Question 1
Last year Hamdi Corp. had sales of $500,000, operating costs of $450,000, and year-end assets of $350,000. The debt-to-total-assets ratio was 17%, the interest rate on the debt was 7.5%, and the firm's tax rate was 35%. The new CFO wants to see how the ROE would have been affected if the firm had used a 50% debt ratio. Assume that sales, operating costs, total assets, and the tax rate would not be affected, but the interest rate would rise to 8.0%. By how much would the ROE change in response to the change in the capital structure? 3.79% 3.69% 3.18% 3.53% 2.48% 20. What's the present value of a 4-year ordinary annuity of $2,250 per year plus an additional $2,950 at the end of Year 4 if the interest rate is 5%? $11,133.74 $8,740.50 $10,405.36 $8,532.40 $12,590.49 Last year Harrington Inc. had sales of $325,000 and a net income of $19,000, and its year-end assets were $250,000. The firm's total-debt-to-total-assets ratio was 67.5%. Based on the DuPont equation, what was the ROE? 21.98% 18.94% 23.38% 22.68% 22.22% 17. A new firm is developing its business plan. It will require $635,000 of assets, and it projects $450,000 of sales and $355,000 of operating costs for the first year. Management is reasonably sure of these numbers because of contracts with its customers and suppliers. It can borrow at a rate of 7.5%, but the bank requires it to have a TIE of at least 4.0, and if the TIE falls below this level the bank will call in the loan and the firm will go bankrupt. What is the maximum debt ratio the firm can use? (Hint: Find the maximum dollars of interest, then the debt that produces that interest, and then the related debt ratio.) 50.87% 59.34% 49.87% 62.34% 42.89% Last year Kruse Corp had $355,000 of assets, $403,000 of sales, $28,250 of net income, and a debt-to-total-assets ratio of 39%. The new CFO believes the firm has excessive fixed assets and inventory that could be sold, enabling it to reduce its total assets to $252,500. Sales, costs, and net income would not be affected, and the firm would maintain the same debt ratio (but with less total debt). By how much would the reduction in assets improve the ROE? 5.67% 5.30% 4.40% 4.18% 5.98% Last year Jandik Corp. had $325,000 of assets, $18,750 of net income, and a debt-to-total-assets ratio of 37%. Now suppose the new CFO convinces the president to increase the debt ratio to 48%. Sales and total assets will not be affected, but interest expenses would increase. However, the CFO believes that better cost controls would be sufficient to offset the higher interest expense and thus keep net income unchanged. By how much would the change in the capital structure improve the ROE? 2.19% 1.67% 1.57% 1.94% 2.17% Quigley Inc. is considering two financial plans for the coming year. Management expects sales to be $300,000, operating costs to be $265,000, assets to be $200,000, and its tax rate to be 35%. Under Plan A it would use 25% debt and 75% common equity. The interest rate on the debt would be 8.8%, but under a contract with existing bondholders the TIE ratio would have to be maintained at or above 3.2. Under Plan B, the maximum debt that met the TIE constraint would be employed. Assuming that sales, operating costs, assets, the interest rate, and the tax rate would all remain constant, by how much would the ROE change in response to the change in the capital structure? 7.10% 7.40% 8.21% 8.73% 7.25% Your aunt has $350,000 invested at 5.5%, and she now wants to retire. She wants to withdraw $45,000 at the beginning of each year, beginning immediately. She also wants to have $50,000 left to give you when she ceases to withdraw funds from the account. For how many years can she make the $45,000 withdrawals and still have $50,000 left in the end? 9.47 10.76 13.35 11.41 12.38,Just wanted to let you know I have 40min before I have to submit so please send what you have by then. Thanks
Question 2
Go Blue products, a rapidly growing distribution of home gardening equipment, is formulating its plans for 2013. Daniel Goldschlager, the firms marketing director, has completed the following sales forecast. Month Sales January 900,000 February 1,000,000 March 900,000 April 1,150,000 May 1,250,000 June 1,400,000 Month Sales July 1,500,000 August 1,500,000 September 1,600,000 October 1,600,000 November 1,500,000 December 1,700,000 Angela Blue, an accountant in the Planning and Budgeting Department, is responsible for preparing the cash flow projection. She has gathered the following information. - All sales are made on credit. - Go Blue?s excellent record in account receivable is expected to continue, with 60 percent of the billings collected in the month of the sales and the remaining 40 percent collected two months after the sales. - Cost of goods sold, which is Go Blue?s largest expense, is estimated to equal 40 percent of sales dollars. Seventy percent of inventory is purchased one month prior to the sales and 30 percent during the month of the sales. For example, in April, 30 percent of April cost of goods sold is purchased and 70 percent of May cost of goods is purchased. - All purchases are made on account. Historically, 75 percent of accounts payable have been paid during the month of purchase and the remaining 25 percent in the month following purchase. - Hourly wages and fringe benefits, estimated to be 30 percent of the current month?s sales, are paid in the month incurred. - General and administrative expenses are projected to be 1,550,000 for the year. A breakdown of the expense follows. All expenditures are paid monthly throughout the year, with the exception of property taxes, which are paid in four equal installments at the end of each quarter. Salaries and fringe benefits 324,000 Advertising 372,000 Property Taxes 136,000 Insurance 192,000 Utilities 180,000 Depreciation 346,000 Total 1,550,000 Operating income for the first quarter of 2012 is projected to be 320,000. Go Blue is subject to a 40 percent tax rate. The company pays 100 percent of its estimated taxes in the month following the end of each quarter. Go Blue maintains a minimum cash balance of 50,000. If the cash is less than 50,000 at the end of the month, the company borrows against its 12 percent line of credit in order to maintain its balance. All borrowings are made at the beginning of the month and all repayments are made at the end of the month (in increments of $1,000). Accrued interest is paid in full with each principle repayment. The projected cash balance on April 1, 2013 is $50,000. Required: Prepare the cash budget for the second quarter (April, May and June).
Question 3
E14-13 Horizontal analysis-income statement Data for Verifine Designs, Inc. follow: Verifine Designs INC- Comparative Income Statement -Years ended December 31, 2011 and 2010 2011 2010 Net sales revenue $428,950 $371,000 Expenses: Cost of goods sold $203,850 $189,350 Selling and general expenses 99,350 93,000 Other expense 6,750 5,000 Total expenses 309,950 287,350 Cash and cash equivalents $119,000 $83,650 Requirements: 1. Prepare a horizontal analysis of the comparative income statement of Verifine Designs Ince. Round percentage changes to the nearest one-tenth percent (three decimal places) 2. Why did 2011 net income increase by a higher percentage than net sales revenue? E14-15 Vertical analysis of a balance sheet- Eta Graphics has the following data: Eta Graphics Inc.- Balance sheet- December 31,2010 Assets Total currents assets $41,870 Property,plant and equipment, net 206,870 Other assets 34,870 Total assets $283,610 Liabilities Total current liabilities $47,870 Long term debt 107,870 Total liabilities 155,740 Stockholder?s Equity Total stockholders equity 127,870 Total liabilities and stockholders equity $283,610 Requirement: 1. Perform a vertical analysis of Eta?s balance sheet. P14-23A Common size statements, analysis of profitability and financial position and comparison with the industry The Russell Department s Stores, Inc. chief executive officer has asked you to compare the company?s profit performance and financial position with the average for the industry. The CEO has given you the company?s income statement and balance sheet as well as the industry average data for retailers. Russell Department Stores Inc. Income Statement compared with Industry Average ?Year ended December 31, 2010 Russell Industry Average Net Sales $777,000 100.0% Cost of goods sold 523,698 65.8 Gross Profit 253,302 34.2 Operating expenses 162,393 19.7 Operating income 90,909 14.5 Other expenses 7,770 0.4 Net Income $83,139 14.1% Russell Department Stores Inc. Balance Sheet compared with Industry Average ?December 31, 2010 Russell Industry Average Current Assets $3330,750 70.9% Fixed Assets, net 123,480 23.6 Intangible assets, net 9,800 0.8 Other assets 25,970 4.7 Total assets $490,000 100.0% Current liabilities $227,360 48.1% Long term liabilities 111,720 16.6 Stockholders equity 150,920 35.3 Total Liabilites $490,000 100.0% Requirements: 1. Prepare a common-size income statement and balance sheet for Russell. The first column of each statement should present Russell?s common-size statement and the second column, the industry averages. 2. For the profitability analysis, compute Russell?s (a) ration of gross profit to net sales, (b0 ration of operating income to net sales, and (c) ratio of net income to net sales. Compare these figures with the industry averages. Is Russells profit performance better or worse than the industry average? 3. For the analysis of financial position, compute Russells (a) ration of current assets to total assets and (b)ratio of stockholders equity to total assets. Compare these ratios with the industry averages. Is Russells financial position better or worse than the industry averages?
Question 4
Hello!! Could you help my assaingment! I am international student... ACC111 P8-32A Regents supply completed the following transactions during 2008 and 2009 2008 Dec 31 Estimated that Uncollectible accounts expense fpr the year was 3/4 of 1% on credit sales of $400,000 and recorded that amount. 31 Made the closing entry for Uncollectible accounts Expense 2009 Jan 17 Sold inventory to abe Gomez, $600 on account. Ignore cost of goods sold June 29 Wrote off the Abe Gomez account as uncollectible after repeated dfforts to collect from him Aug 6 Received $200 from Abe Gomez, along with a letter stating his intention to pay within 30days. Reinstated his account in full Sept 4 Teceived the balance due from Abe Gomez Dec 31 Made a compound entry to write off the following accounts as uncollectible: Bernard Clark, $700: marie Montrose, $300; and Terry Forman, $600 Dec 31 Estimated that Uncollectible Accounts Expense for the year was 2/3 of 1% on credit sales of $480,000 and recorded that amount as expense Dec 31 Made the closing entry for Uncollectible Accounts expense. Requirements 1. Open ledger accounts for allowance for Uncollectible accounts and uncollectible accounts expense. These accounts have beginning balances of $0 2. Record the transactions in the journal and post to the two ledger accounts; remember to update the account balanceds but ignore posting references 3. The December 31 2009, balance of accounts receivable would be reported on the balance sheet at that date. Please help me my assaigment!,Hello!! Michaell! I am not sure how I can using this site. I hope you will have my answers. Thank you Just let me know when you done.,Hello! Sir! Im just wondering when I get the answer... and I wish you can answer the question on my attach file Thank you and sorry sir!
Question 5
DUE DATE: JAN 11, 2013 BUS 499 (Business Administration Capstone) Please do not take too long to confirm, some professors take too long and this is not fair. I will really appreciate your prompt confirmation! Please READ instructions very careful, since unfortunately a few professors do not read it carefully, then ask what is already explained. Note: I just attached 1 scan right here, the remaining attachment (scan), which will be the second one will be attach it in a bit later, because I cannot attach more than one on this posting. Please use short "in text citations" to support your own words/answer. And enclosed with " ". This way I can know where the "in text citations" START and where it END. Also, if applicable please include page # (pg.) or paragraph # (para.) Example of "in text citation" "The evidence is a basic as the terra preta do indio, or India Black Earth" (Glick, 2007, para. 4) Then, Please include a Reference page, all info needs to be included: For example: If applicable, page #, paragraph #, volume #, etc. Example of Reference: Glick, D. (2007, February 10). Bio-char sequestration in terrestrial ecosystems?A review [Electronic mailing list message]. Retrieved from http://bioenergylists.org/nwesgrouparchive/terrapeta_bioenergylists. org/2007-February/00023.html PLAGIARISM is NOT accepted; please check for plagiarism for free in Grammarly.com, or any plagiarism checker you might have. http://www.grammarly.com/?q=plagiarism&gclid=CJXvn8jzzrMCFQeDnQoduBEAPw Assignment 1: Strategic Management and Strategic Competitiveness (Attached) Write four to six page paper (Cover Page and Reference page are NOT included in the required assignment page length. RUBRIC (Attached): Grading for this assignment will be based on answer quality, logic/organization of the paper, and language and writing skills, using the following rubric. (Which is attached).
