Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:

During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $83 per unit.

Assume the company uses absorption costing. Prepare an income statement for Year 1 and Year 2. (Round your intermediate calculations to 2 decimal places.)

PLEASE ANSWER IN EXCEL WITH WORK. An investor has projected three possible scenarios for a project as follows: Pessimistic- NOI will be $200,000 the first year, and then decrease 2 percent per year over a five year holding period. The property will sell for 1.8 million after five year. Most Likely- NOI will be level at $200,000 per year for the next five years(level NOI) and the property will sell for 2 million. Optimistic- NOI will be 200,000 the first year and increase 3 percent per year over a 5 year holding period. The property will then sell for 2.2 million The asking price for the property is 2 million. The investor thinks there is about a 30 percent probability for the pessimistic scenario, a 40 percent probability for the most likely scenario, and a 30 percent probability for the optimistic scenario. a. Compute the IRR for each scenario. b. Compute the expected IRR c. Compute the variance and standard deviation of the IRRs. d. Would this project be better than one with a 12 percent expected return and a standard deviation of 4 percent?

On January 1, Revis Consulting entered into a contract to complete a cost reduction program for Green Financial over a six-month period. Revis will receive $41,600 from Green at the end of each month. If total cost savings reach a specific target, Revis will receive an additional $20,800 from Green at the end of the contract, but if total cost savings fall short, Revis will refund $20,800 to Green. Revis estimates an 80% chance that cost savings will reach the target and calculates the contract price based on the expected value of future payments to be received.

Required:
Prepare the following journal entries for Revis:
1. to 3. Prepare the journal entry on January 31 to record the collection of cash and recognition of the first month’s revenue, assuming total cost savings exceed target, record the entry on June 30 for receipt of the bonus and assuming total cost savings fall short of target and record the entry on June 30 for payment of the penalty. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Problem 2: Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations: Variable costs per unit: Manufacturing: Direct materials $ 25 Direct labor $ 18 Variable manufacturing overhead $ 3 Variable selling and administrative $ 2 Fixed costs per year: Fixed manufacturing overhead $ 320,000 Fixed selling and administrative expenses $ 90,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $54 per unit.

Required: 1. Assume the company uses variable costing: a. Compute the unit product cost for Year 1 and Year

2. b. Prepare an income statement for Year 1 and Year 2.

2. Assume the company uses absorption costing:

a. Compute the unit product cost for Year 1 and Year 2.

b. Prepare an income statement for Year 1 and Year 2.  

1.

Which of the following bonds would have the highest percentage change in value if all interest rates in the economy decrease by 1%?

Group of answer choices

20-year, zero coupon bond.

20-year, 5% coupon bond.

10-year, zero coupon bond.

1-year, 10% coupon bond.

20-year, 10% coupon bond.

2.

Suppose you are signing a loan contract of $65,000 at an interest rate of 8.5%. You must make 5 equal payments at the end of the year for 5 years. How much would you still owe at the end of the first year, after you make the first payment?

Answer just the dollar amount without the + or - sign. Round to the nearest dollar.

3.

A public company's bonds have a $1,000 par value, mature in 25 years, pay interest semiannually, and sell at a price of $750. The nominal yield to maturity is 9.25%. What is the bond's nominal coupon interest rate?

Answer just the number without the % sign. Round to two decimal places.

Dinklage Corp. has 6 million shares of common stock outstanding. The current share price is $72, and the book value per share is $7. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a coupon of 7 percent, and sells for 97 percent of par. The second issue has a face value of $50 million, a coupon of 8 percent, and sells for 106 percent of par. The first issue matures in 22 years, the second in 6 years.

a. What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

Equity/Value?

Debt/Value ?

b. What are the company’s capital structure weights on a market value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

Equity/Value?

Debt/Value?

c. Which are more relevant, the book or market value weights? Market value or Book value?

Blue Eagle Media just bought a new ropes course. To pay for the ropes course, the company took out a loan that requires Blue Eagle Media to pay the bank a special payment of 6,700 dollars in 2 month(s) and also pay the bank regular payments.   The first regular payment is expected to be 1,440 dollars in 1 month and all subsequent regular payments are expected to increase by 0.2 percent per month forever. The interest rate on the loan is 1.36 percent per month. What was the price of the ropes course?

Raj has an investment worth 171,638 dollars. The investment will make a special payment of X to Raj in 3 quarters in addition to making regular quarterly payments to Raj forever. The first regular quarterly payment to Raj is expected to be 3,600 dollars and will be made in 3 months. All subsequent regular quarterly payments are expected to increase by 0.54 percent per quarter forever. The expected return for the investment is 2.83 percent per quarter. What is X, the amount of the special payment that will be made to Raj in 3 quarters?

Majestic Enterprises manufactures microchips for computers. A market survey shows that a 10% reduction in price will result in a 30% increase in sales with variable costs per unit remaining unchanged. On the other hand, an investment of $30,000 in machinery would reduce variable costs by $3 a unit. a) Determine the sales volume and break-even point for each option given Majestic currently sells 10,000 units @ $20 each, has variable costs of $80,000 and fixed costs of $40,000. Ensure you have checked all calculations for accuracy prior to submission. b) Using the current information provided in a) as the budget for month 1 and the additional information below, complete the 12 month budget for Majestic Enterprises. Ensure you have checked all calculations for accuracy prior to submission. Sales expected to rise monthly by 10% Variable costs to increase by 5% per month to the 6th month and then stabilize. Fixed costs to remain stable for the first 9 months then record an increase of $10,000. Admin expenses of $5,000 to be incurred in the first month with a 2% increase per month.

4.      Create a memo in Word. Comment on the trend shown in question 1 above.  During the first 5 days, was the euro rising or falling? And during those 10 days?                

5.    Most of your exports to the US belong to the model 600 RTM. The experience shows that, if the price of this product rises over 78000 dollars, the exported units will be reduced.  If this product is priced in euros, and assuming the trend shown in question 1 continues, what would be the consequences for your company’s exports?           

Q1.    In the table below are the euro-dollar exchange rates for the first ten days of November 2019. The data shows dollar per euro. Draw a line chart that shows the evolution of the euro relative to the dollar. Add a trendline.

                                    USD

            10/11/2019      1,0385

            09/11/2019      1,0443

            08/11/2019      1,0262

            07/11/2019      1,0481

            06/11/2019      1,0385

            05/11/2019      1,0566

            04/11/2019      1,0384

            03/11/2019      1,0301

            02/11/2019      1,0139

            01/11/2019      1,0019