1. If you are offered to invest an amount of $ 100,000 in a business opportunity that expected to achieve operating cash inflow after considering taxes (net of taxes & before depreciation) in the future as follows:

Year (1) $ 32,000, Year (2) $ 35,000, Year (3) $ 40,000, & Year (4) $ 25,000

Would you accept this business opportunity if the required rate of returns is 15%?

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2. If you have the following information about an investment opportunity:
   1. Initial investment (cash out- required capital) is $ 500,000
   2. Expected operating cash inflows( after considering taxes) in year (1) $ 200,000, in year (2) $ 260,000, in year (3) $ 250,000, & in year (4) $ 150,000

Calculate the payback period, the net present value if the cost of capital is % 15%, & also calculate the internal rate of return?

As an intern in a manufacturing company, you are assigned to evaluate two alternative production quality-tracking systems. System I costs $285 000 and has three-year life. The before-tax cash operating costs are $62 000 per year. System II costs $420 000, has a five year life with the after tax costs of $34 000 per year. For both systems, straight-line depreciation is used. The resulting book value will be zero for both systems but the estimated value is around 10% of the purchase price. The tax rate is 30% and the cost of capital is 10%. Evaluate the after-tax cash flows for both alternatives and find the best alternative by considering equivalent annuities (more precisely equivalent annual cost, EAC).

St. Johns River Shipyards is considering the replacement of an 8-year-old riveting machine with a new one that will increase earnings before depreciation from $24,000 to $46,000 per year. The new machine will cost $80,000; and it will have an estimated life of 8 years and no salvage value. The new machine will be depreciated over its 5-year MACRS recovery period, so the applicable depreciation rates are 20%, 32%, 19%, 12%, 11%, and 6%. The applicable corporate tax rate is 40%, and the firm's WACC is 10%. The old machine has been fully depreciated and has no salvage value. Should the old riveting machine be replaced by the new one? Explain your answer. Show your calculation of the after-tax cash flows, a timeline with the after-tax cash flows, and calculate the NPV.

Some new production machinery has a first cost of $100,000 and a useful like of 10 years. Its estimated operating and maintenance costs are $10,000 the first year, which will increase annually by $4000. The asset’s before-tax market value will be $50,000 at the end of the first year and then will decrease by $5000 annually. This property is a 7-year MACRS property. The company uses a 6% after tax MARR and is subject to a combined federal/state tax rate of 40%. Calculate the after tax cash flows. The spreadsheet also needs to be able to use WACC in place of a given interest rate. The spreadsheet needs to accommodate different tax rates, and must include ATCF for O&M and Depreciation and ATCFs of disposal if the equipment is sold in each of the 10 years. Combine these to Identify the optimal life.

Ron Abrams, VP Operations for Wilson Bros. has come wandering into your office muttering under his breath (clearly exasperated) after reading the financial statements for one of the plants in Western Europe. After composing himself somewhat he says, "How can a Canadian finance executive sign off on these statements? They look nothing like any statement I’ve seen in Canada before! I know we paid a translator to present these in English, but I cannot make heads or tails of these. Are we profitable there or not?" Knowing what you have read about financial statements briefly describe if these financial statements could be correct, and if so why? Provide constructive feedback to at least two other students’ postings.

managerial accounting

partial income statements for Sherwood company summarized for a four year period show the following

2015    2016 2017 2018

net sales    2,200.000    2,600.000    2,700.000 3,200.000

cost of goods sold    1,496.000    1,742.000    1,863.000 2,176.000

gross profit 704.000 858.000 837.000 1,024.000

an audit reveled that in determining these amounts, the ending inventory for 2016 was overstated by $22,000. the inventory balance on December 31, 2017. was accurately stated. the company uses a periodic inventory system

1\ restate the partial income statements to reflect the correct amounts after fixing the inventory error

2\ compute the gross profit percentage for each year (a) before the correction and (b) after the correction

2.a\ does the pattern of gross profit percentage lend confidence to your corrected amount

Portions of the financial statements for Parnell Company are provided below.

Required:
2. Prepare the cash flows from operating activities section of the statement of cash flows for Parnell Company using the indirect method. (Enter your answers in thousands (i.e., 10,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.)

Benjamin is an American investor seeking to evaluate an investment opportunity in Motorola Solutions Inc. On the other side of the globe, Desmond from Singapore is also contemplating the same choice. They have access to the following information in US dollar terms:
Table 2.1: Dividend Payout Schedule for Motorola Solutions Inc.
Both enter an investment worth 50 shares each from their respective countries on April 15, 2019 at a per share price of $141.44 and exit the market on March 12, 2020 at a price of $145.24. Benjamin falls in the ordinary income tax-bracket of 28% while Desmond’s foreign investment income is taxed at 15%. For their investment horizon the exchange rate has moved as follows:
Table 2.2: Exchange Rate Movements during Investment Horizon
Date Exchange Rate*
April 15, 2019
SGD1.35291/$
June 13, 2019
SGD1.3669/$
September 12, 2019
SGD1.37774/$
December 12, 2019
SGD1.35719/$
March 12, 2020
$0.71628/SGD
March 12,2020
$0.70514/SGD
* SGD: Singapore Dollar

Question 1
Compute the before-tax HPR and IRR for Benjamin based on USD earnings.

Question 2
Compute the afer-tax HPR and IRR for Benjamin based on USD earnings
page 5

Question 3
Repeat the exercises in Questions 1 and 2 above for Desmond in terms of Singapore Dollars.

Question 4
Do both investors earn the same HPR and IRR? Explain the role of exchange rates and FOREX risk in this context. Who faces this risk? Is the risk worth it in this scenario? If the HPR and IRR are different for both investors, can you deduce the rate at which the USD may have appreciated/depreciated over the investment horizon?

Portions of the financial statements for Hawkeye Company are provided below.

Problem 21-9 (Algo) Part 1

Required:
1. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the direct method. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.)

Cash flows from operating activities:

NET CASH FLOWS FROM OPERATING ACTIVITIES

Required:
2. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the indirect method. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.)

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