Question 1
Please read the relevant parts of your textbook, which refer to cash flow and financial planning. To avoid any uncertainty regarding his business' financing needs at the time when such needs may arise, Cyrus Brown wants to develop a cash budget for his latest venture: Cyrus Brown Manufacturing (CBM). He has estimated the following sales forecast for CBM over the next 9 months: March $100,000 April $275,000 May $320,000 June $450,000 July $700,000 August $700,000 September $825,000 October $500,000 November $115,000 He has also gathered the following collection estimates regarding the forecast sales: Payment collection within the month of sale = 25% Payment collection the month following sales = 55% Payment collection the second month following sales = 20% Payments for direct manufacturing costs like raw materials and labor are made during the month that follows the one in which such costs have been incurred. These costs are estimated as follows: March $187,500 April $206,250 May $375,000 June $337,500 July $431,250 August $640,000 September $395,000 October $425,000 Additional financial information is as follows: Administrative salaries will approximately amount to $35,000 a month. Lease payments around $15,000 a month. Depreciation charges, $15,000 a month. A one-time new plant investment in the amount of $95,000 is expected to be incurred and paid in June. Income tax payments estimated to be around $55,000 will be due in both June and September. And finally, miscellaneous costs are estimated to be around $10,000 a month. Cash on hand on March 1 will be around $50,000, and a minimum cash balance of $50,000 shall be on hand at all times. To receive full credit on this assignment, please show all work, including formulas and calculations used to arrive at the financial values. Group Project Guidelines: As a group, prepare a monthly cash budget for Cyrus Brown Manufacturing for the 9-month period of March through November. Use Microsoft Excel to prepare the monthly cash budget. Based on your cash budget findings, answer the following questions: Will the company need any outside financing? What is the minimum line of credit that CBM will need? What do you think of CBM's cash position during the budget period? Do you see any concerns for the company in this regard? If you were a bank manager, would you want CBM as your client? Why or why not? It is up to the members of the group to divide the assignment tasks evenly. You will be graded on group participation Your submitted Group Project (200 points) must include the following: 100 Points. A Microsoft Excel spreadsheet that contains your group's monthly cash budget for Cyrus Brown Manufacturing. 100 Points. A double-spaced Word document of 1?2 pages that contains your answers to the questions listed in the Assignment Guidelines.
Question 2
Hello , i re send the case again because my teacher said the answers was not related to the case. did you red the case when you answers the questions? so pleas if you can read it again and answers all questions right as soon as possible. 1) Case (page 358 of text) : ?Hewlett-Packard Company: Network Printer Design for Universality?. Answer all the questions at the end of the case. tray to answers page 363 also. and 386 but the important is read the case first,READ THE CASE FIRST THEN ANSWERS Q PAGE 363 AND 386,SEE YOU THE ATTACHMENT,it is due today , what is the last time you can finish it ?,what is the time that good for you ?,OK no problem , but how i increase the deadline and if you can finish as soon as possible.,hello , just answers in page 363,,1-In what way is a universal power supply a postponement strategy? 2. What are the costs and benefits of a u.niversal power supply (feel free to make assumptions)? 3. How would such costs and benefits be different over the product life cycle? 4. Besides deciding on a universal power supply, what other operational improvements can you suggest to HP Boise? 5. What would be your recommendations about the adoption of a universal power supply?,hello, how i increase the deadline , do i have do something or you just accept that,ok , thanks,thanks so much , and if you finish it early before the deadline time please send it to me as soon as possible. tray to answer the questions as international student , to easy to understand , that means do not write a complex world,hello, can you give me specific time that you finish the answers.or after how many hours remaining ? and make sure just answers the q down in page 363 that related to the case . 1-In what way is a universal power supply a postponement strategy? 2. What are the costs and benefits of a universal power supply (feel free to make assumptions)? 3. How would such costs and benefits be different over the product life cycle? 4. Besides deciding on a universal power supply, what other operational improvements can you suggest to HP Boise? 5. What would be your recommendations about the adoption of a universal power supply?",good morning, have you finished thee answer , it is 9.o5 a.m and the deadline is at 9.00 . can you send it now what ever you have .,Are you online ?,OK , thanks ,but try to finish it early as soon as possible .no more than 2 hours.,Thank you so much,you are welcome
Question 3
A project has a 0.8 chance of doubling your investment in a year and a 0.2 chance of halving your investment in a year. Required: What is the standard deviation of the rate of return on this investment? (Round your answer to 2 decimal places. Omit the "%" sign in your response.) Standard deviation %,4.00% was not the correct answer. Below is the chapter reference for this problem: 6.6 Risk of Long-Term Investments p. 175 So far we have envisioned portfolio investment for one period. We have not made any explicit assumptions about the duration of that period, so one might take it to be of any length, and thus our analysis would seem to apply as well to long-term investments. Yet investors are frequently advised that stock investments for the long run are not as risky as it might appear from the statistics presented in this chapter and the previous one. To understand this widespread misconception, we must first understand how the argument goes. Are Stock Returns Less Risky in the Long Run? Advocates of the notion that investment risk is lower over longer horizons apply the logic of diversification across many risky assets to an investment in a risky portfolio over many years. Because stock returns in successive years are almost uncorrelated, they conclude that (1) the annual standard deviation of an investment in stocks falls with the investment horizon and, hence, (2) investment risk in a stock portfolio declines with the investment horizon. To be concrete, consider a two-year investment for which the rate of return in each year is normally distributed with an identical standard deviation of ?, and for which the returns in different years are uncorrelated with each other, so that Cov(r1, r2) = 0. The total rate of return over the two years7 is: (2 years) = r1 + r2. The variance of the total return over the two years equals The standard deviation is the square root of the variance, so Thus, the variance of the total two-year return is double that of the one-year return, and the standard deviation is higher by a multiple of Generalizing to an investment horizon of n years, the variance and standard deviation of the total return over n years will grow to: To put the standard deviation of total return on a per-year or annualized basis, we divide the standard deviation by the number of years, n, to obtain: In fact, this result seems identical to the annual standard deviation of an equally weighted portfolio diversified across n uncorrelated stocks, all with a common standard deviation, ?. To illustrate, consider a portfolio of two identical, uncorrelated stocks. Since the stocks are identical, the efficient portfolio will be equally weighted. Applying Equation 6.6 with weights of wA = wB = ?, p. 176 If each stock has identical standard deviation, then ?A = ?B = ?, and if they are uncorrelated, then ?AB = 0. In this case, therefore, Similarly for n stocks, with portfolio weights of 1/n in each stock, In fact, we used Equation 6.24 to draw Figure 6.1A illustrating diversification with uncorrelated stocks. Since the annual standard deviation of a portfolio diversified across n identical, uncorrelated stocks in Equation 6.24 is similar to the annualized standard deviation of a stock portfolio invested over n years (Equation 6.22), there is a temptation (to which many financial advisers have succumbed) to interpret the latter as evidence of ?time diversification? and conclude that risk over the long haul declines with investment horizon. By this reasoning, Figure 6.1A would seem to apply to time diversification as well, if you replace the number of stocks on the horizontal axis with the number of years. If this were true, time diversification would be very comforting to the many long-term investors who should, by this logic, replace safe investments with risky investments in stocks. Unfortunately, however, the logic is flawed. The Fly in the ?Time Diversification? Ointment (or More Accurately, the Snake Oil) The flaw in the logic is the use of the annualized standard deviation to gauge the risk of a long-term investment. Annualized standard deviation is an appropriate measure of risk only for annual horizon portfolios! It cannot serve to measure risk when comparing investments of different horizons and different scales. To illustrate with a simple example, suppose that investors can invest in safe bonds, and that the rate of return on all bonds is zero. The value of a stock portfolio in any year will either double or fall by one-half with equal probability. Our investor considers two strategies: A. Short-term risky strategy: Invest the entire budget in stocks for one year, then liquidate and invest the proceeds in a safe bond for the second year. B. Long-term risky strategy: Invest the entire budget in stocks for two years. The possible outcomes to this strategy are: quadrupling of value (doubling in each year), unchanged value (doubling in one year and halving in the other), or value falling by a factor of 1/4 (halving in each year). The following table compares the probability distributions of final outcomes of the two investments. p. 177 Since risk aversion makes investors concerned with downside risk, you can see that the two strategies cannot be compared on the basis of standard deviation of annualized returns. Surely a risk-averse investor will consider the two-year investment (for which value can decline by 75%) riskier and will reject outright the notion that the two-year stock investment is less risky. Time diversification advocates will say: ?But the probability of a loss is smaller, only 25%.? This argument implies that, somehow, probability of loss is a valid measure of risk. The fact of the matter is that probability of loss alone is not a legitimate measure of risk any more than is the size of the loss alone. The correct comparison is based on risk of the total (end of horizon) return, which accounts for both magnitudes as well as probabilities of possible losses. The variance of the total rate of return, which accounts for both, grows in direct proportion to the number of years, and the standard deviation grows in proportion to as in Equation 6.21. While the average risk per year may be smaller with longer horizons as in Equation 6.22, that risk compounds for a greater number of years, which certainly makes your cumulative investment outcome riskier, as Equation 6.21 makes clear. Empirical evidence on this debate is provided by the actual cost of portfolio insurance. Such insurance is common and we can observe the actual cost of insurance for various horizons and loss coverage. Suppose that for the two-year stock portfolio in our example, we purchase portfolio insurance against an investment loss that exceeds 50%. Such a policy will pay us 25? per dollar invested if the portfolio value falls by 75%, thereby equating the maximum possible loss of the two strategies. The expected loss to the insurer, per dollar of coverage, is: .25 ? 25 = 6.25?. But we observe that in capital markets, such insurance costs much more for longer horizons, which contradicts any notion that the long-term risky investment is safer than shorter-term one. Time diversification advocates consistently ignore this unshakable fact. 7To account for compounding of rates over the years, these rates must be viewed as continuously compounded returns, as explained in Chapter 5.,After entering 4% as my solution and hitting the check solution button, it was marked incorrect. Could you please provide me with the correct solution?
Question 4
On July 1, 2013, Lula Plume created a new self-storage business, Safe Storage Co. The following transactions occurred during the company's first month. July 1 Plume invested $30,000 cash and buildings worth $150,000 in the company in exchange for common stock. 2 The company rented equipment by paying $2,000 cash for the first month's (July) rent. 5 The company purchased $2,400 of office supplies for cash. 10 The company paid $7,200 cash for the premium on a 12-month insurance policy. Coverage begins on July 11. 14 The company paid an employee $1,000 cash for two weeks salary earned. 24 the company collected $9800 cash for storage fees from customers. 28 The company paid $1000 cash for two weeks salary earned by an employee. 29 The company paid $950 cash for minor repairs to a leaking roof. 30 the company paid $400 cash for this month's telephone bill. 31 The company paid $2000 cash for dividends. The company's chart of accounts follows: 101 Cash 106 Accounts Receivable 124 Office Supplies 128 Prepaid Insurance 173 Buildings 174 Accumulated Depreciation- Buildings 209 Salaries Payable 307 Common Stock 318 Retained Earnings 319 Dividends 401 Storage Fees Earned 606 Depreciation Expense- Buildings 622 Salaries Expense 637 Insurance Expense 640 Rent Expense 650 Office Supplies Expense 684 Repairs Expense 688 Telephone Expense 901 Income Summary Required: 1. Use the balance column format to set up each ledger account listed in its chard of accounts. 2. Prepare journal entries to record the transactions for July and post them to the ledger accounts. Record prepaid and unearned items in balance sheet accounts. 3. Prepare an unadjusted trial balance as of July 31. 4. Use the following information to journalize and post adjusting entries for the month: a. Two-thirds of one month's insurance coverage has expired. b. At the end of the month, $1525 of office supplies are still available. c. This month's depreciation on the buildings is $1500. d. An employee earned $100 of unpaid and unrecorded salary as of month-end. e. The company earned $1150 of storage fees that are not yet billed at month-end. 5. Prepare the adjusted trial balance as of July 31. Prepare the income statement and the statement of retained earnings for the month of July and the balance sheet at July 31, 2013. 6. Prepare journal entries to close the temporary accounts and post these entries to the ledger. 7. Prepare a post-closing trial balance.
Question 5
1. (TCO 2) Select any actions that decrease the cash account. Select all that apply: (Points : 3) Goods are sold on credit An interest payment on a notes payable is made The electric bill is paid Dividends are paid to shareholders 2. (TCO 2) Which one of the following will decrease the operating cycle? (Points : 3) increasing the days' sales in inventory decreasing the accounts payable period decreasing the cash cycle increasing the accounts receivable turnover rate decreasing the accounts payable turnover rate 3. (TCO 2) Assume Green Leaf Nursery anticipated sales of $500 in the first quarter. Accounts receivable at the beginning of the year was $300. Assuming a collection period of 30 days, which is the approximate beginning balance for the second quarter? (Points : 3) $550 $630 $250 $170 None of the above 4. (TCO 2) Which one of the following practices will reduce a firm's collection float? (Points : 3) utilizing zero-balance accounts depositing checks weekly rather than daily requiring all customers pay by check rather than with cash installing a lockbox system paying all bills five days sooner 5. (TCO 2) Which of the following statements is true? Select all that apply: (Points : 3) The optimal credit policy minimizes the total cost of granting credit. Firms should avoid offering credit at all cost. An increase in a firm's average collection period generally indicates that an increased number of customers are taking advantage of the cash discount. The costs of the credit application process and the costs expended in the collection process are carrying costs of granting credit. Capacity refers to the ability of a firm to meet its credit obligations out its operating cash flows. The optimal credit policy is the policy that produces the largest amount of sales for a firm. 6. (TCO 2) You place an order for 100 units of inventory Part A at a unit price of $522. The supplier offers terms of 2/25, net 40. How much should you remit if you take the discount? (Points : 3) $52,200 $51,156 $51,678 None of the above 7. (TCO 2) Auto Parts sells 1,200 electric parts per week and then reorders another 1,200 parts. If the relevant carrying cost per electric part is $4 and the fixed order cost is $750, what is the total carrying cost and the restocking cost, respectively? (Points : 3) $2,400 and $39,900 $3,200 and $33,800 $2,400 and $39,000 $3,400 and $30,000 None of the above 8. (TCO 2) Company ABC has expected sales of 12,000 units this year, an ordering cost of $6 per order and carrying costs of $1.60 per unit. What is the average inventory? (Points : 3) 310 units 300 units 150 units 155 units None of the above 9. (TCO 2) The _________ is the time it takes to acquire and sell inventory. (Points : 3) cash cycle operating cycle inventory period accounts receivable period accounts payable period 10. (TCO 2) List three ways in which the firm can expedite payments and accounts receivables. (Points : 3)
