Project Selection
Your company is prepared to undertake several new projects over the next five years. Each Division has submitted a number of project proposals that include the annual budgets and anticipated profit. Your company’s annual budgets for the next five years are as follows. (Amounts are X$1000)
|
YEAR |
2016 |
2017 |
2018 |
2019 |
2020 |
|
FUNDS |
3500 |
4500 |
4000 |
3450 |
4500 |
The project proposals (for a total of fifteen possible projects) are as follows:
|
Project |
2016 |
2017 |
2018 |
2019 |
2020 |
Profit |
|
1 |
400 |
230 |
330 |
400 |
230 |
1500 |
|
2 |
500 |
270 |
260 |
500 |
270 |
2000 |
|
3 |
200 |
430 |
430 |
200 |
430 |
2500 |
|
4 |
300 |
220 |
270 |
300 |
220 |
7000 |
|
5 |
450 |
500 |
400 |
450 |
500 |
4000 |
|
6 |
650 |
450 |
320 |
650 |
450 |
3000 |
|
7 |
350 |
530 |
330 |
350 |
530 |
4500 |
|
8 |
300 |
700 |
260 |
300 |
700 |
3500 |
|
9 |
500 |
800 |
430 |
500 |
800 |
1500 |
|
10 |
600 |
250 |
270 |
600 |
250 |
2000 |
|
11 |
150 |
500 |
400 |
150 |
500 |
2500 |
|
12 |
250 |
340 |
320 |
250 |
340 |
7000 |
|
13 |
220 |
400 |
250 |
220 |
270 |
4000 |
|
14 |
170 |
300 |
300 |
170 |
300 |
3000 |
|
15 |
420 |
400 |
260 |
420 |
400 |
4500 |
What project selection should your company choose? (You decide what criterion to use, but recall that this Business school.)
Please show/explain using excel solver
In: Statistics and Probability
|
Balance Sheet |
||||||||
|
For Magnificent Homeware Ltd |
||||||||
|
As At 31 March 2018 |
||||||||
|
2018 |
2017 |
2016 |
||||||
|
$(000) |
$(000) |
$(000) |
||||||
|
Current assets |
||||||||
|
Bank |
- |
- |
1,804 |
|||||
|
Accounts receivable |
5,200 |
3,250 |
1,620 |
|||||
|
Allowance for bad debts |
(210) |
(350) |
(380) |
|||||
|
Inventory |
4,120 |
2,550 |
1,850 |
|||||
|
Total current assets |
9,110 |
5,450 |
4,894 |
|||||
|
Non-current assets |
||||||||
|
Plant & equipment |
5,480 |
4,900 |
4.300 |
|||||
|
Retail shop Wellington |
2,000 |
- |
- |
|||||
|
Total non-current assets |
7,480 |
4,900 |
4.300 |
|||||
|
Total assets |
16,590 |
10,350 |
9,194 |
|||||
|
Current liabilities |
||||||||
|
Bank overdraft |
380 |
350 |
- |
|||||
|
Mortgage |
200 |
100 |
100 |
|||||
|
Accounts payable |
2,200 |
2,026 |
2,890 |
|||||
|
Total current liabilities |
2,780 |
2,476 |
2,990 |
|||||
|
Non-current liabilities |
||||||||
|
Mortgage |
3,000 |
1,600 |
1,600 |
|||||
|
Total liabilities |
5,500 |
4,076 |
4,540 |
|||||
|
Net assets |
10,810 |
6,274 |
4,654 |
|||||
|
Shareholders’ equity |
||||||||
|
Shares |
200 |
200 |
200 |
|||||
|
Retained profits |
6,074 |
4,454 |
3,036 |
|||||
|
Net profit after tax for the year |
4,536 |
1,620 |
1,418 |
|||||
|
Shareholders’ equity |
10,810 |
6,274 |
4,654 |
|||||
b) Using the financial information above, provide analytical
calculations (supported by formulae and figures) for the purpose of
reviewing the financial performance and the financial position of
Magnificent Homeware Ltd. Your focus should be to highlight matters
of significant concern and trends that appear
unusual.
c) From the analysis in (b) above, what are the audit risk factors
for inventory and accounts receivable?
d) How would the financial statement analysis in (b) above assist
to plan your audit approach for Magnificent Homeware Ltd?
e) From the information above (excluding the financial statements)
list the potential problem areas and any major concerns (where
there could be risk or material misstatement) that you will need to
consider as part of the plan for the 2018 audit for this company.
You must provide brief reasons why each of the areas you have
listed require special consideration. You should be able to comment
on at least 10 areas.
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The following tables form part of a database (Flights Database) held in a relational DBMS: employee (empNo, empName, empSalary, empPosition) aircraft (aircraftNo, acName, acModel, acFlyingRange) flight (flightNo, aircraftNo, fromAirport, toAirport, flightDistance, departTime, arriveTime) certified (empNo, aircraftNo) Where: employee contains details of all employees (pilots and non-pilots) and empNo is the primary key; aircraft contains details of aircraft and C is the primary key. flight contains details of flights and (flightNo, aircraftNo) form the primary key. certified contains details of the staff who are certified to fly an aircraft and (empNo, aircraftNo) form the primary key. Create tables (12 points)
1. Using the CREATE TABLE statement, create each of the above tables (create primary keys and foreign keys, where appropriate). (Already Done)
Now answer the questions below using SQL.
List the pilot number and names of all pilots who have executed flights where the distance covered is greater than 1000 Km. List the aircrafts who have never executed a flight to the destination ‘London’. List the flights where the flight distance equals to the flying range of the aircraft who executed it?
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B. Inventory management
The current policy is to order 100,000 units when the inventory
level falls to 35,000 units. However, forecast demand to meet
market requirements for next year is 625,000 units. The cost of
placing and processing an order is R250, while the annual cost of
holding a unit in stores is 5% of the unit purchase price. Both
costs are expected to be constant during the next year. Shop n Pay
sells a unit of the product for R15.00 at cost plus 50%. Orders are
received two weeks after being placed with the supplier. You should
assume a 350-day year and that demand is constant throughout the
year.
C. Forecasting and other supply chain activities A recent report produced by Shop n Pay’s chief demand planner has revealed that the retailer’s reliance on simple exponential smoothing to forecast demand for its products is partly responsible for the significant bullwhip effect in the supply chain and the stock outs in the past few years. In this regard, the chief demand planner is recommending that exponential smoothing with trend adjustment (Holt’s Model) should be used to forecast demand for aggregate planning for the 2020 fiscal year.
Mr Msimanga has retrieved from the retailer’s database the following information on number of goods sold over a two–year period. Year Monthly sales (‘000 units)
Jan 2018 -650 /2019 -750
Feb 2018-700 /2019 -800
Mar 2018 -820/2019-900
Apr 2018 -850/2019-920
May 2018-700/2019- 680
Jun 2018-840/2019-950
Jul 2018-930/2019-1080
Aug 2018-630/2019-742
Sep 2018-860/2019-920
Oct 2018-600 /2019 -705
Nov 2018-1050/2019 -1100
Dec 2018 - 750 /2019- 820
2.3 REQUIRED: Use the information provided above under section C:
Forecasting and other supply chain activities to answer the following questions:
2.3.1 “A recent report produced by Shop n Pay’s chief demand planner has revealed that the retailer’s reliance on simple exponential smoothing to forecast demand for its products is partly responsible of the significant pile-up of goods in the company’s main distribution centre.”
2.3.2
Calculate the Exponential smoothing with trend component forecast
(FIT) for second to the twenty-fifth month using an initial trend
forecast (?1) of 10 000, an initial exponential smoothing forecast
(?1) of 640 000 units, ?=0.20, and ?=0.30.
2.3.3
Plot the actual demand, the simple exponential smoothing (SES)
forecast, and trend-adjusted exponential smoothing (FIT) forecast
on the same graph. Briefly comment on the observed difference(s)
between the plots of the two forecasts.
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