In-depth research and analysis needs to be conducted on other companies that have created similar successful programs. They need to determine what the breakeven point will be, and when these new products will start generating a profit and then make the decision on whether or not it’s worth the investment. Issue 5 Lack of planning CanGo is in rapid development, but at the same time lacks of any sort of planning. CanGo's management team cannot seem to reach a viable solution for the future development of the company. Recommendation 5 CanGo needs to make a comprehensive analysis and then decide on a long-term development plan.
As a C-corporation the business, not the owner, would be held liable for any financial damages. Any accidents involving employees or customers would be the responsibility of the corporation to settle. Financially speaking incorporating is the best option because as a sole proprietorship the owner is currently paying a much higher tax rate versus the corporate tax rate. With the tax code being different for corporations there is better profit retention and security. The client also mentioned the issue of partnership and the selling of stock in order to expand the company.
There have been many controversies regarding the ethicality of gift and estate taxes when an individual has paid taxes all of their life. The argument begs the question, why should one’s estate and gifts be taxed when this money was already taxed at one point in their life? It is essentially a double taxation. Because “corporate and individual income taxes constitute the lion's share of total tax revenues” (Lovinger, 2012), how much more should the government be sucking out of its people? The estate tax began in 1916 with the gift tax following in 1924.
2) The sales budget calculates how much the company will spend to produce the required number of units. The president should do further consideration in terms of capital and labor costs. Does company have an adequate capital to produce the required number of units? And if the answer is no, they should look for other alternatives such as borrowing and others. 3) The sales budget is to estimate the profitability.
What type of inventory control system does the supplier use? We expect manufacturing of the 313 to be long term, therefore, we must also ask the supplier if our volume increases do they have the capacity to expand their inventory without delay? As you know, quality as well as appearance will be everything to the consumer, as well as ease of use and function. Of course, we will want to approve any design before going to manufacture. Will the supplier have tools to allow management to view the design of the product supplied to us as it would be manufactured?
Brief Statement The constant hurdle rate has been taking some heat from investors and has been addressed by Victor Yossarian. As part of the company’s responsibility, we are moving forward and evaluating the firm in its current state. The analysis taking place will provide arguments for using a constant hurdle rate versus segment risk-adjusted hurdle rates. The goal of the evaluation is to use the method that will benefit the term in the long-run and provide a better project assessment for future forecasts. The Firm’s Current State Teletech has been using a single corporate-wide hurdle rate to assess projects, allocate funds, and as the discount rate.
Like the partnerships the S-corporations basically have no federal income taxes. S-corporations owners are taxed on their portion of earnings. The popularity of S-corporations fluctuate with the income tax law. Sometimes the corporation taxes are more than the individual and vice versa. Some of the similarities to a closely held corporation is each shareholder's liability is limited to the amount of their investment.
This stage is used to help realise if the current financial position is likely to lead to achieving the goals you set out – this can be done through research of seeking out professional advice. The next stage is Decide – this is where you decide on your action points to achieve your goals. This can be done through deciding to use financial products to achieve your goals, setting budget to decrease expenditures or exploring increasing income or holding back on planned expenditures. Stage 3, Act, is the implementation stage. This is putting your action points from the Decide stage into action to achieve the goals laid out in the assess stage – whether it is shopping around for the best value financial products, or looking for ways to increase your income.
Question B Compare and Contrast Managerial Accounting and Financial Accounting. Be sure to discuss how managerial accounting is useful for providing information for at least one of the following management functions:
The management of the company has decided to introduce changes to the business processes. The business process of the company would be enhanced through the use of latest technology. The goal of the management is to increase the sales revenue for the company by focusing more on the customer relationship management initiatives. Furthermore, the company also wants to analyze the analytical customer relationship management program. However, the final decision for the implementation of this analytical CRM project depends on the return on investment and the adequate payback period.