Question 1
Hey guys! If you coiuld please answer these few questions I would greatly appreciate it! It may seem like a lot because I must also post the story. Thank you so much in advance!!! Road King Trucks Introduction Michael Livingston has recently been hired as the CEO of Road King Trucks, Inc. Previously he had been the marketing manager for a large manufacturing company and had established a reputation for identifying new consumer trends. Road King Trucks Inc. is a California-based truck manufacturing company. The company is well known for manufacturing large, heavy-duty trucks at a reasonable cost. One of its greatest achievements is that its trucks can be easily modified or customized for different applications. Road King Trucks also builds school buses. The company is considering an expansion of its current product line to include transit buses. Mr. Livingston feels that due to high gasoline prices, commuters will be more willing to consider using mass transit instead of using their cars to commute to work. Company Profile Road King Trucks, Inc. was established by the Smith brothers in 1880 as the California Wagon Company. The firm started manufacturing horse-drawn wagons to serve the growing population in California. The brothers quickly realized that the times were changing, so they started looking for the technologies that would keep them at the forefront of their field of business. In 1915, the Smith brothers decided that they needed to make trucks as replacements for the wagons, because trucks were starting to serve the same uses as wagons, and the wagon industry was not going to be viable in the longer term. The company started making school buses in the early 1940?s. Most manufacturers had been commissioned by the government to produce different large vehicles to support World War II operations. Road King Trucks opted to produce buses. It was an easy decision to make, since the buses would use common parts with the company?s trucks, and the customers were local governments. Starting in the 1950?s, the school bus business accounted for about 50% of Road King Trucks? revenues. The Transit Bus Opportunity Mr. Livingston arranged a meeting with the firm?s top management, as well as the chief design and manufacturing engineers to propose his new product. He presented an argument that more individuals in the United States and Canada would be willing to use public transportation than before, because people were becoming more environmentally conscious. Also, recent increases in fuel costs seemed to be long lasting. This was an opportunity to get people hooked on transit buses, as he put it. The proposal under consideration was for the introduction of a large, public transport bus. To distinguish Road King Trucks from other manufacturers, the proposal included details about the level of comfort, air-conditioning, efficiency, and quietness of operation that needed to be developed. Mr. Phillips and Mr. Lopez, the two engineers, reacted enthusiastically and quickly pointed out that the bus could be based on the company?s trucks. The frame currently used for building the trucks could be modified to accommodate buses at a relatively low cost. The marketing vice president, Mr. Chen, pointed out that a marketing analysis could be done quickly, and at a reasonable cost. At this point, Mr. Livingston charged the participants in the meeting to produce a financial plan for the development and production of a transit bus. Public Transportation The use of public transportation had declined steadily since the 1950?s. Most people were opting to use their personal vehicles for all of their transportation needs. Recently, however, most of the metropolitan areas in the United State and Canada, the target markets for the new bus, had become more and more congested; and parking, which was already very expensive, was becoming scarce. This combination of trends has renewed the public?s interest in good and reliable public transportation. Several municipalities have been campaigning to their residents and commuters that they should use public transportation for business commuting, and only use their cars for shopping and weekend activities. However, such campaigns need to be supported by making high quality public transportation available to the target riders. The Decision Three weeks after the initial meeting, the vice presidents presented the sales and cost forecasts shown in the attached exhibits. The information presented contains the cost of production, financing information, and warranty cost estimates. The proposals also contained two engine options for the engines: The Detroit engine, and the Marcus engine. The Detroit engine was more expensive to install, but had a lower warranty cost. The Marcus engine was less expensive to install, but had a higher warranty cost. This begged the question: Which engine should be used? Issues and Analyses Mr. Livingston noticed that there was a great deal of enthusiasm among the management group about the transit bus opportunity, but his cautious nature told him to also seek a more objective viewpoint. Consequently, he sought out you to analyze the proposed project and provide your recommendations directly to him. The issues he wants you to address in your analysis and report are the following: 1) How much importance should be given to the energy cost situation? 2) What are the project?s cash flows for the next twenty years? What assumptions did you use? 3) What is the company?s cost of capital? What is the appropriate discount factor (which may be different) for you to use in evaluating the bus project? 4) If you decide to go ahead with the project, which of the two engines should be used in the bus, and why? 5) Evaluate the quality of the project, by using appropriate capital budgeting techniques. 6) Would you recommend that Road King Trucks accept or reject the project? What are the key factors on which you base your recommendation? Your final report is due in Blackboard on Sunday November 6 at midnight.,Hey Rachel! I must also submit the exhibits so you will have the proper numbers to work with. Here is the same thing including the exhibits in the attached file. Thank you soo very much!,It must be under 5 pages so anywhere from 3-5 is fine. Did you receive the attachment? And what I was saying is that I choose to extend the date because there was no other option but it is due by midnight tonight...,Oh wait, nevermind. It's due by november 6th so take your time!! I will attached the other supportive files. There are three of them.,Here is the other attachment...,And here is the last attachment. All together there should be 4: 500D Road King Case Introduction 500D Road_King_Trucks_Case Analysis 500D Road_King_Trucks_Project_Deliverables BUS 500D Rubric,Updated message just received from the professor today: Chapters 9_10_11 Review File.xlsx Your RK project is for twenty years per the description, thus a net cash flow spreadsheet needs to be put together. You are the analyst here, there is no right or wrong answer. You have to make assumptions and then show your conclusions and recommendations. The chapters 9-10-11 show this process, also the problems and solutions I have given you in the Course Content section.
Question 2
9. DATA: Carewood makes an environmentally friendly artificial fireplace log. You have been asked to prepare the company?s master budget for the first quarter of the year 2013 and have been provided with the following: a. The 12/31/2012 balance sheet data follows: ASSETS Cash $ 4,330 Accounts Receivable 8,450 Direct Materials Inventory (2,178 pounds) 436 Finished Goods Inventory (1,200 logs) 2,808 Plant and Equipment $220,000 Less Accumulated Depreciation (56,000) 164,000 Total Assets $180,024 LIABILITIES AND STOCKHOLDER?S EQUITY Accounts Payable $ 1,109 Note Payable 20,000 Total Liabilities $ 21,109 Common Stock $100,000 Retained Earnings 58,915 158,915 Total Liabilities and Stockholder?s Equity $180,024 b. Each log requires the following standards for direct material and labor: ? 3.3 pounds of material mix at $.20 per lb ? 10 minutes of labor time per unit; direct labor averages $14.40 per hour Each finished log requires three minutes of machine time. Variable overhead is applied at the rate of $12.00 per hour of machine time. Annual fixed production overhead is budgeted at $46,800 (see breakdown below). Salaries $30,000 Insurance 1,800 Fixed portion of utilities 6,000 Depreciation 9,000 Total $46,800 Fixed overhead is incurred evenly throughout the year c. Expected sales in units for the first five months of 2013 are: January 6,000 February 9,000 March 6,500 April 5,900 May 5,100 Carewood grants no discounts, and all sales are on credit at $6.00 per log. The company?s collection pattern is 80 percent in the month of sale, 15 percent in the month following sale, and 5 percent in the second month following the sale. The Accounts Receivable balance in the balance sheet data represents amounts remaining due from November sales of $33,000 and December sales of $34,000. d. Carewood completes all production each day. The desired ending balance of Direct Materials Inventory is 10 percent of the amount needed to satisfy the next month?s production for finished goods. The desired ending balance in Finished Goods Inventory is 20 percent of the next month?s sales. e. Purchases of direct materials are paid 70 percent in the month of purchase and 30 percent in the month following the purchase. No discounts are taken. The note payable has a 12 percent interest rate, and the interest is paid at the end of each month. The $20,000 balance of the principal on the note is due on March 31, 2013. f. CareWood?s minimum cash balance desired is $4,000. The firm may only borrow at the beginning of a month and repay at the end of a month in $500 increments ($500, $1,000, $1,500 etc.). Principal should only be repaid in a month when excess cash exists. Interest on these short-term loans, if any, is payable monthly at a 14% rate. You may have to borrow money to meet your monthly interest obligations on any loans outstanding. g. Selling and Administrative expenses, paid as incurred, run $9,000 per month plus 1 percent of sales. Direct labor and overhead are paid as incurred. h. The company accrues income taxes at a 40 percent rate. A quarterly tax installment will be paid on April 15, 2013. Required: 9.Essay: What types of information do your budgets yield? Is cash flow adequate? Do sales need to be increased, costs reduced? Etc?.. ( 5 pts.)
Question 3
This assignment is based on the Case study (10 pages), which I will upload when the assignment will be accepted. This case deals with the decision to structure an overseas operation and how this decision is affected by a number of variables, which among others, include the bank internal resources and experience, tax considerations, and most importantly the host country's banking laws. In 1997, Citibank was still at an early stage of its China entry strategy. It was one of the strongest banks operating in the People's Republic of China, but as a foreign bank it only had limited market access. It was licensed to provide corporate banking services to foreign invested companies and to operate branches in only 3 of the 24 Chinese cities open to foreign banks. in order to grow beyond these three cities and to expand from corporate banking to the large and potentially lucrative domestic retail business, Citibank needed licenses from the central bank. Citibank's goal is to be one of the first banks to get those licenses. ?Although this is not a question and answer exercise, the questions 1. What were the reasons for China to open banking to?foreign banks? 2. What are Citibank's competitive advantages in?foreign markets? 3. What is Citibank's worldwide strategy? 4. Describe Citibank's Global Relationship Banking?strategy. 5. Describe Citibank's Global Consumer Finance strategy. 6. What is Citibank's preferred legal structure when?operating in foreign countries, and what was the?opinion of the Bank's executives in China concerning?Citibank's possible acquisition of a local financial?institution? 7. Describe the evolution of Citibank's presence in China?after 1940. 8. What was Citibank allowed to do in China in 1997? 9. In December 23, 1996 the People's Republic of China?Central Bank (PBOC) granted Citibank permission to?do local business, but subject to certain?restrictions. What were those restrictions? 10. What is the government of China's concern with?credit cards? 11. Situate yourself in 1997 to answer this question: Is?any possibility that the Chinese government will?allow Citibank to issue credit cards in China? 12. How could Citibank's executives ensure that Citibank?will maintain its "first mover" advantage? 13. How could Citibank's executives ensure that Citibank?would be among the first foreign banks to enter the?domestic market? 14. If the PBOC were to decide to open China's retail?market to other foreign banks before granting?licenses to Citibank, how could Citibank establish its?dominant position in this market?,There is no page or word limit. The main point is to answer ALL the questions in a reasonable way,I will attach pictures of the actual case study page by page,I just sent the whole case study in a zip format. Did you get it?,Now?,Now?,Have you received it?,Do you have an email to which I can send it, because I tried to attach it through this systmem but it doesn't go through.,Thank you!,Thank you very much! But what about question number 10 and 11?,I am still waiting for answers for questions 10 and 11.,There is no material that we was provided. Everything was given is the case study.,I attached the same case study,I attached the same case study,look forward for the left answers as soon as possible,Thank you, but it's already too late as the deadline has already passed. Thank you for the rest of the answers
Question 4
Allocation and proration of overhead. Tamden, Inc., prints custom marketing materials. The business was started January 1, 2010. The company uses a normal-costing system. It has two direct cost pools, materials and labor and one indirect cost pool, overhead. Overhead is charged to printing jobs on the basis of direct labor cost. The following information is available for 2010. *Budgeted direct labor costs $150,000 *Budgeted overhead costs $180,000 *Costs of actual material used $126,500 *Actual direct labor costs $148,750 *Actual overhead costs $176,000 There were two jobs in process on December 31, 2010: Job 11 and Job 12. Costs added to each job as of December 31 are as follows: Direct materials Direct Labor Job 11 $3,620 $4,500 Job 12 $6,830 $7,250 Tamden, Inc., has no finished goods inventories because all printing jobs are transferred to cost of goods sold when completed. 1. Compute the overhead allocation rate. 2. Calculate the balance in ending work in process and cost of goods sold before any adjustments for under- or overallocated overhead. 3. Calculate under- or overallocated overhead. 4. Calculate the ending balances in work in process and cost of goods sold if the under- or overallocated overhead amount is as follows: a. Written off to cost of goods sold b. Prorated using the ending balance (before proration) in cost of goods sold and work-in-process control accounts 5. Which of the methods in requirement 4 would you choose? Explain.
Question 5
(4) A firm can issue 20-year public debt at par with a 6% coupon in the domestic market. It can also issue 10% Eurobonds. Calculate APY for each alternative. Which offers the lower borrowing cost? (5) ABC is considering leasing a computer system that costs $1 million dollars new. The lease requires annual payment of $150,000 in arrears for 7 years. ABC?s tax rate is 40%. If it purchased the computer system, it could depreciate it to its residual value over 7 years. ABC?s cost of debt and WACC are 5% and 10% respectively. a. Calculate the NAL assuming a ZERO residual value. Should ABC lease? b. Calculate the NAL assuming a $50,000 residual value. Should ABC lease? (6) ABC is considering whether to lease a delivery truck. The cost of the truck is $20,000. ABC has proposed a 5-year lease that calls for annual payments of $6500 in advance. ABC?s tax rate is 40%. ABC could depreciate the truck to $5000 at the end of 5 years on a straight-line basis and claim a depreciation deduction. ABC?s cost of debt and WACC are 5% and 10% respectively. a. Calculate NAL. Should ABC lease the truck? b. Suppose ABC does not pay taxes. Calculate NAL. Should ABC lease the truck?
