Question 1
MANAGERIAL ACCOUNTING CASE - PREPARATION OF A MASTER BUDGET Point Value ? 70 points Required: Based on the following information, prepare the following budgets for each month and the quarter ending March 31, 2011: (Hint: First quarter consists of January, February and March.) ? Sales Budget, including a schedule of expected cash collections ? Production Budget (in units) ? Manufacturing Overhead Budget ? Selling and Administrative Expenses Budget ? Cash Budget (Note: Even though you are not required to prepare Direct Materials and Direct Labor budgets, direct materials and direct labor information is necessary to prepare the Cash Budget.) Information: 1. Sales forecast: January: 2,000 units; February: 1,700 units; March: 1,600 units; April: 1,500 units. The unit sales price is $16. All sales are on credit and collections are 40% in the month of sale and 60% the following month. Accounts receivable as of December 31, 2010 is $17,200 and this amount is expected to be collected in January 2011. 2. End of month inventory must equal 70% of next month?s sales. The inventory at the end of December 2010 was 1,400 units. 3. The following are the expected costs for direct materials, direct labor and manufacturing overhead: DM DL Overhead January $14,800 $6,300 $5,610 + $1.50 per unit produced February 8,600 5,700 $5,610 + $1.50 per unit produced March 8,400 5,300 $5,610 + $1.50 per unit produced A. Direct materials are paid 25% in the month incurred and 75% in the following month. Account payable for materials as of December 31, 2010 is $5,400; this amount will be paid in January 2011. B. Direct labor is paid in the month incurred. C. Overhead costs are paid in the month incurred. Fixed overhead includes depreciation of $1,500 per month. 4. Selling costs are sales commissions: $.30 per unit sold; shipping costs: $.14 per unit sold. Administrative costs per month are: salaries: $1,200; rent: $400; depreciation: $800. All costs are paid in month incurred. 5. The company plans to buy equipment costing $10,000 in January. 6. The cash balance as of December 31, 2010 is $10,200. The company borrows money only if the cash balance falls below $2,000 at the end of the month.
Question 2
Click the link above to submit your assignment. Assignment 2.1: The Public Needs to Know ? Draft Version Due Week 5 and worth 80 points Select one (1) of the scenarios listed below on which to focus your informative paper. Research the topic and include credible sources to support claims. Identify your purpose clearly, incorporate audience needs, establish a desired tone, and organize information and / or claims effectively. Your boss has asked you (a communication specialist) to write an informative white paper about the business of developing new drugs for cancer patients. The content will be turned into a brochure for the public describing the four (4) major issues: economic situation, special needs (e.g., health) of the population being served, process, and benefits of the program. She asked you to include two (2) visuals to illustrate the issues. The state school board chairperson has asked you (a consultant on health and wellness) to write an informative piece about the recent changes to the breakfast and lunch programs to improve nutrition and health. The content will be turned into a brochure describing the four (4) major issues: economic situation, special needs (e.g., health) of the population being served, process, and benefits of the program. He asked you to include two (2) visuals to illustrate the issues. The director of a large regional food pantry has asked you (a board member and volunteer for the organization) to write an informative piece about the organization?s programs. The content will be turned into a brochure for the public describing the four (4) major issues: economic situation, special needs (e.g., health) of the population being served, process, and benefits of the program. She asked you to include two (2) visuals to illustrate the issues. Write a three to four (3-4) page paper in which you: Provide a clear thesis statement. Describe the economic issues. Describe the special needs (e.g., health) of the population being served. Describe the process (decisions, steps) involved in the program. Explain the benefits of the program. Include two (2) visuals that illustrated two (2) different claims. Develop a coherently structured paper with an introduction, body, and conclusion. Provide three (3) relevant and credible sources to support claims. Your assignment must follow these formatting requirements: Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions. 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 page length. The specific course learning outcomes associated with this assignment are: Identify elements of visual and electronic resources and their uses in writing. Associate the features of audience, purpose, and text with various genres. Recognize the elements and correct use of a thesis statement. Recognize how to organize ideas with transitional words, phrases, and sentences. Incorporate relevant, correctly documented sources to substantiate claims. Apply the writing process to develop various writing genres. Write clearly and concisely about selected topics using proper writing mechanics. Use technology and information resources to research selected issues for this course. Grading for this assignment will be based on answer quality, logic/organization of the paper, and language and writing skills. Click here to access the rubric for this assignment.
Question 3
FIN 640, Midterm Exam: Each question 1 point. Date March 4, 2011 Due Date March 6, 2011 11:59 PM Please enter the answers in the attached answer sheet and then submit Maximum points 25. No negative marking. Good luck! Question 1: A important reason for firms to issue equity abroad is to: A) benefit from the lesser information about the firm possessed by foreign investors. B) increase the pool of available capital. C) obtain access to qualified directors. D) none of the above. Question 2: Interest rates paid by central banks across countries that are on the euro can be different due to different rates of default. A) True B) False Question 3: If interest rate parity exists, and the domestic nominal (riskless) rate of return increases by 1%, then ceteris paribus (that is other things kept equal) the futures price for the domestic currency should: A) fall by 1% B) rise by 1% C) remain unchanged D) fall by 1% if the country runs a trade deficit, rise by 1% if it runs a trade surplus. Question 4: Which economic theory supports trade between nations: A) Comparative Advantage B) Marginal Utility C) Economies of Scope D) None of the Above Question 5: Which of the following is not true with respect to spot market liquidity? A) The more willing buyers and sellers there are, the more liquid a market is. B) The spot markets for heavily traded currencies such as the Japanese yen are very liquid. C) A currency?s liquidity affects the ease with which an MNC can obtain or sell that currency. D) If a currency is illiquid, an MNC is typically able to quickly purchase that currency at a reasonable exchange rate. Question 6: Forward markets for currencies of developing countries are: A) prohibited. B) less liquid than markets for developed countries. C) more liquid than markets for developed countries. D) only available for use by government agencies. Question 7: If one nation experiences higher growth then ceteris paribus (other things equal) it current account balance should increase. A) True B) False Question 8: If one nation experiences higher growth leading to greater consumption of foreign goods, then ceteris paribus (other things equal) its currency should appreciate. A) True B) False Question 9: The spot rate for the Japanese Yen is currently Y120 to $1. ABC Bank holds Japanese government bonds. It expects that the Japanese Yen will depreciate against the US by an amount greater than given by IRP. It should: A) do nothing. B) enter into a forward contract where it will sell Yens for dollars. C) enter into a forward contract where it will sell dollars for Yens. D) enter into a swap where it will swap its Japanese government bonds for Japanese corporate bonds. Question 10: Suppose you have the following exchange rates (C$ is short for Canadian dollars): $1 equals C$ 0.95 C$ 1 equals Euro 0.7 $1 equals Euro 0.65 Then if you have dollars for triangular arbitrage you will: A) convert dollars to C$, then C$ to Euros, and Euros back to dollars. B) convert dollars to C$, then C$ to Euros, then Euros back to C$, and C$ back to dollars. C) convert dollars to C$, then C$ back to dollars. D) convert dollars to Euros, then Euros to C$, and C$ back to dollars. Information for questions 11 to 13: ABC Bank expects the C$ will appreciate against the dollar from $1.20 to $1.25 over the next 6 months. The annualized rates (that is the 6-month rate multiplied by 2) for ABC are: Lending Borrowing Dollars 4% 5% C$ 3% 4% ABC has the ability to borrow up to $100 M, or C$ 80 M. It can lend as much as it wishes. Question 11: ABC should borrow: A) $100 M B) C$80 M C) $50 M and C$41.66 M D) $30M and C$55 M Question 12: ABC should lend (note the currency it lends at can be different from the currency it borrowed as it can convert at the spot market): A) C$80 M B) $30 M and C$55 M C) C$83.33 M D) $96 M Question 13: The maximum profit ABC can make in the 6 month period (assume it does not have any money other than that provided by the borrowing capacity set in the question): A) $4.167 M B) $7.292 M C) $1.663 M D) $3.292 M Question 14: Suppose Brazilian inflation increased whereas US inflation decreased. Ceteris paribus this would lead to an increased demand for dollars. A) True B) False Question 15: Suppose Brazilian inflation increased whereas US inflation decreased. Ceteris paribus this would lead to an appreciation of the Brazilian Real against the dollar. A) True B) False Question 16: If you expect the Yen to appreciate then you should buy Yen call options. A) True B) False Question 17: Suppose the International Fisher Effect is true. The annual nominal (riskless) rates of return in US and Mexico are 4% and 3% respectively. The annual inflation rates in US and Mexico are 3% and 4.5% respectively. Then over a year we expect that against the peso: A) the dollar will appreciate by about 1% B) the dollar will depreciate by about 1% C) the dollar will appreciate by about 1.5% D) the dollar will depreciate by about 1.5% Question 18: You expect the euro to depreciate substantially. You would speculate by _______ euro call options or _______ euros forward in the forward exchange market. A) selling; selling B) selling; purchasing C) purchasing; purchasing D) purchasing; selling Question 19: The shorter the time to the expiration date for a currency, the _______ will be the premium of a call option, and the _______ will be the premium of a put option, other things equal. A) greater; greater B) greater; lower C) lower; lower D) lower; greater Question 20: A weak dollar is normally expected to cause: A) high unemployment and high inflation in the U.S. B) high unemployment and low inflation in the U.S. C) low unemployment and low inflation in the U.S. D) low unemployment and high inflation in the U.S. Question 21. A US firm has a foreign subsidiary. The risk that items like equity, assets etc. in the firm?s balance sheet may change in value is: A) Translation exposure B) Transaction exposure C) Currency exposure D) None of the above Question 22. A US firm has a foreign subsidiary. The risk to its cash flows from changes in exchange rates is: A) Translation exposure B) Transaction exposure C) Currency exposure D) None of the above Question 23: A call option on Euros has a strike price of $.68. The spot rate is Euro 1 for $.70. This call option is: A) in the money. B) out of the money. C) at the money. D) at a premium. Question 24. Given a home country and a foreign country, purchasing power parity (PPP) suggests that: A) a home currency will depreciate if the current home inflation rate exceeds the current foreign interest rate. B) a home currency will appreciate if the current home interest rate exceeds the current foreign interest rate. C) a home currency will appreciate if the current home inflation rate exceeds the current foreign inflation rate. D) a home currency will depreciate if the current home inflation rate exceeds the current foreign inflation rate. Question 25. Assume that the U.S. inflation rate is higher than the New Zealand inflation rate. This will cause U.S. consumers to _______ their imports from New Zealand and New Zealand consumers to _______ their imports from the U.S. According to purchasing power parity (PPP), this will results in a(n) _______ of the New Zealand dollar (NZ$). A) reduce; increase; appreciation B) increase; reduce; appreciation C) reduce; increase; depreciation D) reduce; increase; appreciation
Question 4
Glen and Michael are equal partners in Trout Enterprises, a calendar year partnership. During the year, Trout Enterprises had gross income of $400,000 and operating expenses of $220,000. In addition, the partnership sold land that had been held for investment purposes for a long-term capital gain of $100,000. During the year, Glen withdrew $60,000 from the partnership, and Michael withdrew $60,000. Discuss the impact of this information on the taxable income of Trout, Glen, and Michael. Answer a. Trout pays tax on $0 income, Glen?s taxable income increases by $60,000, and Michael?s taxable income increases by $60,000. b. Trout pays tax on $280,000 income, Glen?s taxable income increases by $60,000, and Michael?s taxable income increases by $60,000. c. Trout pays tax on $0 income, Glen?s taxable income increases by $200,000, and Michael?s taxable income increases by $200,000. d. Trout pays tax on $0 income, Glen?s taxable income increases by $140,000, and Michael?s taxable income increases by $140,000. e. None of the above. Ted is the sole shareholder of a C corporation, and Sue owns a sole proprietorship. Both businesses were started in 2010, and each business sustained a $5,000 net capital loss for the year. Which of the following statements is correct? Answer a. Ted?s corporation can deduct the $5,000 capital loss in 2010. b. Ted?s corporation can deduct $3,000 of the capital loss in 2010. c. Sue can carry the capital loss back three years and forward five years. d. Sue can deduct the $5,000 capital loss against ordinary income in 2010. e. None of the above. Which of the following statements is incorrect about the check-the-box Regulations? Answer a. A limited liability company with more than one owner can elect to be taxed as a corporation. b. If a limited liability company with one owner does not make an election, the entity is taxed as a sole proprietorship. c. If a limited liability company with more than one owner does not make an election, the entity is taxed as a partnership. d. A limited liability company with one owner can elect to be taxed as a corporation. e. An entity with more than one owner and formed as a corporation can elect to be taxed as a partnership. Eileen transfers property worth $200,000 (basis of $60,000) to Goldfinch Corporation. In return, she receives 80% of the stock in Goldfinch Corporation (fair market value of $180,000) and a long-term note (fair market value of $20,000) executed by Goldfinch and made payable to Eileen. Eileen recognizes gain on the transfer of: Answer a. $0. b. $20,000. c. $60,000. d. $140,000. e. None of the above. Kevin and Nicole form Indigo Corporation with the following transfers: inventory from Kevin (basis of $360,000 and fair market value of $400,000) and improved real estate from Nicole (basis of $320,000 and fair market value of $375,000). Nicole, an accountant, agrees to contribute her services (worth $25,000) in organizing Indigo. The corporation?s stock is distributed equally to Kevin and Nicole. As a result of these transfers: Answer a. Indigo can deduct $25,000 as a business expense. b. Nicole has a recognized gain of $55,000 on the transfer of the real estate. c. Indigo has a basis of $360,000 in the inventory. d. Indigo has a basis of $375,000 in the real estate. e. None of the above.,i have more questions. will you be able to answer 10 more? i need it in an hour.,are you there?,i will pay more but im not sure if this is going to work. please anyone?
Question 5
Hi, need help on these questions: 1a) Cypress Corporation had net income of $40,000 this year. The marginal tax rate is 40% and the dividend payout ratio is 30%. Cypress bonds currently sell at 95 with a 20 year maturity and an annual coupon rate of 7%. The last dividend paid on Cypress common stock was $0.90. Cypress common stock currently sells for $8.59. The expected growth rate is 5%. If Cypress issues new common stock the flotation cost will be 10%. Cypress has determined its optimal capital structure is 30% debt and 70% equity. What is the weighted average cost of capital for Cypress? What is the significance of this number? 1b) What would happen to Cypress?s WACC if they change to a debt structure of 70% debt and 30% equity? 4) Based on the following current information, what is the value of a share of common stock in Cypress Corporation? After-tax operating income is $500 million Depreciation expense is $100 million Capital expenditures are $200 million No change in net working capital Free cash flow is expected to grow by 6% per year Cost of equity is 14% WACC is 10% Market value of debt is $3 billion The company has 200 million shares of common stock outstanding 5) Determine the current dividend policy utilized by Apple Computer. How does this compare to prior dividend policies of Apple? 6) If the efficient market hypothesis (EMH) is true in the semi-strong form. Would reading The Wall Street Journal daily allow you to earn a return greater than the market averages? Why or why not? 7) Cypress Corporation sells watches for $25 each. Fixed costs are $140,000 for production of 30,000 or less watches. Variable costs are $15 per unit. a) What is the breakeven point for Cypress? b) Explain how you would reduce the breakeven point if you were the CEO of General Motors? 8 In problem 1a if the current beta of Cypress is 1.2, what would be the unlevered beta using the Hamada Equation assuming a 40% tax rate? 10) Utilizing the extended DuPont equation evaluate Microsoft based on the most current financial statements. 20) What is the estimated EVA of Berkshire Hathaway based on the most current financial statements?
