Northern Pine Company had the following account balances on December 31, 2017: Accounts Balances Cash $3,000 Accounts Receivable $3,500 Prepaid Insurance $2,800 Equipment $16,000 Accumulated Depreciation $7,000 Accounts Payable $1,500 Deferred Revenue $800 Notes Payable $1,200 Common Stock $3,200 Retained Earnings $8,600 Dividends $1,700 Service Revenue $18,200 Salaries Expense $9,250 Rent Expense $4,250 How much is Northern Pine Company's net income for the year ended December 31, 2017
In: Accounting
Northern Pine Company had the following account balances on December 31, 2017: Accounts Balances Cash $3,000 Accounts Receivable $3,500 Prepaid Insurance $2,800 Equipment $16,000 Accumulated Depreciation $7,000 Accounts Payable $1,500 Deferred Revenue $800 Notes Payable $1,200 Common Stock $3,200 Retained Earnings $8,600 Dividends $1,700 Service Revenue $18,200 Salaries Expense $9,250 Rent Expense $4,250 How much is Northern Pine Company's net income for the year ended December 31, 2017
In: Accounting
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.
In: Accounting
1. For each of them, identify whether the account is closed or not at the end of fiscal period.
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.
In: Accounting
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?
In: Finance
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Scenario abstracted from the case of the Problems at Perrier: Nestle took over Perrier in 1992 seeing Perrier as an attractive target. However, it did not enjoy much success the company is hoping for. Nestle has been struggling in turning Perrier around. As stated, the Perrier recorded a very low pre-tax profit margin in 2003 and recorded a loss in 2004.
its Union, CGT. To move forward with its plan, Nestle needs the support of CGT. |
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Answer the following question: 1. Identify TWO (2) strongest reasons that explain why the Union is not motivated to change. 2. Based on the reasons identified in question 1, propose with justification TWO (2) most suitable interventions Nestle should take to gain the Union's support. 3. Explain with example TWO (2) evaluation Nestle should conduct to measure the effectiveness of your stated intervention. (the CGT, a union that is viewed by the management as consistently resisting Nestlé’s attempts to improve Perrier’s financial performance.)(Jean-Paul Franc, head of the CGT at Perrier, sees the situation differently. In regard to the company’s plan to cut 15 percent of its workforce he protests, “Nestle can’t do whatever it likes.” He says, “There are men and women who work here… Morally speaking the water and the gas stored below this ground belong to the whole region.”) |
In: Operations Management
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.
In: Finance
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:
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Fixed Cost per Month |
Cost per Car Washed |
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| Cleaning supplies | $ | 0.60 | |||
| Electricity | $ | 1,300 | $ | 0.09 | |
| Maintenance | $ | 0.25 | |||
| Wages and salaries | $ | 5,000 | $ | 0.20 | |
| Depreciation | $ | 8,200 | |||
| Rent | $ | 1,900 | |||
| Administrative expenses | $ | 1,700 | $ | 0.04 | |
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.
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Lavage Rapide Income Statement For the Month Ended August 31 |
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| Actual cars washed | 8,500 | |
| Revenue | $ | 53,340 |
| Expenses: | ||
| Cleaning supplies | 5,540 | |
| Electricity | 2,026 | |
| Maintenance | 2,340 | |
| Wages and salaries | 7,040 | |
| Depreciation | 8,200 | |
| Rent | 2,100 | |
| Administrative expenses | 1,936 | |
| Total expense | 29,182 | |
| Net operating income | $ | 24,158 |
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.)
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In: Accounting
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PART 3) The following data is provided for Garcon Company and Pepper Company
3A) Prepare income statements for both Garcon Company and Pepper Company.
3B) Prepare the current assets section of the balance sheet for each company.
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Pepper Company Partial Balance Sheet For Year December 31, 2017 |
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Total Current Assets |
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In: Accounting
Four questions:
In: Accounting