(10–10) Capital Budgeting Methods (10–10) Capital Budgeting Methods Question Capital Budeting Methods(10–10) Capital Budgeting Methods Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year for 5 years. Project L costs $25,000 and is expected to produce cash flows of $7,400 per year for 5 years. Calculate the two projects' NPVs, IRRs, MIRRs, and PIs, assuming a cost of capital of 12%. Which project would be selected, assuming they are mutually exclusive, using each ranking method? Which should actually be selected? Inputsr12%Initial CostTimeProject SProject L0-$10,000-$25,000Project SNPVIRRMIRRPI$814.3315.24%13.77%1.081Cash Flows1$3,000$7,4002$3,000$7,4003$3,000$7,4004$3,000$7,400Project L$1,675.3414.67%13.46%1.0675$3,000$7,400Initial CostYearProj S012345-100002678.571428572391.581632652135.340743441906.554235211702.28056716Proj L-250006607.14295899.23475267.17384702.83384198.9587Which Project is to be selected?Using NPV, Project S wins with 814.33 vs 1,675.34Using IRR, Project S also wins with 15.24% vs 14.67%Using MIRR, Project S also wins with 13.77% vs 13.46%Using PI, again, project S wins with 1.081 vs 1.067Overall, although project L has an NPV higher than project S, in both IRR and MIRR, S is higher. PI is also smaller for project S, so I would choose S over L(10–17) Unequal LivesThe Perez Company has the opportunity to invest in one of two mutually exclusivemachines that will produce a product it will need for the foreseeable future. MachineA costs $10 million but realizes after -tax inflows of $4 million per year for 4 years.After 4 years, the machine must be replaced. Machine B costs $15 million andrealizes after-tax inflows of $3.5 million per year for 8 years, after which it must bereplaced. Assume that machine prices are not expected to rise because inflation willbe offset by cheaper components used in the machines. The cost of capital is 10%. Byhow much would the value of the company increase if it accepted the better machine?What is the equivalent annual annuity for each machine ?Unequal LivesInputsr10%Initial CostTimeMachine A-1Machine A-2Sum CFs0NPVA-1EFFAMachine BNPVEFFBAnalysisCash Flows1234NPVA-1,A-25678Multiple Rates of ReturnCOC8%Initial CostTimeProjectPVNPVIRRCash Flows02$4.40$0-$4a. Plot the project's NPV profile.b. Should the project be accepted if r = 8%? If r = 14%? Explain your reasoning.aData table for questionCost of Capital NPVIRR-$4.40c. Can you think of some other capital budgeting situations in which negative cashflows during or at the end of the project's life might lead to multiple IRRs?0%d. What is the project's MIRR at r = 8%? At r = 14%? Does the MIRR method lead tothe same accept-reject decision as the NPV met2%4%6%8%10%12%14%16%18%20%100%200%400%b1(10–19) Multiple Rates of ReturnThe Ulmer Uranium Company is deciding whether or not it should open a strip minewhose net cost is $4.4 million. Net cash inflows are expected to be $27.7 million, allcoming at the end of Year 1. The land must be returned to its natural state at a cost of$25 million, payable at the end of Year 2.see your table above and decide using NPV rule: accept positive NPV, reject negative net present valuescdMIRRr8%14%Economic Life(10–22) Economic LifeThe Scampini Supplies Company recently purchased a new delivery truck. The newtruck cost $22,500, and it is expected to generate net after-tax operating cash flows,including depreciation, of $6,250 per year. The truck has a 5 -year expected life. Theexpected salvage values after tax adjustments for the truck are given below. Thecompany's cost of capital is 1Inputsr10%Year012345AnnualTotal PVPV Cash PF SalvageOperating Salvage Valueper year DflowsValueCash Flow+E?$22,500$ 22,5006,25017,5006,25014,0006,25011,0006,2505,0006,2500Operate for 5 YearsOperate for 4 YearsOperate for 3 YearsOperate for 2 YearsOperate for 1 YearabNPVNPVNPVNPVNPV$0$0$0$0$0Year012345AnnualOperatingCash Flow?$22,5006,2506,2506,2506,2506,250Salvage Value$ 22,50017,50014,00011,0005,0000a. Should the firm operate the truck until the end of its 5-year physical life? If not,then what is its optimal economic life?b. Would the introduction of salvage values, in addition to operating cash flows, everreduce the expected NPV and/or IRR of a project?
ACC – After several years of business, Abel, Barney, and Cole are liquidating ACC – After several years of business, Abel, Barney, and Cole are liquidating Question Part A (15 points each for a possible total of 30 points) (1) After several years of business, Abel, Barney, and Cole are liquidating. The following are post-closing account balances.Cash 18,000Inventory 73,000Other assets 157,000 Accounts Payable 61,000 Abel, Capital 50,000 Barney, Capital 50,000 Cole, Capital 87,000Non-cash assets are sold for $275,000. Profits and losses are shared equally.After all liabilities are paid, divide the remaining cash amongst the partners.? (2) The partnership of Brandon and Ryan is being liquidated. All gains and losses are shared in a 3:1 ratio, respectively. Before liquidation, their balance sheet balances are as follows:Cash $10,000Other Assets 8,000Liabilities 4,000Brandon, Capital 7,000Ryan, Capital 7,000a. If the Other Assets are sold for $10,000, how much will each partner receive before paying liabilities and distributing the remaining assets? b. If the Other Assets are sold for $8,000, how much will each partner receive before paying liabilities and distributing remaining assets? Part B (20 points each for a possible total of 40 points) (1) Simon Brothers pays $47,000 into a bond sinking fund each year to redeem the future maturity of its bonds. During the first year, the fund earned $3,825. At the time of bond redemption, the fund has a balance of $417,000. Of this, $400,000 was used to redeem the bonds. Journalize the following entries.a. Initial depositb. The first year's interestc. The redemption of the bonds (2) On January 1, Auctions Online issued $300,000, 9%, 10-year bonds to lenders at the contract rate. Interest is to be paid semiannually on July 1 and January 1. Journalize the following entries.a. Issued the bondsb. Paid first semiannual interest paymentc. Retired the bonds at maturity? Part C (15 points each for a possible total of 30 points) (1) Prepare a statement of retained earnings in proper form for White Corporation for the year ended December 31, 2012, from the following:Retained Earnings, January 1, 2012 $2,000Dividends paid during the year 800Net income for the year 3,000Correction of prior year error. Purchaseof land recorded as rent expense 1,000 (2) Curtis Corporation's balance sheet included the following:Common Stock, $5 par value, 5,000 shares issuedand outstanding $25,000Retained Earnings 20,000Total Stockholders' Equity $45,000Prepare journal entries for the following transactions.May 3 Issued 500 shares at $6 per share. 9 Reacquired 100 shares at $4 per share. 15 Reissued 50 of the Treasury shares at $7 per share. 17 Reissued 10 of the Treasury shares at $3 per share. Part A (5 points each for a possible total of 15 points) The following information is given for Tripp Company, which uses the indirect method.Net income $20,000Depreciation expense 3,000Increase in accounts receivable 2,000Payment of dividends 2,000Proceeds from sale of equipment 6,000Increase in accounts payable 4,000Decrease in inventory 3,000From the information provided, answer the following questions: (1) The cash flow from operating activities is ________. (2) The cash flow from investing activities is ________. (3) The cash flow from financing activities is ________.? Part B (5 points each for a possible total of 25 points)Selected data for Stick's Design are given as of December 31, Year 1 and Year 2 (rounded to the nearest hundredth). Year 2 Year 1Net Credit Sales $25,000 $30,000Cost of Goods Sold 16,000 18,000Net Income 2,000 2,800Cash 5,000 900Accounts Receivable 3,000 2,000Inventory 2,000 3,600Current Liabilities 6,000 5,000Compute the following: (1) Current ratio for Year 2. (2) Acid-test ratio for Year 2. (3) Accounts receivable turnover for Year 2. (4) Average collection period for Year 2. (5) Inventory turnover for Year 2. Part C (30 points)Prepare an income statement showing departmental contribution margin based on the following: Dept. X Dept. Y Rent ExpenseSpace (square feet) 17,500 35,000Net Sales $60,000 $40,000Cost of Goods Sold 18,000 16,000Rent Expense (allocated based on square feet) $2,700? Part D (5 points each for a possible total of 30 points)From the following transactions, prepare the appropriate general journal entries for the month of April. (1) Raw materials costing $60,000 were issued from the storeroom. (2) Direct labor of $53,000 was charged to production. (3) Indirect labor costs of $17,000 were incurred. (4) Overhead was applied at the rate of 40% of direct labor dollars.(5) Completed products costing $42,000 were transferred to finished goods. (6) Products costing $32,000 were sold.
ACC – P11-5 and P11-6 Week 5 Assignment ACC – P11-5 and P11-6 Week 5 Assignment Question P 11-15 Property, plant, and equipment and intangible assets; comprehensive The Thompson Corporation, manufacturer of steel products, began operations on October 1, 2009. The accounting department of Thompson has started the fixed- asset and depreciation schedule presented below. You have been asked to assist in completing this schedule. In addition to ascertaining that the data already on the schedule are correct, you have obtained the following information from the company’s records and personnel: a. Depreciation is computed from the first of the month acquisition to the first of the month of disposition. b. Land A and Building A were acquired from a predecessor corporation. Thompson paid 812,000 for the land and building together. At the time of acquisition, the land had a fair value of 72,000 and the building had a fair value of 828,000. c. Land b was acquired on October 2, 2009, in exchange for 3,000 newly issued shares of Thompson’s common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $25 per share. During October 2009, Thompson paid $10,400 to demolish an existing building on this land so it could construct a new building. d. Construction of Building B on the newly acquired land began on October 1, 2010. By September 30, 2011, Thompson had paid $210,000 of the estimated total construction costs of $300,000. Estimated completion and occupancy are July 2012. e. E. Certain equipment was donated to the corporation by the city. An independent appraisal of the equipment when donated placed the fair value of $16,000 and the residual value at $2,000. f. Machine A’s total cost of $110,000 includes installation charges of $550 and normal repairs and maintenance of $11,000. Residual value is estimated at 5,500. Machine A was sold on February 1, 2011. g. On October 1, 2010, Machine B was acquired with a down payment of $4,000 and the remaining payments to be made in 10 annual installments of $4,000 each beginning October 1, 2011. The prevailing interest rate was 8% . Fixed Asset and Depreciation Schedule For Fiscal Years Ended September 30, 2010 and September 30, 2011 Depreciation for Year Ended 9/30 Assets Acquisition Date Cost Residual Depreciation Method Estimated Life in Years 2010 2011 Land A 10/1/2009 (1) N/A N/A N/A N/A N/A Building A 10/1/2009 (2) 47,500 SL (3) 14,000 (4) Land B 10/2/2009 (5) N/A N/A N/A N/A N/A Building B under construction 210,000 to date - SL 30 - (6) Donated Equipment 10/2/2009 (7) 2,000 150% declining balance 10 (8) (9) Machine A 10/2/2009 (10) 5,500 Sum-of-the-digits 10 (11) (12) Machine B 10/1/2010 (13) SL 15 _ (14) N/A= Not Applicable Required:Supply the correct amount for each numbered item on the schedule. Round each answer to the nearest dollar. (AICPA adapted) P11-6 Depreciation methods: partial-year depreciation; sale of assets On March 31, 2011, the Herzog Company purchased a factory complete with machinery and equipment. The allocation of the total purchase price of $1,000,000 to the various types of assets along with estimated useful lives and residual values are as follows: Assets Cost Estimated Residual Value Estimated Useful Life in Years Land 100,000 N/A N/A building 500,000 none 25 Machinery 240,000 10% of cost 8 Equipment 160,000 13,000 6 Total 1,000,000 On June 28, 2012, machinery included in the March 31, 2011, purchase that cos $100,000 was sold for $80,000. Herzog uses the straight-line depreciation method for buildings and machinery and the sum-of-the-years’-digits method for equipment. Partial-year depreciation is calculated based on the number of months an asset is in service. Required: 1. Compare depreciation expense on the building, machinery, and equipment for 2011. 2. Prepare journal entries to record (1) depreciation on the machinery sold on June 29, 2012, and (2) the sale of machinery. 3. Compute depreciation expense on the building, remaining machinery, and equipment for 2012.
Assignment 4: HR Training Class Assignment 4: HR Training Class Question Assignment 4: HR Training ClassImagine that you are a member of the HR department of a small retail company and upper management has asked you to create a new employee customer service training class for all new employees.Write a six to seven (6-7) pages paper in which you:1. Justify the use of a needs assessment of your company’s proposed employee customer service training, stressing five (5) ways in which such an assessment would expose any existing performance deficiencies.2. Develop a customer service training implementation plan and determine the method of training (i.e., presentation, discussion, case study, discovery, role play, simulation, modeling, or on-the-job training).3. Justify why you selected the training method that you did.4. Propose two (2) ways to motivate an employee who has no interest in attending a training class.5. Develop a survey to collect feedback from the employees who attend the training.6. Use at least three (3) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as academic resources.Your assignment must follow these formatting requirements:1. Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.2. Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
ACC401 Assignment: Multinational Acquisition ACC401 Assignment: Multinational Acquisition Question Assignment: Multinational AcquisitionDue Week 8 and worth 240 pointsUse the Internet to research a publically traded U.S. multinational corporation that has recently acquired another multinational corporation.Write a six to eight (6-8) page paper in which you:1. Briefly describe the acquisition you have selected.2. Analyze the accounting requirements for the business combination and discuss challenges in preparing the financial statements for the consolidation of subsidiaries on the date of acquisition.3. Evaluate the amount of goodwill or other intangible assets derived from the transaction and explain whether or not you support that this value was created as a result of the business combination.4. Analyze special issues related to business consolidations including changes in ownership, insolvency, liquidation, and reorganization resulting from the acquisition you selected.5. For the company your selected, identify the key areas of difference for the acquisition reporting if IFRS was used instead of US GAAP and if the difference would be material to the profitability of the combined entity.6. Include three (3) external sources to support your position
Moreno Industries_Direct Materials Purchases Budget Moreno Industries_Direct Materials Purchases Budget Question Moreno Industries has adopted the following production budget for the first 4 months of 2013. Month Units Month Units January 10,000 March 5,000 February 8,000 April 4,000 Each unit requires 3 pounds of raw materials costing $2 per pound. On December 31, 2012, the ending raw materials inventory was 9,000 pounds. Management wants to have a raw materials inventory at the end of the month equal to 30% of next month's production requirements. Complete the direct materials purchases budget by month for the first quarter. MORENO INDUSTRIES Direct Materials Purchases Budget For the Quarter Ending March 31, 2013 January February March × × × Total pounds needed for production Add: Total materials required Less: Direct materials purchases × $ × $ × $ Total cost of direct materials purchases $ $
Estimated demand Estimated demand Question Determine the implications for each of the computed elasticities for the business in terms of short-term and long-term pricing strategies. Provide a rationale in which you cite your results.
1. XYZ has been an S corporation since its inception six years 1. XYZ has been an S corporation since its inception six years Question 1. XYZ has been an S corporation since its inception six yearsResolved Question:1. XYZ has been an S corporation since its inception six years ago. On January 1 of the current year, the corporation's two equal shareholders, John and Jane, had adjusted bases of $150,000 and $175,000, respectively, for their S corporation's stock. The shareholders plan to have the corporation distribute land with a $50,000 adjusted basis and a $200,000 FMV in the current year. Ordinary income is expected to be $180,000 in the current year. What tax issues should John and Jane consider with respect to the distribution?2. Zap Corporation has always been an S corporation and is 100% owned by David. David has a basis of $40,000 in his Zap stock at the beginning of the year. During the year, Zap has an ordinary loss of $20,000 and a long-term capital gain of $10,000. In addition, Zap Corporation distributed $55,000 in cash to David on December 1. Will the distribution cause David to recognize a gain? If so, what are its amount and character?3. An S corporation, reports the following results for the current year:Ordinary income $70,000Long-term capital gain $20,000Municipal bond interest income $10,000Domestic corporate dividends $6,000Charitable contributions $16,000The corporation AAA and accumulated E&P balances at the beginning of the year are $80,000 and $50,000, respectively. The corporation makes a $100,000 cash distribution to its sole shareholder on June 1 and a second $100,000 cash distribution on December 1. The shareholder's basis for the S Corp stock on January 1 was $120,000. Discuss the tax consequences of these transactions.
Write a 500- to 750-word paper in which you discuss generally accepted accounting principles relating to health care. Write a 500- to 750-word paper in which you discuss generally accepted accounting principles relating to health care. Question Write a 500- to 750-word paper in which you discuss generally accepted accounting principles relating to health care.Include a brief description of each principle and the intention behind the principle.Relate each principle to health care.Format your paper consistent with APA guidelines.
According to the textbook, there is a finite amount of time that our civilization According to the textbook, there is a finite amount of time that our civilization Question According to the textbook, there is a finite amount of time that our civilization can exist based on which of the following? A. Our civilization is based on non-renewable resources. B. Our production of nuclear weapons will lead to mass destruction. C. At the present birth and death rates, our population will outgrow its capacity to feed itself. D. Plagues and diseases from non-industrialized countries will kill the population. Question 2 of 20 Behind the United States, the world's second largest emitter of energy-related emissions is: A. Mexico. B. China. C. The Soviet Union. D. Europe. Question 3 of 20 In the year 2000, fossil fuels accounted for __________ of energy use while new renewable sources accounted for only __________. A. 50%; 12% B. 70%; 5% C. 77%; 2% D. 97%; 3% Question 4 of 20 Which of the following regions has the largest crude oil and natural gas reserves? A. North America B. Central and South America C. Europe D. Middle East Question 5 of 20 According to the textbook, the world adds about __________ of CO2 to the atmosphere from fossil fuel combustion each year, whereas sustainable, stable amounts would be about __________. A. 6 billion tons; 1 billion B. 4 million tons; 1 billion C. 8 billion tons; 3 billion D. 4 billion tons; 6 billion Question 6 of 20 In 2006 the global oil prices reached slightly above __________ a barrel. $108 A. $98 B. $88 C. $78 Question 7 of 20 The advantages of __________ as an energy source are that it is abundant, versatile, and inexpensive compared with other energy sources. A. coal B. hydroelectric power C. solar power D. crude oil Question 8 of 20 Which of the following fossil fuels can make a significant contribution towards improving air quality if employed into the transportation sector? A. Crude Oil B. Coal C. Natural gas D. Solar power Question 9 of 20 During the 1990s, wind power grew at a rate of __________ while solar energy grew at a rate of __________. A. 36%; 27% B. 26%; 17% C. 17%; 26% D. 27%; 36% Question 10 of 20 Nuclear energy provides about __________ of electricity in the United States. A. 10% B. 15% C. 19% D. 25% Question 11 of 20 The world's first large-scale nuclear power plant began operations in: A. 1947. B. 1957. C. 1967. D. 1977. Question 12 of 20 The Yucca mountain nuclear waste repository (proposed in 1988 to be located in Nevada) will not offer permanent storage of nuclear waste until at least: A. 2017. B. 2027. C. 2037. D. It began storing waste in 2007. Question 13 of 20 According to Michael Renner, the main objective of the war in Iraq is: A. to Liberate Iraq. B. to maintain a cheaper supply of oil. C. because President Bush wanted to punish President Saddam Hussain. D. for unidentified political advancements. Question 14 of 20 Which of the following power technologies has the highest fuel (thermal) efficiency? A. Fuel cell B. Steam electric power plant C. Nuclear electric power D. Gas turbine electric power plant Question 15 of 20 According to the textbook, Iceland's proposed hydrogen economy is driven by all of the following EXCEPT: A. recent developments in hydrogen fuel cells. B. the movement to combat global climate change. C. concerns over the price and supply of oil. D. ethnic pride. Question 16 of 20 All of the following processes are used in biomass energy technology EXCEPT: A. radiation. B. combustion. C. gasification. D. pyrolysis. Question 17 of 20 The technology that converts solar radiation into electricity is called __________ energy. A. fossil fuel B. hydroelectric C. nuclear D. photo-voltaic Question 18 of 20 One advantage of hydroelectric power generation is: A. the production of high-level chemical waste but no greenhouse gases. B. very high efficiency converting water to electrical energy. C. a wide range of sites for plant construction. D. low construction costs. Question 19 of 20 Which of the following is NOT a disadvantage of hydroelectric power generation? A. Dam construction causes loss of land suitable for agriculture. B. Dam construction prevents upstream migration of fish. C. Downstream water flow becomes unpredictable and creates extreme conditions. D. Drought conditions can affect power production. Question 20 of 20 The biggest roadblock for electric cars is: A. storing the electricity needed to run them. B. the inefficiency of the electric motor. C. the lack of usable prototypes. D. low-volume production.