Financial Analysis * The tax rate is approximately 30% 5.618.8=29.79% 5.418.1=29.83% 5.418=30% * Based on the industry average, a sports store of similar size should be making around $21000 or 67% more profitable than Rhodes’ store. * Assuming the lots are of the same size and bear the same tax burden, if the unused lot is sold off property taxes would be reduced by $6000 at the 2008 rate. All else being equal, this would increase net profit by 6000×0.30=$1800, for a total of $14400. Profit as a percentage of sales would increase from 2.1% to 2.4%. * Of the $18400 Rhodes made in mortgage payments last year, $8000 was interest.
After adding $15,300 to the $15,000 in savings, the cash flow for year 2 would equal $30,300. For year 3, the depreciation expense would equal $85,000 * .15, or $12,750. The tax on the year 3 deprecation would then be $12,750 * .40, which equals $5,100. After adding $5,100 to the $15,000 in savings, the cash flow for year 3 would equal
Because the company is interested in increasing production at Shanghai from 1,300 units to 2,800 units, it is recommended that the distribution patter be altered. Instead, 1500 units should be sent from Shanghai to Warehouse 2. Shuzworld H should transfer 300 units to Warehouse 1, and 1,800 units to Warehouse 3, totaling 2100 units. Twenty-two hundread units should still be moved from Shuzworld F to Warehouse 1. Although the supply increased by 1,500 units, this revised distribution pattern would cost the company only $13,400.
What amount should Ruiz record on March 1, 2010 as paid-in capital from stock warrants? (Points : 4) $28,800 $33,600 $41,600 $40,000 3. (TCO A) On January 1, 2010, Trent Company granted Dick Williams, an employee, an option to buy 100 shares of Trent Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $900. Williams exercised his option on September 1, 2010, and sold his 100 shares on December 1, 2010.
d) The equilibrium interest rate increases to bring desired investment into equilibrium with the reduced quantity of national saving. e) The equilibrium quantity of investment is reduced via the increase in the interest rate by an amount equal to the increase in government spending. Question 5 (15 marks) a) capital is added. No, MPK does not diminish because it does not decline as more is also acceptable. b) L = 100: L = 110: L = 120: 0. .
Shuzworld needs to make a decision on which choice would be more economical: Refurbishing or reconditioning the equipment that is already being used, possibly buying new equipment, or possibly outsourcing the products to China. The cost of reconditioning is fixed at $50,000. On top of that there is a variable cost that is $1000 per every 1,000 shoes that are being produced. If brand new equipment is bought the fixed cost sits at $200,000 with an added variable cost which is $500 for each 1,000 units. If the choice of outsourcing is chosen then there are not any fixed costs.
In order to recondition the existing equipment at the Shanghai facility, the company will incur a fixed cost of $50,000 and a variable cost of $1,000 for the production of 1,000 sneakers. If the company decides to buy new equipment for the Shanghai facility, it will cost Shuzworld $200,000 in fixed cost and $500 in variable costs for every 1,000 shoes produced. If Shuzworld choses to outsource production, the company will have zero fixed costs and a variable cost of $3,000 for every 1,000 shoes produced (MindEdge, 2014).
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.
Then Shuzworld H is shipping 500 units to warehouse 1 in addition to 1800 units to warehouse 3. Shuzworld F will ship 2200 units to warehouse 1. The excess 1500 is shipped to a Dummy destination as well as the Shanghi plant shipping 200 units to the dummy plant. When there was an increase in supply over demand the Dummy destination was created to ship the extra units. There is no cost attached to shipping to the dummy destination at this time.
If production is kept the same, the company is predicted to sell every unit produced which would avoid a stockpile of inventory and also safeguarding an extra 5,000,000 units in ending inventory in case sales go above 30,000,000. In the end, B.E. Company’s net income would increase by a substantial amount due to an increase in sales rather than an increase in ending