I'm preparing some examples for our next board meeting to illustrate how important it is toaccurately align our sales forecasts to our production plans. I could use your help with this work.Andrews ended the year with excess inventory valued at $13,956,000. Had they sold all of theirinventory last year at their current prices, how much more revenue could Andrews havegenerated?Louis DevriesBoard Member, Operations | AndrewsCorporation$28,188,765$4,523,140$21,289,000$13,956,000

Excess Inventory Value = $13,956,000This value represents the cost of the inventory that Andrews…

Answered: I'm preparing some examples for our…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 20P

See similar textbooks

Similar questions

Subject: accounting ABC Corporation has divisions. One of the division is currently, making a profit of OMR 82,000 per year. On investment of OMR 500,000 and has a target return of 15%. The manager of a company is considering a new investment, which will require additional investment of OMR 100,000 and will generate additional profit of OMR 17,000 per year. Calculate whether or not the new investment is attractive to the company as a whole. Calculate the ROI of the division, with and without new investment and hence determine whether or not manager would decide to accept the new investment
Poleski Manufacturing, which maintains the same level of inventory at the end of each year, provided the following information about expenses anticipated for next year: The selling price of Poleskis single product is 16. In recent years, profits have fallen and Poleskis management is now considering a number of alternatives. Poleski wants to have a net income next year of 250,000, but expects to sell only 120,000 units unless some changes are made. The president of Poleski has asked you to calculate the companys projected net income (assuming 120,000 units are sold) and the sales needed to achieve the companys net income objective for next year. Also, compute Poleskis contribution margin per unit, contribution margin ratio, and break-even point for next year. The worksheet CVP has been provided to assist you. Note that the data from the problem have already been entered into the Data Section of the worksheet.
pharoah marble company has total assets of 13350000 sales of 18690000 and net income of 4672500. management expects sales to grow by 25% next year. all assets and costs (including taxes) vary directly with sales, and management expects to maintain a payout ratio of 65%. Calculate Pharoah's EFN.
The Martins know that setting up some projected Income Statements are important. They need to look at what the first year of operations might look like and if possible they will need to look at the years thereafter to get an impression of what the long term might look like. RM Purchases: $132,000* (Raw Material Purchases is a part of COGS) Sales Salaries: 80,000 Advertising: 3,000 Travel: 2,000 Revenue: 360,000 Financing Costs: 10,000 Office Lease: 13,000 Depreciation: 38,000 Income Taxes: 22,000 Admin Salary: 40,000 A second financial statement that is key to understanding a business is the Balance Sheet. The Martins have estimated the following accounts to be a part of their initial Balance Sheet. Trade Receivables: $35,000 Cash: 15,000 Short Term Loan: 30,000 Share Capital: 100,000 Long Term Liabilities: 60,000 Property, Plant:…
Information: Revenues = Estimated at $1,000,000 for the upcoming year and anticipated to grow by 5% per year with different marketing tactics will employ. Expenses = $1,000,000 for the upcoming year and anticipated to decline to 95% of revenues each year thereafter as a result of the various cost efficiencies Struggle would put in place. Questions: XYZ is contemplating either the outright purchase today or a lease of a major piece of machinery and wants you to recommend which would be preferable – lease or buy. The following are the terms associated with each option: Purchase Price Option = $1,000,000 Incremental Borrowing Rate = 5% Estimated Life of Asset = 15 Years Lease Payments = $90,000/year for 15 Years with $1 Purchase Option at end of lease.
Ricardo Entertainment recently reported the following income statement:Sales 12,000,000Cost of goods sold 7,500,000EBIT 4,500,000Interest 1,500,000EBT 3,000,000Taxes (40%) 1,200,000Net income 1,800,000The company’s CFO, Fred Mertz, wants to see a 25 percent increase in net income over the next year.In other words, his target for next year’s net income is $2,250,000. Mertz has made the followingobservations: Ricardo’s operating margin (EBIT/Sales) was 37.5 percent this past year. Mertz expects thatnext year this margin will increase to 40 percent. Ricardo’s interest expense is expected to remain constant. Ricardo’s tax rate is expected to remain at 40 percent.On the basis of these numbers, what is the percentage increase in sales that Ricardo needs in order tomeet Mertz’s target for net income?
Database Systems is considering expansion into a new product line. Assets to support expansion will cost $890,000. It is estimated that Database can generate $1,860,000 in annual sales, with an 13 percent profit margin. What would net income and return on assets (investment) be for the year? (Input your return on assets answer as a percent rounded to 2 decimal places.) Net Income Return on assets 96
Current Attempt in Progress Crane Company had $290,600 of net income in 2021 when the unit selling price was $154, the unit variable costs were $94, and the fixed costs were $573,400. Management expects per unit data and total fixed costs to remain the same in 2022. The president of Crane Company is under pressure from stockholders to increase net income by $57,600 in 2022. (a) Your answer is correct. Compute the number of units sold in 2021. Sales in 2021 eTextbook and Media 14400 units Attempts: 1 of 3 used
The Manning Company has financial statements as shown next, which are representative of the company’s historical average. The firm is expecting a 30 percent increase in sales next year, and management is concerned about the company’s need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Income Statement Sales $ 240,000 Expenses 181,200 Earnings before interest and taxes $ 58,800 Interest 7,400 Earnings before taxes $ 51,400 Taxes 15,400 Earnings after taxes $ 36,000 Dividends $ 12,600 Balance Sheet Assets Liabilities and Stockholders' Equity Cash $ 6,000 Accounts payable $ 23,300 Accounts receivable 57,000 Accrued wages 1,800 Inventory 81,000 Accrued taxes 3,700 Current assets $ 144,000 Current liabilities $ 28,800 Fixed…
Swann Systems is forecasting the following income statement for the upcoming year:Sales $5,000,000Operating costs (excluding depreciation) $3,000,000Gross margin $2,000,000Depreciation $500,000EBIT $1,500,000Interest $500,000EBT $1,000,000Taxes (40%) 400,000Net income $ 600,000The company’s president is disappointed with the forecast and would like to see Swann generate higher sales and a forecasted net income of $2,000,000. Assume that operating costs (excluding depreciation) are always 60 percent of sales. Also, assume that depreciation, interest expense, and the company’s tax rate, which is 40 percent, will remain the same even if sales change. What level of sales would Swann have to obtain to generate $2,000,000 in net income?Show your calculations. Question 3Please review the two PPT packages below, and then prepare an essay (or memo) that includes the following elements. Limit to 2-4 pages (including charts / tables / references where applicable).What is the key theme of the two…
Consider the following scenario: Green Caterpillar Garden Supplies Inc.’s income statement reports data for its first year of operation. The firm’s CEO would like sales to increase by 25% next year. 1. Green Caterpillar is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before interest and taxes (EBIT). 2. The company’s operating costs (excluding depreciation and amortization) remain at 60% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company’s tax rate remains constant at 25% of its pre-tax income or earnings before taxes (EBT). 4. In Year 2, Green Caterpillar expects to pay $100,000 and $1,759,500 of preferred and common stock dividends, respectively. A. Complete the Year 2 income statement data for Green Caterpillar, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar. Green Caterpillar…
The Best Medical Supply Company has two divisions that operate independently of one another. The financial data for the year 2020 reported the following results: North South Sales Operating income Invested capital P300,000,000 75,000,000 600,000,000 P250,000,000 55,000,000 500,000,000 The company's desired rate of return is 10%. What are the respective residual incomes for the North and South Divisions? P15,000,000 and P5,000,000 P3,000,000 and P5,000,000 P5,000,000 and a negative P15,000,000 P15,000,000 and P3,000,000

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Excel Applications for Accounting Principles

Accounting

ISBN:

9781111581565

Author:

Gaylord N. Smith

Publisher:

Cengage Learning

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Excel Applications for Accounting Principles

Accounting

ISBN:

9781111581565

Author:

Gaylord N. Smith

Publisher:

Cengage Learning

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Entrepreneurial Finance

Finance

ISBN:

9781337635653

Author:

Leach

Publisher:

Cengage

Financial Accounting: The Impact on Decision Make…

Accounting

ISBN:

9781305654174

Author:

Gary A. Porter, Curtis L. Norton

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS