In a particular market there are several hundred firms, all of the firms produce an identical product, and it is easy to get in and out of the market. At the current market equilibrium we observe the following for a typical firm:
P=100
MC=100
ATC=75
In: Economics
In: Finance
In: Accounting
On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $84,000 in assets in exchange for its common stock to launch the business. On October 31, the company’s records show the following items and amounts.
Cash $ 11,360 Cash dividends $ 2,000
Accounts receivable 14,000 Consulting revenue 14,000
Office supplies 3,250 Rent expense 3,550
Land 46,000 Salaries expense 7,000
Office equipment 18,000 Telephone expense 760
Accounts payable 8,500 Miscellaneous expenses 580
Common Stock 84,000
Using the above information prepare an October 31 balance sheet for Ernst Consulting.
In: Accounting
KADS, INC has spent $400,000 on research to develop a new computer game. The firm is planning to spend $200,000 on a machine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated using bonus depreciation:they total $50,000. The machine has an expected life of three years and a $75,000 estimated resale value. Revenue from the new game is expected to be $600,000 per year, with costs of $250,000 per year. The firm has a tax rate of 21 percent, an opportunity cost of capital of 15 percent, and it expects net working capital to increase by $100,000 at the beginning of the project. What will cash flows for this project be?
In: Finance
A comic book publisher must meet the following demand for a popular comic book on time or risk long term loss of revenue as schools change to another comic: quarter 1-60,000; quarter 2-40,000; quarter 3-50,000; quarter 4-15,000. The comic can be printed for $25 with regular-time labor and for $35 with overtime labor. At most 30,000 comics can be printed with regular-time labor in a single quarter. The publisher currently has 5,000 comics on hand. It costs $4 per quarter to hold a comic in inventory. Formulate an LP to meet the demand on time at minimum cost.
In: Operations Management
Question 1 (6pts). For the cash flows shown below, answer the following questions. (Assume MARR = 12%) (1) (2pts) Provide the equation using PW to find the ROR of the cash flow given. (2) (2pts) Decide whether the project is acceptable or not using RATE function in MS Excel. Provide the screenshot (3) (2pts) Decide whether the project is acceptable or not using IRR function in MS Excel. Provide the screenshot
|
Year |
Factor |
Amounts |
|
0 |
Investment ($) |
1,200,000 |
|
1-10 |
Revenue ($ per year) |
300,000 |
|
1-10 |
M&O cost ($ per year) |
100,000 |
|
10 |
Salvage ($) |
400,000 |
In: Finance
The Hamilton Company manufactures two products: X and Y. Contribution margin per unit is determined as follows:
Product X Product Y
Revenue........................................... $130................. $80
Variable Costs................................... .$70................. $38
Contribution margin............................ $60................. $42
Total demand for X is 16,000 units and for Y is 8,000 units. Machine hours are a scarce resource. 42,000 machine hours are available during the year. Product X requires 6 machine hours per unit, while Product Y requires 3 machine hours per unit. How many units of X and Y should Hamilton Company produce?
In: Operations Management
Diane Corporation is preparing its year-end balance sheet. The
company records show the following selected amounts at the end of
the year:
| Total assets | $ | 590,000 | |
| Total noncurrent assets | 354,000 | ||
| Liabilities: | |||
| Notes payable (8%, due in 5 years) | 20,000 | ||
| Accounts payable | 54,000 | ||
| Income taxes payable | 12,000 | ||
| Liability for withholding taxes | 5,000 | ||
| Rent revenue collected in advance | 10,000 | ||
| Bonds payable (due in 15 years) | 99,000 | ||
| Wages payable | 10,000 | ||
| Property taxes payable | 6,000 | ||
| Note payable (10%, due in 6 months) | 13,000 | ||
| Interest payable | 500 | ||
| Common stock | 290,000 | ||
In: Accounting
SIU is a university in the UK catering for international students. There are currently 950 students. Fees were £16,000 for the last year and the president is concerned that adverse changes in the economic and educational environment are threatening the university’s future. The income of the market is expected to decline next year by 2%, and it is also expected that the average fee of competitive institutions will fall from £14,000 to £12,000. 10% of revenue is currently spent on promotion. The president does some research and estimates that the relevant demand elasticities are as follows:
PED = -1.6, YED = 2.2, AED = 1.8, CED = 0.8.
In: Economics