Anderson Metals manufactures and sells #3 steel rebar that is used in the construction of slabs and driveways. The steel bar not only strengthens the finished concrete product, but it also has unique properties such that its temperature related expansion and contraction matches that of concrete. The product is manufactured and sold in 20' long "sticks." The product is generally produced and sold to match customer demand, and there is not a significant amount of finished goods inventory at any point in time. Summary information for 20X6 is as follows: Sales were $20,000,000, consisting of 5,000,000 sticks. Total variable costs were $11,000,000. Total fixed costs were $8,000,000. Net income was $1,000,000. The general economic conditions appear to be deteriorating heading into 20X7, and there is some concern about a reduction in sales volume. The following questions should each be answered independent of one another. 1. (a) What is the company's break-even point in "sticks?" Can the company sustain a 30% reduction in total volume, and remain profitable? 2. (b) The company's sole shareholder, Doug Anderson, generally lives off of dividends paid by the business. The business typically declares and pays a dividend equal to 25% of net income. If Doug needs to receive $100,000 in dividends for normal living expenses, what total revenues must Anderson Metals produce in 20X7? 3. (c) If total volume is expected to decrease by 20%, and the company wishes to continue to produce a $1,000,000 net income by raising the per unit selling price, what revised per stick price must be imposed? Will this strategy necessarily work? 4. (d) If the company expects a drop in raw material prices to reduce total variable costs to $2 per stick, but all other revenue and cost factors to be unaffected, what will be the revised break-even point in sales and units?

You are the Chief Finance officer for Mazembe Limited, A company engaged in construction of apartments for third parties. Mazembe has 200 employees in total and the following transactions have arisen that require you advise on how they should be reported.

1. Mazembe operates a pension plan for employees where the company does not guarantee return on the contributions paid into the fund. Instead, the company’s obligation (legal or constructive) is limited to the amount contributed to the fund. On 31 December 2019, the company had fair value of plan assets amounting to K35 million, contributions paid by Mazembe into the fund amounting to K16 million and contributions paid by employees into the fund of K16 million. The interest rates on high quality bonds for Mazembe’s pension plan are: 7% on 1 January 2019 and 10% on 31 December 2019.                                                           

2. Mazembe has two receivables at 31 December 2019 that it has factored to a bank in return for immediate cash proceeds. Both receivables are due from long standing customers who are expected to pay in full and on time. Mazembe had agreed a three-month credit period with both customers.

The first receivable is for K400 million. In return for assigning the receivable, Mazembe has received K360 million from the factor. Under the terms of the factoring arrangement, Mazembe will not have to repay this money, even if the customer does not settle the debt.

The second receivable is for K200 million. In return for assigning the receivable, Mazembe has received K140 million from the factor. The terms of this factoring arrangement state that Mazembe will receive a further K10 million if the customer settles the account on time. If the customer does not settle the account in accordance with the agreed terms then the receivable will be reassigned back to Mazembe who will then be obliged to refund the factor with the original K140 million.                                         

3. In its quest to raise funds for the construction of the apartments, Mazembe issued 1 million convertible bond for K200 million on 1 January 2019. The bonds are redeemable for cash or convertible into equity shares on 31 December 2021. Interest is paid annually in arrears at a rate of 6% per annum and bonds without conversion options attract an interest rate of 9% per annum on 1 January 2019. Mazembe incurred issue costs of K2 million. At maturity, all of the bonds were converted into 25 million ordinary shares of K1 each of Mazembe. No bonds could be converted before that date. The impact of the issue costs is to increase the interest rates to 9.38%. If the investor did not convert bond to shares, they could have been redeemed at par.                                             

4. As a way of growing its funds raised from construction of apartments, Mazembe acquired an investment in a debt instrument on 1 January 2019 at its par value of K9 million. Transaction costs relating to the acquisition were K500,000. The investment earns a fixed annual return of 6% which is received in arrears. The principal amount will be paid to Mazembe in four years’ time at a large premium. Mazembe’s business model is to hold the investment until redemption date. The investment has an effective interest rate of approximately 7.05%.

On 31 December 2019, Mazembe received its fixed interest. However, it estimated that the probability of default on the bond within the next 12 months would be 0.8%. if default occurs within the next 12 months, Mazembe estimates that no further interest would be received and that only 30% of capital will be repaid on 31 December 2022.                                                                   

Required:

Discuss in detail, with relevant computations, the required accounting treatment of each of the above transactions for the year ended 31 December 2019. Summarize your discussion on each item in financial statement extracts.

                                                                                                      Total    

Hafners Construction is analyzing its capital expenditure proposals for the purchase of equipment in the coming year. The capital budget is limited to $15,000,000 for the year. Lauren Bobo​,staff analyst at Hafners​, is preparing an analysis of the three projects under consideration by Caden Hafners​, the​ company's owner.

Project A

Project B

Project C

Projected cash outflow

Net initial investment

$6,600,000

$8,500,000

$9,000,000

Projected cash inflows

Year 1

$3,600,000

$5,500,000

$4,900,000

Year 2

3,600,000

2,000,000

4,900,000

Year 3

3,600,000

1,100,000

200,000

Year 4

3,600,000

100,000

Required rate of return

6%

6%

6%

B05 - Construction Surveying - Assignment 8

Explain the process for establishing the line and grade for a sanitary sewer line connection to an existing municipal sanitary manhole. Include the type of sewer flow, the importance of the pipe invert and reach of the sewer in determining the slope of the pipe, factors that determine the use of manholes, the use of batter boards and offset stakes, minimum ground cover required. In addition, discuss the use of visual aid such as field notes and a simple plan and profile drawing in establishing the line and grade.

the previous answer in wrong / incomplete

1. Contracts for two construction jobs are randomly assigned to one or more of three firms A, B, and C. Let Y1 denote the number of contracts assigned to firm A and Y2 the number of contracts assigned to firm B. Recall that each firm can receive 0, 1 or 2 contracts.

2. (b) Find the marginal probability of Y1 and Y2.

3. (c) Are Y1 and Y2 independent? Why? (d) Find E(Y1 − Y2).

4. (e) Find Cov(Y1, Y2)

Suppose that Caterpillar Incorporated is considering a new line of construction graders. To launch the new product, Caterpillar will have to invest $200.00 million. The target capital structure for Caterpillar is 45.00% debt and 55.00% equity (market values).

The CFO for the company believes that new debt can be issued with an 8.00% annual coupon rate. After reviewing the company’s beta, the CFO also believes that common stockholders require a 15.00% return for the new investment.

The company projects an annual after-tax cash flow of $65.00 million for the new project. The company has a marginal tax rate of 35.00%, and expects to run the project for 10.00 years.

What is the NPV for the project?(express in millions)

Case Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2017, the general ledger for Case Inc. contains the following data.

Subsidiary data for Work in Process Inventory on June 1 are as follows.

During June, raw materials purchased on account were $ 5,047, and all wages were paid. Additional overhead costs consisted of depreciation on equipment $ 927 and miscellaneous costs of $ 412 incurred on account.

A summary of materials requisition slips and time tickets for June shows the following.

Overhead was charged to jobs at the same rate of $ 1.25 per dollar of direct labor cost. The patios for customers Rodgers, Stevens, and Linton were completed during June and sold for a total of $ 19,467. Each customer paid in full.

Journalize the June transactions: (1) for purchase of raw materials, factory labor costs incurred, and manufacturing overhead costs incurred; (2) assignment of direct materials, labor, and overhead to production; and (3) completion of jobs and sale of goods. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 2,500.)

The mean time required to complete a certain type of construction project is 52 weeks with a standard deviation of 3 weeks. Answer questions 4–7 using the preceding information and modeling this situation as a normal distribution.

1. What is the probability of the completing the project in no more than 52 weeks?

1. 0.25
2. 0.50
3. 0.75
4. 0.05

2. What is the probability of the completing the project in more than 55 weeks?

1. 0.1587
2. 0.5091
3. 0.7511
4. 0.0546

3. What is the probability of completing the project between 56 weeks and 64 weeks?

1. 0.2587
2. 0.3334
3. 0.5876
4. 0.0911

4. What is the probability of completing the project within plus or minus one standard deviation of the mean?

1. 0.951
2. 0.852
3. 0.759
4. 0.683