They expect that the extra tables will add between $2,000 and $5,000 to the restaurant’s monthly revenue. The bank is willing to let the business have an intermediate-term loan of $50,000 for five years, at an interest rate of 6.5 percent. Calculate the monthly payment, and explain whether taking this loan is a smart business decision.
What volume is required to provide a pretax profit of $100,000? A pretax profit of $200,000? (100 X vol) – (25 X vol) – 500,000=100,000 (75 X vol) – 500,000 = 100,000 75 X vol – 600,000/75 = 8,000 Total volume = 8,000 d. Sketch out a CVP analysis graph depicting the base case situation e. Now assume that the practice contracts with one HMO, and the plan proposes a 20 percent discount from charges. Redo questions a, b, c, d, under these condition. 2.
It will be depreciated under MACRS using a 5-year recovery period. At the end of 5 years, the machine can be sold to net $400,000 before taxes. If this machine is acquired, it is anticipated that the following current account changes would result. Cash + $25,000 Accounts Receivable + 120,000 Inventories - 20,000 Accounts Payable + 35,000 Press B – This press is not as sophisticated as press A. It costs $640,000 and requires $20,000 in
SHUZWORLD MEMORANDUM TO: Alistair Wu, Operating Director FROM: SUBJECT: Recommendation – Production and Assembly Line DATE: CC: Cynthia Crowninshield, Hetty Tarbox, Catherine Pang, Dieter Handel A. Shuzworld Plant Workflow Recommendation Management should re-organize the production process to five work cells with suitable tasks in each work cell to produce the desired work boot. A1. Justification Using Assembly Line Balancing the 8 tasks can be organized into 5 work cells. The cycle time for the longest task is 10 minutes with several tasks taking less than 5 minutes there is a lot of idle time, which equals inefficient operations. Looking at the assembly tasks, tasks B & C can be combined into a work cell as well as tasks E, F, and G combined into a work cell.
On the day the exchange was effected, the market value of the shares was $20 (Bloomberg).If the stock price were to rise to $40 after approval or decrease to $16 when FDA disapproved, using Binomial model, with current interest rates of 5.55%, we calculated the value of each call option—$3.39(Table 1). In comparison, we used the Black-Scholes model to value these call spreads. Given their
This reduces the carrying costs of the inventory that is ordered as well as insuring that unused items are not held from month to month. A third way to increase working capital is to realign the billing and payment schedules for the company. Currently products are invoiced to customers at the end of the month with terms of net30. Suppliers invoice the company at the end of the month with terms of net15. This disparity of terms can impact working capital as money flows out in the middle of the month but does not flow in until the end of the month.
Ignoring taxes, the correct opportunity cost for this machine in capital budgeting decisions is: A. $75,000 B. $25,000 C. $20,000 D. $5,000 4. What is the amount of the operating cash flow for a firm with $500,000 profit before tax, $100,000 depreciation expense, and a 35% marginal tax rate? A.
For simplification, 5-year-lived projects with 5 years of cash inflows are typically used throughout this chapter. Projects with usable lives equal to the number of years of cash inflows are also included in the end-of-chapter problems. It is important to recall from Chapter 4 that under the Tax Reform Act of 1986, MACRS depreciation results in n 1 years of depreciation for an n-year class asset. This means that in actual practice projects will typically have at least one year of cash flow
Cost, Volume, and Profit Formulas There are five components of CVP (cost-volume-profit) analysis; 1. volume or level of activity 2. unit selling prices 3. variable cost per unit 4. total fixed costs 5. sales mix Each component are import to the CVP, volume or level of activity can be explain as sales of a product or the number of units sold. Unit selling prices is the amount the product is sold. An example of this is a department store is selling two ties for $20 dollars, then the unit price of each tie is $10 dollars. The variable cost per unit is how much does it really take to make a product. Such as the tie is selling for ten dollars per unit but it only cost two dollars in materials to make.
The price of clothing is $30 and the price of food is $5. The pairs of clothing and food that are in the Ted's choice set include _____ units of clothing and _______ units of food. A) 20; 50 B) 10; 60 C) 10; 125 D) 0; 200 Answer: B Diff: 2 Type: A 3) Jane has $500 a week to spend on food (f) and clothing (c). The price of food is $10 and the price of clothing is $25. What is the equation for Jane's budget constraint?