Question 1
A company had stock outstanding as follows during each of its first three years of operations: 2,500 shares of $10, $100 par, cumulative preferred stock and 50,000 shares of $10 par common stock. The amounts distributed as dividends are presented below. Determine the total and per share dividends for each class of stock for each year by completing the schedule. Preferred Common Year Dividends Total Per Share Total Per Share 1 $10,000 _________ _________ _________ _________ 2 25,000 _________ _________ _________ _________ 3 60,000 _________ _________ _________ _________ 2. Selected transactions completed by Breezeway Construction during the current fiscal year are as follows: February 3 Split the common stock 2 for 1 and reduced the par from $40 to $20 per share. After the split there were 250,000 common shares outstanding. April 10 Declared semiannual dividends of $1.50 on 18,000 shares of preferred stock and $0.08 on the common stock to stockholders of record on May 10, payable on June 9. June 9 Paid the cash dividends. October 10 Declared semiannual dividends of $1.50 on the preferred stock and $0.04 on the common stock (before the stock dividend). In addition, a 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $36. December 9 Paid the cash dividends and issued the certificates for the common stock dividend. Required: Journalize the transactions. 3. Sorenson Co., is considering the following alternative plans for financing their company: Plan I Plan II Issue 10% Bonds (at face) - $3,000,000 Issue $10 par Common Stock $4,000,000 $1,000,000 Income tax is estimated at 40% of income. Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax is $1,000,000. 4. Journalize the entries to record the following selected bond investment transactions for Southwest Bank: (1) Purchased $400,000 of Daytona Beach 5% bonds at 100 plus accrued interest of $4,500. (2) Received the first semiannual interest. (3) Sold $250,000 of the bonds at 97, plus accrued interest of $1,800. 5. During 2012, its first year of operations, Makala Company purchased two available-for-sale investments as follows: Security Shares Purchased Cost Oceanna Company 700 $29,000 Rockledge, Inc. 1,900 41,000 Assume that as of December 31, 2012, the Oceanna Company stock had a market value of $49 per share and Rockledge, Inc. stock had a market value of $20 per share. Makala had 10,000 shares of no par stock outstanding that was issued for $150,000. For the year ending December 31, 2012, Makala had a net income of $105,000. No dividends were paid. Required: (1) Prepare the Current Assets section of the balance sheet presentation for the available-for sale securities as of December 31, 2012. (2) Prepare the Stockholders? Equity section of the balance sheet as of December 31, 2012. 6. Durrand Corporation?s accumulated depreciation increased by $12,000, while patents decreased by $2,200 between consecutive balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $4,300 from sale of land. Reconcile a net income of $65,000 to net cash flow from operating activities. 7. Dorman Company reported the following data: Net income $225,000 Depreciation expense 25,000 Gain on disposal of equipment 20,500 Decrease in accounts receivable 14,000 Decrease in account payable 3,600 Prepare the Cash Flows from Operating Activities section of the statement of cash flows using the indirect method. 8. A company reports the following: Net income $350,000 Preferred dividends $50,000 Average stockholders? equity $1,000,000 Average common stockholders? equity $800,000 Determine the (a) rate earned on stockholders? equity, and (b) rate earned on common stockholders? equity. Round your answer to one decimal place. 9. On the first day of the current fiscal year, $2,000,000 of 10-year, 7% bonds, with interest payable annually, were sold for $2,125,000. Present entries to record the following transactions for the current fiscal year: (a) Issuance of the bonds. (b) First annual interest payment. (c) Amortization of bond premium for the year, using the straight-line method of amortization. 10. Revenue and expense data for Martinez Company are as follows: 2012 2011 Administrative expenses $37,000 $20,000 Cost of goods sold 350,000 320,000 Income tax 40,000 32,000 Net sales 800,000 700,000 Selling expenses 150,000 110,000 (a) Prepare a comparative income statement, with vertical analysis, stating each item for both 2012 and 2011 as a percent of sales. (b) Comment upon significant changes disclosed by the comparative income statement. Round percentage to one decimal place.
Question 2
This assignment is based on the following case: Gordon Bethune at Continental Airlines, Harvard Business School Publishing Case 9-406-073. This individual project is intended to give students an opportunity to analyze a complex organizational situation using concepts learned in this course. Students are expected to work on this project offline through the progression of the course. Its objective is to position you as a leader in an organization faced with a complex organizational challenge, and look to you to analyze this situation and develop an approach to address it. This will give you an opportunity to apply your knowledge of some of the concepts learned about organizational behavior and organizational management. Please prepare a written paper of length 4 pages. The paper should be well-structured, well-written, and of high quality. Please use font size 12 and 1.5 line spacing or double line spacing. Here are four specific questions you are required to answer. All of these questions must be answered. Students must make an effort to develop perspectives and provide supporting analysis, and incorporate some OB (Organizational Behavior) concepts and frameworks in the analysis. Grading will be based on the quality of analysis and perspectives presented. 1. Characterize and discuss the complexity of the situation that Gordon Bethune faced when he joined Continental. What was the situation like? (5 points) 2. Discuss some of the steps that were effective in turning the company around. Specifically, what were some of the highlights of the ?Go Forward Plan?? (5 points) 3. Discuss three personal leadership qualities demonstrated by Gordon Bethune in his efforts to turn the state of the company around. (5 points) 4. Discuss three lessons we can take away from this case regarding the significance of appreciating the role of OB in managing highly complex organizational settings such as the one presented in this case. (5 points) The paper may be structured in any format; however, the answers to these four questions must be specifically and clearly presented. The paper should not exceed 4 pages. References to the case and other sources, if any, should be listed on a separate, additional page.
Question 3
The clayton Manufacturing Company is considering an investment in a new automated inventory system for its warehoues that will provide cash savings to the firm over the next five years. The firm's CEO anticipates earnings before interest, taxes, depreciation(EBITDA) from cost savings equal to $200, 000 for the first year of the operation of the center; over the next four years, the estimate that this amount will grow at the rate of 5% per year. The system will require an initial investment of $800,000 that will be depreciated over the a five year period using the straight-line depreciatio of $160,000 per year and a zero estimated salvage value. A) caculate the project's annual free cash flow (FCF) for each of the next five years, where the firm's tax rate is 35%. B) If the cost of capital for the project is 12%, what is the projected NPV for the investment? C) What is the minimum year 1 dollars savings (i.e.,EBITDA) required to produce a breakeven NPV=0?,Ok, thanks!I have one more question and trying to post it.,Ok, thanks!I have one more question and trying to post it.,Ok, please answer the question i will pay the $40.00. Thanks, Thomas,How do I get my answer? where do I retrive my answer?
Question 4
The production department has been investigating possible ways to trim total production costs. One possibility currently being examined is to make the paint cans instead of purchasing them. The equipment needed would cost $200,000, with a disposal value of $40,000, and it would be able to produce 5,500,000 cans over the life of the machinery. The production department estimates that approximately 1,100,000 cans would be needed for each of the next five years. The company would hire three new employees. These three individuals would be full-time employees working 2,000 hours per year and earning $12.00 per hour. They would also receive the same benefits as other production employees, 18% of wages, in addition to $2,500 of health benefits. It is estimated that the raw materials will cost 25? per can and that other variable costs would be 5? per can. Since there is currently unused space in the factory, no additional fixed costs would be incurred if this proposal is accepted. It is expected that cans would cost 45? each if purchased from the current supplier. The company's minimum rate of return (hurdle rate) has been determined to be 12% for all new projects, and the current tax rate of 35% is anticipated to remain unchanged. The pricing for a gallon of paint, as well as the number of units sold, will not be affected by this decision. The unit-of-production depreciation method would be used if the new equipment is purchased. Required: 1. Based on the above information and using Excel, calculate the following items for this proposed equipment purchase: o Annual cash flows over the expected life of the equipment o Payback period o Annual rate of return o Net present value o Internal rate of return 2. Would you recommend the acceptance of this proposal? Why or why not? Prepare a short double-spaced Word paper elaborating and supporting your answer.",I need step by step solution.
Question 5
1. Consider a one-year discount bond that pays $2,000 one year from now. If the rate of discount is 3 percent, calculate the present value of the bond. 2. Consider a one-year discount bond that has a present value of $3,000. If the rate of discount is 5 percent, calculate the future value of the bond (the amount the bond pays in one year). 3. Consider a perpetuity that pays $300 every year. If the rate of discount is 6 percent, calculate the present value of the bond. 4. Consider a fixed-payment security that pays $250 at the end of every year for eight years. If the rate of discount is 3 percent, calculate the present value of the bond. 5. Consider a coupon bond that pays $150 every year and repays its principal amount of $2,000 at the end of six years. If the rate of discount is 7.5 percent, what is the present value of the bond? 6. Consider a coupon bond that pays $350 every year and repays its principal amount of $5,000 at the end of four years. If the rate of discount is 6 percent, what is the present value of the bond? 7. Answer the questions below. Chapter 4: Present Value 55 a. You are negotiating a book deal for your newest novel in which an economist single-handedly saves the world. The publisher offers to pay you an advance of $1 million today plus $500,000 at the end of each of the next three years. What is the present value of these payments, given your rate of discount of 5 percent? Show your work. You may round to the nearest thousand dollars. b. You counter the publisher's offer with a counteroffer that will pay you $1.5 million today plus $5 per book sold in each of the next three years. You think you will sell 80,000 books each year in that period, but the publisher thinks you will only sell 40,000 books each year. Explain why both you and the publisher like this counteroffer better than the deal in part a. Show your work. 8. You borrow $30,000 for 10 years to pay tuition and fees. The annual interest rate is 12 percent. What monthly payment would be required to pay off the loan
