Use the companies' financial information to answer the following questions.

a.   What were Coca-Cola's and PepsiCo's net revenues (sales) for the year 2017? Which company increased its revenue more (dollars and percentage) from 2016 to 2017?

b.   Are the revenue recognition policies of Coca-Cola and PepsiCo similar? Explain.

c.   In which foreign countries (geographic areas) did Coca-Cola and PepsiCo experience significant revenues in 2017? Compare the amounts of foreign revenues to U.S. revenues for both Coca-Cola and PepsiCo.

1. For each of them, identify whether the account is closed or not at the end of fiscal period.

• Allowance for Accounts Receivable

• Sales Revenue

• Unearned Revenue

• Bond Payable Discount

2. At January 1, 2019, Fuller Company had total assets of $900,000 and at December 31, 2019, its total assets were $1,100,000. Fuller’s net sales for 2019 were $850,000 and its 2019 net income was $55,000.

• Return on assets for 2019

• Profit margin (or Return on sales ratio) for 2019

• Asset turnover for 2019

A Malaysian firm has to choose between two new machines.

Machine A would cost $80,000 and is expected to have an economic life of four years. It should generate $50,000 of revenue each year, and incur costs of $22,000 a year.

Machine B will cost $100,000 and is expected to have an economic life of five years. It is anticipated that it will produce annual revenue of $51,000 and attract costs of

$22,000 a year.

If the firm requires a return of 10% on their investment and the company tax rate is 30%, which machine should be chosen?

Question:

(a) Calculate the free cash flow generated by a firm which has earnings before interest and taxes of £30m, has depreciated its fixed assets by £1m, has invested £10m in new fixed assets and £5m in working capital during 2019 when it paid corporate tax at 20%. Explain what you have assumed about the firm’s asset base.

(b) During 2019 the firm in (a) generated revenue of £60m, its cost of goods sold was £20m and its selling, general and administrative costs were £10m. You anticipate that over the next five years revenue will grow at 5% each year, the cost of goods sold will continue to be a fixed percentage of revenue, but due to managerial efficiencies administrative costs will not change. All forms of investment, together with depreciation will have a consistent relationship with revenue. At the end of this five-year period you believe that free cash flow will grow at 2% each year. What is the company worth at the end of 2019, assuming that its weighted average cost of capital is 5%?

(c) How would the company’s weighted average cost of capital and hence value change if it were to issue additional debt in order to repurchase equity?

(d) Explain how you could value this company using multiples, and what assumptions you would have to make.

avage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs:

For example, electricity costs are $1,300 per month plus $0.09 per car washed. The company expected to wash 8,400 cars in August and to collect an average of $6.10 per car washed.

The actual operating results for August appear below.

Required:

Compute the company's revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

1. Company PVFV sells shoes at an average price of $100. The cost to produce each pair of shoes is $40. The company has annual fixed costs of $40,000.

Four questions:

1. What is the breakeven in terms of unit sales? Show calculations using 2 different methods.
2. Include a written description of how the two methods approach the problem.
3. What is the breakeven in terms of sales revenue?

Jim Carrie Company shows a balance of $181,140 in the Accounts Receivable account on December 31, 2013. The balance consists of the following

. Installment accounts due in 2014 $23,000

Installment accounts due after 2014 34,000

Overpayments to vendors 2,640

Due from regular customers, of which $40,000 represents accounts pledged as security for a bank loan 79,000

Advances to employees 1,500

Advance to subsidiary company (due in 2015) 81,000

Illustrate how the information above should be shown in balance sheet.

The marketing manager at the Magazine Company suggests a new customer acquisition strategy with customer acquisition cost of $15. The strategy basically is to offer $15 discount to the new customers. This discount is only for the first year, and the fee is going to jump to the regular fee for the following years. Assume that this strategy does not have any effect on retention rate and contribution margin for each customer. Is this strategy worth pursuing? In other words, does this strategy generate more value for the company?

yes or no? briefly explain.