Questions
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the...

Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost.

Last year, the company sold 32,000 of these balls, with the following results:

Sales (32,000 balls) $ 800,000
Variable expenses 480,000
Contribution margin 320,000
Fixed expenses 211,000
Net operating income $ 109,000

5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls?

6. Refer to the data in (5) above.

a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $109,000, as last year?

b. Assume the new plant is built and that next year the company manufactures and sells 32,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage.

In: Accounting

******PLEASE COMPLETE ALL PARTS***** The EPA is considering an application from the state of Colorado for...

******PLEASE COMPLETE ALL PARTS*****

  1. The EPA is considering an application from the state of Colorado for a large dam project on the Colorado River. The basic costs and benefits of the project (in inflation-adjusted dollar values) are as follows:

Costs

$900 million/year first three years

Construction costs:

Operating costs:

$80 million/year

Agricultural product lost from flooded lands:

$65 million/year

Forest products lost from flooded lands:

$40 million/year

Benefits

Revenues from Power Generation

Hydropower generated:

4 billion Kilowatt hours/year

Price of electricity:

$0.125/Kilowatt hour

Revenues from Irrigation Services

Irrigation water available from the dam:

200K Acre-Feet

Price of water:

$700/Acre-Foot

  1. Do a formal Cost-Benefit Analysis (CBA) using the quantifiable factors listed above. Assume that the operating lifespan of the dam is 30 years. Assume construction begins in year 1. All other impacts start when the dam is completed (at the beginning of Year 4) and continue for 30 years, which implies the full lifespan for the project is 33 years.
  2. Using the same parameters and results from part (a.), adjust the interest rate to determine the level of discounting necessary to just break even. (Hint: I would start by changing the interest rate in 1% increments and then refine the changes as you get close to the break-even point.) What does this increase or decrease in interest rate imply about the relationship between costs and benefits over time?
  3. (Return to the setup from part (a.) with a 7% discount rate.) In addition to the components of the project listed above, what other costs and/or benefits do you think are missing that should be included? How do you think they will impact the overall conclusion regarding the profitability of the project? (Hint: I would suggest thinking about this in terms of existence values – i.e., based on our discussion in class surrounding the development of ANWR what values may need to be built into this analysis and how would you go about getting them. There isn’t one right answer – you just need to defend your reasoning for what you come up with. I would suggest starting by thinking about how many households there are in the US and how much each would pay per year to protect the ecosystems associated with the dam.)
  4. Finally, holding constant the analysis you did in part (c.) what happens when you increase the acre-foot price of irrigation water from $700 to $1500 and/or the price per kilowatt hour of electricity from $0.125 to $0.15?

In: Finance

Distinguish between the remote and near environments. How do each support the strategic planning process? Distinguish...

Distinguish between the remote and near environments. How do each support the strategic planning process?

Distinguish between the remote and near environments. How do each support the strategic planning process?

In: Economics

Lincoln Park Zoo in Chicago is considering a renovation that will improve some physical facilities at...

Lincoln Park Zoo in Chicago is considering a renovation that will improve some physical facilities at a cost of $1,800,000. Addition of new species will cost another $310,000. Additional maintenance, food, and animal care and replacement will cost $145,000 in the 1st year, increasing by 3 % each year thereafter. The zoo has been in operation since 1868 and is expected to continue indefinitely; however, it is common to use a 20-year planning horizon on all new investments. Salvage value on facilities after 20 years will be 40 % of initial cost. Interest is 7 %. An estimated 1.5 million visits per year are made to the zoo, and the cost remains free year-round. How much additional benefit per visit, on average, must the visitors perceive to justify the renovation? ..............$

Carry all interim calculations to 5 decimal places and then round your final answer to 2 decimal places. The tolerance is ±0.01.

In: Economics

In accounting, what are the main similarities and differences between a 200 rooms of 3 stars...

In accounting, what are the main similarities and differences between a 200 rooms of 3 stars hotel and a 200 slots of 3 stars camping sites?

In: Accounting

writing pretend you are working in a hotel busness place describe how would you apply use...

writing pretend you are working in a hotel busness place describe how would you apply use ethic to be successfull as an employee in that workplace

In: Operations Management

Identify (3) three revenue management “factors” that will have an impact on a hotel with respect...

Identify (3) three revenue management “factors” that will have an impact on a hotel with respect to optimizing revenue generation. Explain and elaborate each concept.

In: Operations Management

Can a hotel or restaurant increase or maintain customer satisfaction after implementing its

Can a hotel or restaurant increase or maintain customer satisfaction after implementing its first revenue management program? Explain your answer.

In: Accounting

There are 3 short answer questions in this paper. Type your answers where indicated. Your answers...

There are 3 short answer questions in this paper. Type your answers where indicated. Your answers can be in bullet point form.

A local resort in the Blue Mountains is for sale.

  1. What are the potential valuation effects of COVID-19 and of the bad bushfire season the year before? Identify how these events would be taken into consideration in a valuation model. Be sure to identify positive or negative valuation effects and whether these effects are short term or long term.

Type answer here

The government has identified an area of the national park near the resort that they are going to release for sale for development to raise money. The sale of the land is being done by sealed bid auction with the government committee deciding which offer to accept based on several criteria including the amount offered as well as the plans for development. You find out that someone on the committee is trying to solicit a kickback of 15% to award the contract.

  1. You tell your boss and she tells you that this is how the industry works. What should you do? Can you identify any examples of this type of corruption has occurred in Australia or by Australian companies?

Type answer here

The resort monitors all the sales and COGS in each of the departments and they noticed that COGS have been increasing in the restaurant without any change in the revenues.

What are some of the possible explanations for the increasing COGS? How would you investigate fraud-related potential explanations?

In: Accounting

An S corporation converted from a C corporation in 20X2 has the following: Built-in gains of...

An S corporation converted from a C corporation in 20X2 has the following: Built-in gains of $20,000 Taxable income, computed as if the corporation were a C corporation of $30,000 What is the built-in gains tax?

A. $3,000

B. $4,500

C. $7,000

D. $10,500

In: Accounting