Big Reels Ltd Is Well Known For Their Marlin Reels Throughout The Fishing Community
Big Reels Ltd is well known for their Marlin reels throughout the fishing community as one of the finest manufacturers of fishing gear . The increased competition is really impacting the profitability of the Marlin reel. Like all products they manufacture, the Marlin reel must return a certain profit to stay in the product range. From the following information you have been asked to calculate the target sales volume units to cover the fixed costs and required profit (rounded to the nearest whole unit) for the Marlin reel to stay in production. You are provided with the following financial information for this particular product : Average Selling Price per unit $ = 426 Variable Cost per unit $ = 322 Fixed Costs $ = 35,388 Required Profit $ = 39,418
QUESTION 2 (30 Marks) 2.1 As The Director Of A Firm’s Capital Budgeting Department,
QUESTION 2 (30 marks) 2.1 As the director of a firm’s capital budgeting department, you have been asked to evaluate a project. After collecting information from various sources, you have determined the following: The firm’s preference share pays a constant annual dividend of R2.25 and is currently selling for R20. The firm is expected to pay an ordinary share dividend of R3 in one year, with anticipated growth of 2% each year thereafter. Currently, the ordinary share is selling at a price of R23.75. The firm has 8-year bonds outstanding with a coupon rate of 8.75%, paid annually. The bonds are currently selling at par. The firm is currently being financed with R10 000 000 debt, R20 000 000 of ordinary equity, and R5 000 000 preference shares. The project requires the use of equipment valued at R6 200 000.This is the replacement project The equipment currently has a book value of R3 000 000 with two years of straight-line depreciation (to zero) remaining (R1 500 000 each year). You anticipate that the equipment can be sold in three years for R2 100 000. Anticipated sales are 1 000 000 units per year based on a sale price of R11 per unit. The cost of producing each unit is R8.50. If the project is accepted, the firm will need to hire an additional manager with an annual salary of R80 000. Total research (information gathering for project analysis) expenses to date are R26 000. The firm’s marginal tax rate is 40%. 2.1.1 Calculate the net present value of this project and the internal rate of return. Should the project be accepted? (25) 2.2 In the context of capital budgeting, what is an opportunity cost? Provide an example of an opportunity cost. (2) 2.3 ‘Since depreciation is a non-cash expense, we should ignore its effects when evaluating projects.’ Is this statement true? Please elaborate. (3)
Answer Options (Drop Down Menus) Same Answer Options For The Second Row Drop Down
Answer options (Drop down menus) same answer options for the second row drop down menu
In A Cost-of-Quality (COQ) Reporting Framework, The “cost Of Nonconformance” Includes: Select One: A.
In a Cost-of-Quality (COQ) reporting framework, the “cost of nonconformance” includes: Select one: a. Prevention costs and appraisal costs b. Internal failure costs and external failure costs c. Prevention costs and internal failure costs d. Appraisal costs, internal failure costs, and external failure costs e. Prevention costs and external failure costs The capital budgeting decision technique that reflects the time value of money and is calculated as the present value of the future after-tax cash inflows by the initial cash outlay for the investment is called the: Select one: a. Net present value (NPV) method. b. Capital rationing method. c. Average accounting rate of return (ARR) method. d. Profitability index (PI) method. e. Present value payback method 35.Methods for directly valuing a firm include: Earnings Multiple Discounted Cash Flow Financial Ratios A) Yes Yes Yes B) No Yes Yes C) No No Yes D) Yes Yes No E) Yes No Yes Select one: a. Option A b. Option B c. Option C d. Option D e. Option E 36. Roncy Manufacturing uses enhanced powder plastics (EPP) to manufacture a high-pressure board, Dura-Plastic. Information concerning its operation in June was as follows: Master Budget units of Dura-Plastic to manufacture 8,000 Units of Dura-Plastic actually manufactured 9,000 Budgeted amount of EPP to purchase 70,000 oz. EPP material actually purchased 76,000 oz. EPP material actually used in production 72,000 oz. standard cost of EPP actually used in production $478,800 standard quantity of EPP per unit of Dura-Plastic 7.5 oz. Cost of EPP purchased $574,560 The direct materials usage (efficiency) variance for June was: Select one: a. $13,300 unfavorable b. $26,600 unfavorable c. $29,925 unfavorable d. $34,020 unfavorable
The Trial Balance Of Liberty Limited Includes The Following Accounts And Amounts As At
The trial balance of Liberty Limited includes the following accounts and amounts as at 30 June 2019: Additional information: None of the long service leave has been paid. It is not deductible for tax purposes until it is paid. All salaries and wages have been paid as at year end and are deductible for tax purposes. Only rent paid is allowed as a tax deduction. Amounts received from sales, including those on credit terms, are taxed at the time the sale is made. Tax deduction for bad debts is allowed only when the amount is written off as bad debt. Revenue received in advance was taxed on a cash basis at the time of receipt. Property, plant and equipment is depreciated on a straight-line basis over five years, after which time, it is not expected to have any residual value. For tax purposes, it can be fully written off over three years. Tax rate is 28%. Required: Prepare journal entries to account for income tax for Liberty Limited for the year ended 30 June 2019 in accordance with the relevant accounting standards. New Zealand standards has to be used (NZ IAS 12)
With Locations Ranging From The USA To China The Grand 58 Hotel Chain Is
With locations ranging from the USA to China the grand 58 hotel chain is known for its indulgent luxury and sumptuous surroundings. This aura of old world elegance stands in stark contrast to its rather heavy emphasis. Yet it is this very approach that makes it possible for the Ritz Carlton to offer the legendary grandeur all guests expect during their stay A hotel’s performance is the responsibility of the general manager and controller at each location worldwide. Local forecasts and budgets are prepared annually and are the basis of subsequent performance evaluations. Preparation of the annual budget begins with the sales budget prepared by the hotel’s sales director. Budgeted sources of revenue include hotel rooms, convention, wedding, meeting facilities, merchandise, and food and beverage. The controller then seeks input from all employees from maintenance staff to kitchen workers about anticipated payroll changes, operating costs, and planned events or promotions that may affect costs. Standard costs based on cost per occupied room are used to build the budget for guest room stays. Other standards are used for meeting rooms and food and beverage. The completed sales budget and annual operating budget are sent to corporate headquarters. From there actual monthly performance against plan is monitored. On the 25th of each month budgets for the next 3 months are reviewed to be sure goals are still accurate. Accuracy can be critical for a business whose occupancy can fluctuate from day to depending on group or company bookings, special events, or changes in local competition. Any changes are communicated to corporate headquarters with explanations of revisions provided as needed. Managers of each hotel meet daily to review performance to date and have the ability to adjust prices in the reservation system if they choose. Adjusting prices can be important if a large group cancels at the last minute or if other unforseen events cause occupancy to drop suddenly as happened in the 2001 World Trade Center attacks. Meeting the monthly budget goals is primarily the responsibility of each hotel controller. The controller of each hotel receives a monthly report from corporate headquarters that shows how the hotel performed against budget as well as against the actual performance of other Ritz Carlton hotels. Ideas for boosting revenues and reducing costs are regularly shared among hotel controllers who recognize the value of contributing to the entire organization’s success not just the success of their own hotel properties QUESTION The Ritz Carlton gives all employees at each of its hotels the chance to meet with their hotel’s controller to review budgets and reports on actual performance as a form of participatory budgeting. What advantages or disadvantages do you see with this approach?
On January 1, 2018, M Company Granted 100,000 Stock Options To Certain Executives. The
On January 1, 2018, M Company granted 100,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2020, and expire on January 1, 2024. Each option can be exercised to acquire one share of $1 par common stock for $11. An option-pricing model estimates the fair value of the options to be $4 on the date of grant. What amount should M recognize as compensation expense for 2018?
Value Investing Is Deriving The Intrinsic Value Of A Common Stock Independent Of Its
Value investing is deriving the intrinsic value of a common stock independent of its market price. The intrinsic value of a stock can be found and compared with its market value by using company’s information. Required: Explain the importance of understanding a firm’s business in value investing.
Define And Discuss The Advantages And Disadvantages Of The Method Of Comparables.
Define and discuss the advantages and disadvantages of the method of comparables.
Briefly Explain The Process To Reform The Financial Statements To Distinguish Two Key Aspects
Briefly explain the process to reform the financial statements to distinguish two key aspects of business, namely operating and financing. Identify three challenges for the reformulation of income statement, balance sheet and cash flow statement.
What Is Your Answer And How Do You Do The Problems In This Photo?
What is your answer and How do you do the problems in this photo? Thanks you
Explain SIX (6) Reasons Why Shareholders And Financial Managers Would Be Interested In The
Explain SIX (6) reasons why shareholders and financial managers would be interested in the Statement of Comprehensive Income.
A Machine With A Purchase Price Of R418 000 Is Estimated To Eliminate Manual
A machine with a purchase price of R418 000 is estimated to eliminate manual operations and save the company R130 000 cash per year. The machine will last 5 years and have no residual value at the end of its useful life. Required: Calculate the Internal Rate of Return (answer expressed to two decimal places).
The Annual Sales Of Product Y Of Govender Limited Is 400 000 Units. The
The annual sales of product Y of Govender Limited is 400 000 units. The purchase price is R12 per unit. The carrying cost of product Y amounts to 30% of the unit purchase price. The ordering cost is R45 per order. Required: Use the information provided above by Govender Limited to calculate the: 4.2.1 Economic order quantity (EOQ). (5) 4.2.2 Number of orders that need to be placed each year.
Jumbo Enterprises Plans To Borrow R1 000 000 For One Year. The Stated Interest
Jumbo Enterprises plans to borrow R1 000 000 for one year. The stated interest rate is 15% per annum. Required: Use the information provided above to calculate the effective interest rate if: 4.3.1 the interest is discounted (3) 4.3.2 there is a 25% compensating balance requirement
Betapharm Ltd Is A Large Pharmaceutical Company. Its Latest Drug Is THX 1138, Which
Betapharm Ltd is a large pharmaceutical company. Its latest drug is THX 1138, which is designed to remedy colds. The active ingredient of THX 1138 is selladol. Each table is supposed to have 0.1 g of selladol in it. Unfortunately, Betapharm’s chief production officer misread the specifications for the chemical mix when the factory made the first batch of drugs. As a result, each THX 1138 tablet contained 1 g of selladol – in other words ten times as much as it should have. Scientific evidence shows that any selladol dose above 0.2 g will produce severe dizziness, headaches and seizures, although these symptoms always wear off after a few hours. Alice bought a box of THX 1138 tablets and took one when she began to feel a cold coming on. She took a tablet and 30 minutes later, while driving home, she suddenly developed a dizziness and a blinding headache which in turn led to a seizure, causing her to crash her car. She suffered severe injuries, including losing an arm which was severed. Bob was standing next to the kerb when Alice crashed her car, and saw Alice’s arm being cut off. As a result, Bob suffers a nervous breakdown, incurs medical expenses, and cannot run his handicrafts business for two weeks. News of the effects of THX 1138 spreads quickly. As soon as it discovers what has happened, Betapharm puts out an alert in the newspapers, on TV and on social media recalling the drug, explaining its side effects and telling people not to take it. Dan, who is an accountant, reads one of the newspaper adverts. The next day he begins to feel a cold coming on. His wife sees him reach for a box of THX 1138 and says to him ‘Isn’t that the medication that causes terrible headaches?’ Dan says that his nose is so blocked up that he will take the tablet anyway. He develops a severe headache and nausea and cannot go into work, losing a day’s income as a result. One of Dan’s clients whose appointment that day is cancelled is Elizabeth. That day was the deadline for her to sell her business to a buyer who had set the condition of having a fully set of audited accounts given to him by Elizabeth. Because Dan is unable to complete the audit, Elizabeth loses the sale and the profit of $ 1 million she would have made. Assume that you have been asked to advise Betapharm Ltd on the extent to which it is liable to each of the potential plaintiffs mentioned in the facts. You must use the ILAC method and must give authority for the legal principles you rely on.
Exercise 27-22 (LO. 4) In 2013 And With $200,000, Alice Purchases A CD At
Exercise 27-22 (LO. 4) In 2013 and with $200,000, Alice purchases a CD at State Bank listing title as follows: “Alice, payable on proof of death to Clark.” Alice dies in 2018 and Clark (Alice’s nephew) redeems the CD (now worth $205,000). Disregarding the annual exclusion, what is Alice’s gift to Clark for both years? If an amount is zero, enter “0”. a. 2013 $ b. 2018 $
1. The Following Transactions Are In Relation To MR DLC, A Sole Trader For
1. The following transactions are in relation to MR DLC, a sole trader for the month of January 2018: N’000 January1 Started business with cash 72,000 2 Bought goods for cash 18,000 3 Sold goods for cash 4,400 5 Paid carriage 800 10 Paid for advertisment 800 11 Okon paid cash 3,400 13 Lent Jane Oladele 8,000 17 Cash sales 8,500 19 Purchased goods by cash 16,000 25 Paid wages 1,800 28 Cash sales 7,600 29 Jane Oladele paid cash 4,000 30 Paid rent 10,000 Required: Open ledger accounts to record the transactions and balance off on 31st January, 2018.
RTI Company’s Master Budget Calls For Production And Sale Of 19,400 Units For
RTI Company’s master budget calls for production and sale of 19,400 units for $100,880; variable costs of $46,560; and fixed costs of $21,400. During the most recent period, the company incurred $33,400 of variable costs to produce and sell 21,400 units for $86,400. During this same period, the company earned $26,400 of operating income. (Do not round intermediate calculations. Round final answer to the nearest whole dollar.) Required: 1. Determine the following for RTI Company: a. Flexible-budget operating income. b. Flexible-budget variance, in terms of contribution margin. c. Flexible-budget variance, in terms of operating income. d. Sales volume variance, in terms of contribution margin. e. Sales volume variance, in terms of operating income.
Jacobs Tools Sells Screwdriver Sets Through Their Retail Stores. Calculate The Total Fixed Costs
Jacobs Tools sells screwdriver sets through their retail stores. Calculate the total fixed costs (rounded to the nearest dollar) based on the following information: Selling Price per unit $ = 24 Variable Cost per unit $ = 13.42 Break Even units = 1250 units
MULTI ANSWER: Management Accounting Information Assists Managers To Do Which Of The Following Activities
MULTI ANSWER: Management accounting information assists managers to do which of the following activities within the business? a. Request ‘tailor made’ information in whatever form is useful for their decision making. b. Meet the information demands of external users c. Operate the business in a changing environment d. Provide information about the business to external users e. Compete in a global market in which technology and methods of production are constantly changing
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