A project with an up-front cost at t = 0 of $1500 is being considered by Nationwide Pharmaceutical Corporation (NPC). (All dollars in this problem are in thousands.) The project's subsequent cash flows are critically dependent on whether a competitor's product is approved by the Food and Drug Administration. If the FDA rejects the competitive product, NPC's product will have high sales and cash flows, but if the competitive product is approved, that will negatively impact NPC. There is a 75% chance that the competitive product will be rejected, in which case NPC's expected cash flows will be $500 at the end of each of the next seven years (t = 1 to 7). There is a 25% chance that the competitor's product will be approved, in which case the expected cash flows will be only $25 at the end of each of the next seven years (t = 1 to 7). NPC will know for sure one year from today whether the competitor's product has been approved.

NPC will proceed with the investment today to take advantage of the untapped market potential and at the end of the projects life, after finding out about the FDA,s decision about the demand for competitors product, they will decide wether or not to renew the patent and return the project. The project return's up-front cost (at t=7) will remain at $1,500, and the subsequent cash flows will remain unchanged and will be recieved for seven additional years (t=8...14). They will only return the project if the return of the project adds value.  

Assuming that all cash flows are discounted at 10%, what is the NPV of the project with and without growth option?

Cost of debt with fees. Kenny Enterprises will issue a bond with a par value of ​$1,000​, a maturity of twenty​ years, and a coupon rate of 8.6​% with semiannual​ payments, and will use an investment bank that charges ​$30 per bond for its services. What is the cost of debt for Kenny Enterprises at the following market​ prices?

a.  ​$920.06

b.  ​$1,008.58

c.  ​$1,092.49

d.  ​$1,170.24

 Understand and know how to apply the cost principle

 Know and understand how to measure Goodwill (GW), subsequent valuation of GW, and reporting of GW.  Understand and measure capitalization of interest for self-constructed assets; know how to calculate amounts capitalized and amounts expensed.

 Differentiate between non-monetary exchanges with and without commercial substance; know how to measure amounts for non-monetary exchanges with and lacking commercial substance.

 Understand the R&D rules for U.S. GAAP and IFRS; differentiate between internal and external R&D

 Understand the subsequent valuation of PPE consistent with U.S. GAAP

 Understand the valuation options for PPE consistent with IFRS  Know how to apply the revaluation options under IFRS

 Understand and measure amount related to the disposal of PPE

 Know how to apply the different depreciation methods and PPE related changes in principle and estimates

 Distinguish between the equity method, the fair value method, and consolidations

 Know how to apply the equity method (entries, account balances, measurement of related amounts); consider the effect of a mid-year acquisition on income and dividends recognized

 Know and understand how investments accounted for under the fair value method are categorized, measured/valued, recognized, and reported

 Know and understand:

 The nature of bonds; how to calculate the issue price, the periodic interest and amortization under the effective interest method; how to recognize bond-related amounts (issuance, interest, at maturity); how to prepare the related balance sheet presentation. o how issuance between interest periods affects accrual of interest for first period. Understand the limited applicability of straight-line amortization.

 Know how to measure and recognize bond-related amounts for early extinguishment.

 Differentiate between operating and capital leases o Differentiate between the types of capital leases  Know how to prepare lessee’s and lessor’s journal entries

Explain how airlines use 'Route Optimization' in order to save the cost.

A project with an up-front cost at t = 0 of $1500 is being considered by Nationwide Pharmaceutical Corporation (NPC). (All dollars in this problem are in thousands.) The project's subsequent cash flows are critically dependent on whether a competitor's product is approved by the Food and Drug Administration. If the FDA rejects the competitive product, NPC's product will have high sales and cash flows, but if the competitive product is approved, that will negatively impact NPC. There is a 75% chance that the competitive product will be rejected, in which case NPC's expected cash flows will be $500 at the end of each of the next seven years (t = 1 to 7). There is a 25% chance that the competitor's product will be approved, in which case the expected cash flows will be only $25 at the end of each of the next seven years (t = 1 to 7). NPC will know for sure one year from today whether the competitor's product has been approved.

NPC will proceed with the investment today to take advantage of the untapped market potential and at the end of the project's life, after finding out about the FDA's decision about the demand for competitor's product, they will decide whether or not to renew the patent and rerun the project. The project rerun's up-front cost (at t=7) will remain at $1500, and the subsequent cash flows will remain unchanged and will be received for seven additional years (t=8...14).

They will only rerun the project if the rerun of the project adds value. Assuming that all Cash Flows are discounted at 10%, what is the NPV of the project with and without the growth option?

The management of Urbine Corporation is considering the purchase of a machine that would cost $320,000 would last for 5 years, and would have no salvage value. The machine would reduce labor and other costs by $75 ,000 per year. The company requires a minimum pretax return of 12% on all investment projects. (Ignore income taxes in this problem.) The net present value of the proposed project is closest to:

— $72 305
–$9,625
–$26,945
–$49,626

A firm can lease a truck for 4 years at a cost of $36,000 annually. It can instead buy a truck at a cost of $86,000, with annual maintenance expenses of $16,000. The truck will be sold at the end of 4 years for $26,000.

a. What is the equivalent annual cost of buying and maintaining the truck if the discount rate is 10%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Explain what a variance is, why it is important, and what role it plays in cost control. Then, find a news article not older than 5 years of a healthcare facility that managed or is managing to control costs. Provide a brief background, reasons why they must control costs, and what they are doing effectively to control costs.

As a restaurant owner, why would it be important to pay attention to Labor, and cost of goods sold?

Im creating a Master Budget from a business owner's perspective and Im needing help with this part of my Master Budget

Cost Data:

Cleaning supplies                $1.80q

Electricity           $1,200 +   $.15q

Rent        $8,000

Larry expects to wash 9,000 cars at an average price of $4 per wash in August.

1. what is Larry planned budget?

2. Larry actually washes 8,800 cars in August. What’s Larry’s flexible budget?

Actual Results (8,800 washes)

Revenue $34,900

Cleaning supplies             17,300

Electricity     2,670

Rent     8,000

Total Expense

Operating income         $ 6,930

Prepare a flexible budget performance report that shows the activity variances and the revenue and spending variances for August.