two possible binomial prices for the stock, the dollar cash flow that a risk-free hedge will generate under each possible strike price will be?

Nazir Sdn Bhd is the largest seller of Petrochemical products in Malaysia. Traded on the Bursa Malaysia, sales exceed RM30 billion annually and market capitalization exceeds RM87 billion (as of December 31, 2019 balance sheet date). The company was incorporated in 1977. They focus on all aspects of product value including the process, development, marketing and sales of Petrochemical products, Fuel oil, Fertilizer and Diesel. On November 19, 2019 Nazir’s Board of Directors approved a new four-year, RM12 billion program to repurchase shares of Nazir’s Common Stock. At the same time, they declared a 14% increase in Dividends Per Share and a Two-For-One Stock Split. The market reacted favorably to the news and analysts interpreted the plan as a sign of financial strength and future performance. Interested in learning more about why the market reacted so strongly to the news, you should look more deeply at the financial statements of the firm.

You begin the task of finding some of the drivers that create stock value and financial strength over time. Given your limited background, you decide to focus on the last five years of income statements and an examination of key indicators such as EPS, dividends and Repurchase history.

Table 1. Income Statements for years 2015-2019 ended December 31.

ADDITIONAL INFORMATION

Required:

1. Compute BASIC EPS for each year. Re-run EPS with a modified number of shares; add back the number of shares repurchased to the weighted average number of common shares outstanding. Determine the EPS result before repurchases. Interpret the difference between the BASIC EPS to the EPS modified.

2. Compute the total payout in Ringgit, as a percent of net income, and per share. Discuss trends over time

[Total 20 marks]