You invest $8,000 in an on-line bookstore in the form of a corporation on Jan. 2. For the sake of simplicity, you are the only shareholder who owns this corporation. You also decide to take on $10,000 liabilities with 20% annual interest rate. You spend $6,000 cash to buy books as the inventory. Throughout the year, you sell half of books to students in exchange for $9,000 cash, that is, your revenue is $9,000 and COGS is $3,000. Also, $2,000 cash dividend is paid at the end of the year. Tax rate is 40%.
All entries of balance sheet are zero at the beginning of the year (Jan. 1).
What is the cash level at the end of the year?
In: Finance
Kamala is interested in buying a property for $150,000. The costs are as follow: $50,000 in yr 1 and 2 for repairs $10,000 in yr 3 and beyond for repairs She will start making money: $25,000 per year when she opens in yr 4 which will then start increasing by $40,000 each yr. By assuming all cash flows (with the exception of first costs) are end of period cash flows & the interest rate is seven percent 1. what is the present value(worth) of Kamala revenue through year 10? Is it + or negative? Could this be considered a good investment,why or why not? Please show work detailed, will upvote!(: thank you
In: Finance
Sparkle is one firm of many in the market for toothpaste, which is in long-run equilibrium.
a. Draw a diagram showing Sparkle's demand curve, marginal-revenue curve, average-total-cost curve, and marginal-cost curve. Label Sparkle's profit-maximizing outputand price.
b. What is Sparkle's profit? Explain.
c. On your diagram, show the consumer surplus derived from the purchase of Sparkle toothpaste. Also show the deadweight loss relative to the efficient level ofoutput.
d. If the government forced Sparkle to produce the efficient level of output, what would happen to the firm? What would happen to Sparkle's customers?
In: Economics
You invest $8,000 in an on-line bookstore in the form of a corporation on Jan. 2. For the sake of simplicity, you are the only shareholder who owns this corporation. You also decide to take on $10,000 liabilities with 20% annual interest rate. You spend $6,000 cash to buy books as the inventory. Throughout the year, you sell half of books to students in exchange for $9,000 cash, that is, your revenue is $9,000 and COGS is $3,000. Also, $2,000 cash dividend is paid at the end of the year. Tax rate is 40%.
All entries of balance sheet are zero at the beginning of the year (Jan. 1).
What is the book value of inventory (books) at the end of the year?
In: Finance
You invest $8,000 in an on-line bookstore in the form of a corporation on Jan. 2. For the sake of simplicity, you are the only shareholder who owns this corporation. You also decide to take on $10,000 liabilities with 20% annual interest rate. You spend $6,000 cash to buy books as the inventory. Throughout the year, you sell half of books to students in exchange for $9,000 cash, that is, your revenue is $9,000 and COGS is $3,000. Also, $2,000 cash dividend is paid at the end of the year. Tax rate is 40%.
All entries of balance sheet are zero at the beginning of the year (Jan. 1).
What is retained earnings balance at the end of the year?
In: Finance
You invest $8,000 in an on-line bookstore in the form of a corporation on Jan. 2. For the sake of simplicity, you are the only shareholder who owns this corporation. You also decide to take on $10,000 liabilities with 20% annual interest rate. You spend $6,000 cash to buy books as the inventory. Throughout the year, you sell half of books to students in exchange for $9,000 cash, that is, your revenue is $9,000 and COGS is $3,000. Also, $2,000 cash dividend is paid at the end of the year. Tax rate is 40%.
All entries of balance sheet are zero at the beginning of the year (Jan. 1).
What is net income during the year?
In: Finance
|
Potential Gross Income 100,000 sq. ft for the coming year |
||
|
average rent $15.00 per ft. |
$ 1,500,000 |
|
|
Less Vacancy Allowance (average 8%) |
$ (120,000) |
|
|
Effective Gross Income |
$ 1,380,000 |
|
|
Cleaning expenses (5% of net rev) |
$ (69,000) |
|
|
Insurance ($ 0.02 per dollar replacement, R.C. = $40 per ft. |
$ (80,000) |
|
|
Management & Maintenance (11% of revenue) |
$ (151,800) |
|
|
Reserve for Replacement (savings for major repairs) |
$ (50,000) |
|
|
Property Taxes ($0.10 per $100 of R.C.) |
$ (4,000) |
|
|
$ (354,800) |
||
|
Estimated Net Operating Income |
$ 1,025,200 |
|
What is the NPV of this investment at a discount rate of 12% ? (use purcahse price of 9,500,00)
In: Finance
a.)What is the rate of return on the investment
b.)What is the net cash flows using an annual worth method
c.)What is the net cash flows using the present worth method
d.)What is the net cash flows using future worth Method
In: Finance
|
Potential Gross Income 100,000 sq. ft for the coming year |
||
|
average rent $15.00 per ft. |
$ 1,500,000 |
|
|
Less Vacancy Allowance (average 8%) |
$ (120,000) |
|
|
Effective Gross Income |
$ 1,380,000 |
|
|
Cleaning expenses (5% of net rev) |
$ (69,000) |
|
|
Insurance ($ 0.02 per dollar replacement, R.C. = $40 per ft. |
$ (80,000) |
|
|
Management & Maintenance (11% of revenue) |
$ (151,800) |
|
|
Reserve for Replacement (savings for major repairs) |
$ (50,000) |
|
|
Property Taxes ($0.10 per $100 of R.C.) |
$ (4,000) |
|
|
$ (354,800) |
||
|
Estimated Net Operating Income |
$ 1,025,200 |
|
What is the NPV of this investment at a discount rate of 12% ? (use purcahse price of $9,500,000)
In: Finance
A major element of this week's lesson is making sure that you understand how the so-called accrual adjustments "correct" a cash-basis income statement. For this discussion you need to select ONE (1) real-world example of a business circumstance that would reasonably be the basis for an accrual adjustment in an income statement.
Be sure to (a) briefly describe that circumstance, (b) describe what the appropriate adjustment to the cash basis income statement such that it would then represent an accrual basis revenue or expense, and (c) walk through the logic of HOW the adjustment usefully corrects what would have been reflected on a cash basis income statement.
In: Accounting