Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total cash receipts $300,000 $420,000 $350,000 $370,000 Total cash disbursements $358,000 $328,000 $318,000 $338,000 The company’s beginning cash balance for the upcoming fiscal year will be $35,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded. Required: Complete the company's cash budget for the upcoming fiscal year. (Cash deficiency, repayments, and interest, should be indicated by a minus sign.)
In: Accounting
Kamini, a student of the 1-Year post graduate program at the International School of Business and Design is trying to establish the relationship between compensation (in Rs. Lakh) and years of work experience. She collected data from 9 students who have been placed and fitted a regression equation with Compensation (in Rs. Lakh) as the dependent variable and Years of experience as the independent variable. The Excel output is given below (with some missing values):
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SUMMARY OUTPUT |
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Regression Statistics |
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Multiple R |
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R Square |
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Adjusted R Square |
0.67224 |
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Standard Error |
1.262251 |
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Observations |
9 |
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ANOVA |
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df |
SS |
MS |
F |
Significance F |
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|
Regression |
1 |
17.40811 |
0.004177 |
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Residual |
7 |
11.15294 |
1.593277 |
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Total |
8 |
38.88889 |
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Coefficients |
Standard Error |
t Stat |
P-value |
Lower 95% |
Upper 95% |
|
|
Intercept |
11.91765 |
1.542901 |
0.000114 |
8.269266 |
15.56603 |
|
|
years of experience |
0.290431 |
0.004177 |
0.525005 |
1.898524 |
||
Answer the following questions based on the above.
1. What is the value of Regression Sum of Squares?
2. What is the 95% confidence interval for the slope?
3. What is the estimated compensation for a person with 8 years of experience?
4. What is the coefficient of correlation between Compensation and Years of experience?
5. What is the R2 for the above regression equation?
6. What is the t-value corresponding to the intercept?
7. Interpret the value 0.004177 under the column “P-Value”
8. What is the expected compensation for a person with no work experience?
9. The above output provides 95% confidence interval for the intercept. What is the lower limit for the 90% confidence interval for the intercept?
10. The above output provides 95% confidence interval for the intercept. What is the upper limit for the 90% confidence interval for the intercept?
In: Math
This year Amy purchased $2,650 of equipment for use in her
business. However, the machine was damaged in a traffic accident
while Amy was transporting the equipment to her business. Note that
because Amy did not place the equipment into service during the
year, she does not claim any depreciation expense for the
equipment.
a. After the accident, Amy had the choice of repairing the equipment for $1,960 or selling the equipment to a junk shop for $330. Amy sold the equipment. What amount can Amy deduct for the loss of the equipment?
b. After the accident, Amy repaired the equipment for $1,520. What amount can Amy deduct for the loss of the equipment?
c. After the accident, Amy could not replace the equipment so she had the equipment repaired for $3,350. What amount can Amy deduct for the loss of the equipment?
In: Accounting
Randy currently has an obligation that he will pay $1 million a year for the next 3 years, what is the duration of his obligation if the appropriate discount rate is 5%?
If Randy wants to immunize his obligation using a 1-year zero coupon bond and a perpetuity both yielding 6%. I rounded the durations to two decimal places to minimize rounding errors.
What is the weight he should invest in the zero?
What is the weight he should invest in the perpetuity?
In: Finance
What amount ($ in millions) of cash was used in the fiscal year ended February 3, 2018, to purchase property and equipment? Is this an increase or decrease compared to the previous year?
https://corporate.target.com/_media/TargetCorp/annualreports/2017/pdfs/2017-Annual-Report.pdf?ext=.pdf
In: Accounting
A high school physics teacher wondered if his students in the senior class this year will be more likely to go into STEM (Science, Technology, Engineering, Mathematics) majors than Social Science and Liberal Arts majors. He asked each of his 65 students about their first choice for major on their college applications and conducted a Chi-square test for goodness of fit with an alpha level of .05 to see if the number of students choosing each category differs significantly.
35 – STEM
20 – Social Sciences
10 – Liberal Arts
a. What is the variable in this test? What type of variable is it (nominal, ordinal, or continuous)? (1 point total: .5 for each question)
b. State the null and alternative hypotheses in words (1 point total: .5 for each hypothesis)
c. Calculate X2 statistic (2 points total: 1 for final answer, 1 for the process of calculating it)
d. Calculate the degree of freedom and then identify the critical value (1 point total: .5 for df, .5 for critical value)
e. Compare the X2 statistic with the critical value, then report the hypothesis test result, using “reject” or “fail to reject” the null hypothesis in the answer (1 point total, .5 for each answer)
f. Explain the conclusion in a sentence or two, to answer the research question. (1 point)
In: Math
Jesper Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to JesperJesper Manufacturing's operations:
Data Table
|
Current Assets as of December 31 (prior year): |
|
|
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . |
$4,640 |
|
Accounts receivable, net. . . . . . . . . . . . . . . |
$51,000 |
|
Inventory. . . . . . . . . . . . . . . . . . . . . . . . |
$15,400 |
|
Property, plant, and equipment, net. . . . . . . . . . . . |
$120,500 |
|
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . |
$42,800 |
|
Capital stock. . . . . . . . . . . . . . . . . . . . . . . . . . |
$123,500 |
|
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . |
$23,100 |
Information
a. Actual sales in December were $72,000. Selling price per
unit is projected to remain stable at $12 per unit throughout the
budget period. Sales for the first five months of the upcoming year
are budgeted to be as follows:
|
||||||||||
|
b. |
Sales are 20% cash and 80% credit. All credit sales are collected in the month following the sale. | |||||||||
|
c. |
Jesper Manufacturing has a policy that states that each month's ending inventory of finished goods should be 10% of the following month's sales (in units). |
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|
d. |
Of each month's direct material purchases, 20% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Three kilograms of direct material is needed per unit at $2.00/kg. Ending inventory of direct materials should be 30% of next month's production needs. |
|
e. |
Monthly manufacturing conversion costs are $4,500 for factory rent, $2,800 for other fixed manufacturing expenses, and $1.10 per unit for variable manufacturing overhead. No depreciation is included in these figures. All expenses are paid in the month in which they are incurred. |
|
f. |
Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Jesper Manufacturing will purchase equipment for $6,000 (cash), while February's cash expenditure will be $12,800 and March's cash expenditure will be $15,600. |
|
g. |
Operating expenses are budgeted to be $1.30 per unit sold plus fixed operating expenses of $1,800 per month. All operating expenses are paid in the month in which they are incurred. |
|
h. |
Depreciation on the building and equipment for the general and administrative offices is budgeted to be $5,600 for the entire quarter, which includes depreciation on new acquisitions. |
|
i. |
Jesper Manufacturing has a policy that the ending cash balance in each month must be at least $4,200. it has a line of credit with a local bank. The company can borrow in increments of $1,000 at the beginning of each month, up to a total outstanding loan balance of $140,000. The interest rate on these loans is22% per month simple interest (not compounded). Jesper Manufacturing pays down on the line of credit balance if it has excess funds at the end of the quarter. The company also pays the accumulated interest at the end of the quarter on the funds borrowed during the quarter. |
|
j. |
The company's income tax rate is projected to be 30% of operating income less interest expense. The company pays $10,800 cash at the end of February in estimated taxes. |
Requirements
|
1. |
Prepare a schedule of cash collections for January, February, and March, and for the quarter in total. |
|
2. |
Prepare a production budget. (Hint: Unit sales = Sales in dollars / Selling price per unit.) |
|
3. |
Prepare a direct materials budget. |
|
4. |
Prepare a cash payments budget for the direct material purchases from Requirement 3. |
|
5. |
Prepare a cash payments budget for conversion costs. |
|
6. |
Prepare a cash payments budget for operating expenses. |
|
7. |
Prepare a combined cash budget. |
|
8. |
Calculate the budgeted manufacturing cost per unit. (Assume that fixed manufacturing overhead is budgeted to be $0.80 per unit for the year.) |
|
9. |
Prepare a budgeted income statement for the quarter ending March 31. (Hint: Cost of goods sold = Budgeted cost of manufacturing each unit x Number of units sold.) |
|
10. |
Prepare a partial budgeted balance sheet for March 31. Include Loans Payable and Income Tax Payable. |
In: Accounting
Herman Co. is considering a four-year project that will require an initial investment of $5,000. 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 $20,000 per year, and the worst-case cash flows are projected to be –$1,000 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 13%?
A. $25,627
B. $26,976
C. $31,022
D. $22,930
Herman 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 –$1,000 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.
A. $35,106
B. $30,894
C. $28,085
D. $26,681
What is the value of the option to abandon the project? ($1,109, $998, $721, $943, $832)
In: Finance
A survey of several 9 to 11 year olds recorded the following amounts spent on a trip to the mall: $22.91,$17.13,$13.60 Construct the 99% confidence interval for the average amount spent by 9 to 11 year olds on a trip to the mall. Assume the population is approximately normal. Step 3 of 4 : Find the critical value that should be used in constructing the confidence interval. Round your answer to three decimal places.
In: Math
Sunnyside Marine Products began the year with 10 units of marine floats at a cost of $11 each. During the year, it made the following purchases: May 5, 30 unit at $16; July 16, 15 units at $19; and December 7, 20 units at $23. Assuming there are 25 units on hand at the end of the period, determine the cost of goods sold under (a) FIFO, (b) LIFO, and (c) average-cost. Sunnyside uses the periodic approach.
In: Accounting