Shan Co. is considering a four-year project that will require an initial investment of $15,000. The base-case cash flows for this project are projected to be $12,000 per year. The best-case cash flows are projected to be $19,000 per year, and the worst-case cash flows are projected to be –$3,000 per year. The company’s analysts have estimated that there is a 50% probability that the project will generate the base-case cash flows. The analysts also think that there is a 25% probability of the project generating the best-case cash flows and a 25% probability of the project generating the worst-case cash flows.

What would be the expected net present value (NPV) of this project if the project’s cost of capital is 11%?

$16,825

$18,428

$16,024

$12,819

Shan now wants to take into account its ability to abandon the project at the end of year 2 if the project ends up generating the worst-case scenario cash flows. If it decides to abandon the project at the end of year 2, the company will receive a one-time net cash inflow of $3,000 (at the end of year 2). The $3,000 the company receives at the end of year 2 is the difference between the cash the company receives from selling off the project’s assets and the company’s –$3,000 cash outflow from operations. Additionally, if it abandons the project, the company will have no cash flows in years 3 and 4 of the project.

Using the information in the preceding problem, find the expected NPV of this project when taking the abandonment option into account.

$22,855

$21,027

$18,284

$16,456

What is the value of the option to abandon the project?     

1808

2034

1695

2486

2260

Marketing is requesting a 1,000,000 pcs/year volume and the life expectancy for this part is 5 years. Estimated part weight is 1.750 kg.

1. What will be the weekly required production rate to meet the yearly volume?
2. How many cavities are recommended for the production yearly volume required?
3. Based on your previous answer, how many normal hours and overtime hours will be required to meet the weekly production schedule.
4. Determine the piece price the first year considering the initial investment amortized on the first year of production and a 25 % gross profit.

Useful data:

Mr. “O” reported :$100,000 USD development cost.

Mr. “CASIO” reported:              MOLD: $350,000 USD for 1 Cav.

&    $550,000 for 2 cav. mold

                                       Checking fixture: $60,000 USD

                                       Secondary Equipment :$25,000 USD

Mr. “NICASIO” reported:

             Cycle time : 50 seconds

             Machine utilization cost : 3000 USD/hour

             Material Cost: $4.50 USD/LB.

             Labor Cost Normal time: 20 USD/hour

             Labor Cost overtime : 40 USD/hour

             SG&A cost : 20 USD/hour

WORK HOURS: NORMAL TIME: 3 SHIFTS OF 8 HOURS

WEEKENDS ARE OVERTIME

52 WEEKS PER YEAR.

(All of the info give so assume for the current tax year ? )

Trey claims a dependency exemption for both of his daughters, ages 14 and 17, at year-end. Trey files a joint return with his wife.

What amount of child credit will Trey be able to claim for his daughters under each of the following alternative situations?

a. His AGI is $102,700.

b. His AGI is $123,700.

c. His AGI is $131,800, and his daughters are ages 10 and 12.

.

Taxable amount of eligible dividends: $8,280

Capital gains: $4,000

Other investment income: $2,000

On January 1 of this year, Victor Corporation sold bonds with a face value of $1,560,000 and a coupon rate of 10 percent. The bonds mature in four years and pay interest semiannually every June 30 and December 31. Victor uses the straight-line amortization method and also uses a premium account. Assume an annual market rate of interest of 8 percent.

1. Prepare the journal entry to record the issuance of the bonds.

2. Prepare the journal entry to record the interest payment on June 30 of this year.

3. What bonds payable amount will Victor report on its June 30 balance sheet?

Minden Company introduced a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each $2 reduction in the selling price. The company’s present selling price is $93 per unit, and variable expenses are $63 per unit. Fixed expenses are $838,500 per year. The present annual sales volume (at the $93 selling price) is 25,800 units.

Required:

1. What is the present yearly net operating income or loss?

2. What is the present break-even point in unit sales and in dollar sales? (Do not round intermediate calculations.)

  3. Assuming that the marketing studies are correct, what is the maximum annual profit that the company can earn? At how many units and at what selling price per unit would the company generate this profit?

4. What would be the break-even point in unit sales and in dollar sales using the selling price you determined in (3) above (e.g., the selling price at the level of maximum profits)? (Do not round intermediate calculations.)

At the end of the year, Randy’s Parts Co. had the following items in inventory:

Required
a. Determine the amount of ending inventory using the lower-of-cost-or-market rule applied to each individual inventory item.
  

b. Provide the general journal entry necessary to write down the inventory based on Requirement a. Assume that Randy’s Parts Co. uses the perpetual inventory system. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
  

c. Determine the amount of ending inventory, assuming that the lower-of-cost-or-market rule is applied to the total inventory in aggregate.
  

1. At the beginning of the year, the Baker Fund, a non-governmental not-for-profit corporation, received a $125,000 contribution restricted to youth activity programs. During the year, youth activities generated revenues of

$89,000 and had program expenses of $95,000. What amount should Baker report as net assets released from restrictions for the current year?

program expense is 95000, how come it becomes net asset release? please explain  

2. Functional expenses recorded in the general ledger of ABC, a non-governmental not-for-profit organization, are as follows:

What amount should ABC report as fund-raising expenses?  

please explain what is fund rasing expense, and what is other.

3. Child Care Centers, Inc., a not-for-profit organization, receives revenue from various sources during the year to support its day care centers. The following cash amounts were received during Year 1.

• $2,000 restricted by the donor to be used for meals for the children.

• $1,500 received for subscriptions to a monthly child care magazine with a fair market value to subscribers of

$1,000.

• $10,000 to be used only upon completion of a new playroom that was 75% complete at December 31, Year 1.

What amount should Child Care Centers record as contribution revenue in its Year 1 Statement of Activities?  

please explain how to determine the contribution revenue and why. thanks !

The government of Markville started charging an excise tax on gasoline. After one year, it was found that gasoline demand was not different from that before the imposition. The governor of Markville argues that the excise tax has no burden because it showed no change in demand. She also argues that a gas tax can be a relatively efficient way to raise tax revenue. Evaluate her arguments. Note: Let X-axis denote gasoline, and Y-axis denote other goods.

1. Analyze the argument at an individual level. Draw an indifference curve and income line. Show how the demand was different before the imposition.

   a) Analyze the argument at a market level. Draw a supply and demand curve of gasoline. Feel free to attach your illustration. Show how the demand was not changed by the imposition.

b) What is the magnitude of the deadweight loss? What problems can we expect when the government increases the proportion of excise tax?

I JUST WANT TO IDENTIFY THE PROBLEMS IN THE ABOVE DATA. THANKS