Homework Answers
| Particulars | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| Sales | 400,000 | 450,000 | 500,000 | 550,000 | 550,000 |
| Less: | |||||
| Selling expenses | (60,000) | (65,000) | (65,000) | (65,000) | (70,000) |
| Rent expense | (52,000) | (50,000) | (55,000) | (55,000) | (55,000) |
| Salaries | (53,000) | (55,000) | (55,000) | (60,000) | (60,000) |
| Depreciation | (150,000) | (150,000) | (150,000) | (150,000) | (150,000) |
| Net income | 85,000 | 130,000 | 175,000 | 220,000 | 215,000 |
| Add | |||||
| Depreciation | 150,000 | 150,000 | 150,000 | 150,000 | 150,000 |
| Cash Flows | 235,000 | 280,000 | 325,000 | 370,000 | 365,000 |
| Cash flow as on date | (850,000) |
(All amounts in AED)
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PART II: (Total Marks = 50) Project: BARBELLE LADIES CLUB Expansion BARBELLE LADIES CLUB Company is...
PART II: (Total Marks = 50) Project: BARBELLE LADIES CLUB Expansion new investment would cost AED...
PART II: (Total Marks = 50) Project: BARBELLE LADIES CLUB Expansion new investment would cost AED 850,000 to invest today. These assets will last for 5 years with no salvage value. The company uses a straight-line depreciation method. Management has prepared the projected income statements for 5 years given below. Year 1 Year 2 Year 3 Year 4 Year 5 Sales 400,000 450,000 500,000 550,000 550,000 Selling 60,000 65,000 65,000 65,000 70,000 expense 52,000 50,000 55,000 55,000 55,000 Rent expense...
Question 2: Calculate the Payback Period. Shall investment be accepted target payback period is 3 years?...
Question 2: Calculate the Payback Period. Shall investment be accepted target payback period is 3 years? (25 marks) Question 3: Calculate Average Accounting Return (AAR) for the Famous Company. Shall investment be accepted if target rate of return is 19%? (15 marks) PART II: (Total Marks 50) Project: BARBELLE LADIES CLUB Expansion BARBELLE LADIES CLUB Company is planning to open a new branch in Dubai. The new investment would cost AED 850,000 to invest today. These assets will last for...
Question 2: Calculate the Payback Period. Shall investment be accepted target payback period is 3 years?...
Question 2: Calculate the Payback Period. Shall investment be accepted target payback period is 3 years? (25 marks) Question 3: Calculate Average Accounting Return (AAR) for the Famous Company. Shall investment be accepted if target rate of return is 19%? (15 marks) amount of money at the end of each year, caming 7% annual interest rate. How much is such a yearly annuity? (4 marks) PART II: (Total Marks = 50) Project: BARBELLE LADIES CLUB Expansion BARBELLE LADIES CLUB Company...
PART II: (Total Marks - 30) BARBELLE LADIES CLUB Company has the chance to open a...
PART II: (Total Marks - 30) BARBELLE LADIES CLUB Company has the chance to open a third branch. There are two possible locations. The company is evaluating the following two projects. The cost of Project A is AED 550,000, for Project Bis AED 350,000. The cost of capital is 10%. Year 1 Year 2 Year 3 Year 4 Year 5 Project A 120,000 130,000 165,000 145,000 150,000 150,000 Project B 100,000 110,000 120,000 140,000 1) Calculate the net present value...
Darling Paper Container, Inc. purchased several machines at a total cost of $300,000. The installation cost...
Darling Paper Container, Inc. purchased several machines at a total cost of $300,000. The installation cost for this equipment was $25,000. The firm plans to depreciate the equipment using the MACRS 5-year normal recovery period. The depreciation percentage according to the MACRS schedule is 20%. The company's marginal tax rate is a flat 21%. If the company reduces its reported income by the amount of the depreciation expense, what tax savings will result? O $60,000 O $12.600 $65,000 O $13,650...
264,000239,000 S721.000 $698,000 Less accumulated depreciation... Accounts payable Income taxes payable .. Bonds payable $ 58,000...
264,000239,000 S721.000 $698,000 Less accumulated depreciation... Accounts payable Income taxes payable .. Bonds payable $ 58,000 $46,000 19,000 41,000 100,000 160,000 150,000 140,000 343 000 292,000 $721,000 $698.000 15,000 55,000 Common stock Total liabilities and stockholders' equity Income Statement Sales Cost of goods sold.. Gross margin Selling and administrative expense $870,000 450,000 420,000 270 000 150,000 45,000 $105.000 Net income The company declared and paid a cash dividend of $54,000 during the year. It did not purchase or dispose of...
Calculate the accounts receivable turnover, average collection period (days), inventory turnover, fixed asset turnover, and total...
Calculate the accounts receivable turnover, average collection
period (days), inventory turnover, fixed asset turnover, and total
asset turnover for each period.
X2 X3 X4 $2,500,000 3.200,000 3,500,000 4,000,000 1.900.000 2400.0002.700.000 3200.000 800,000 400,00D 25,000 200,000 10.000 20.000 30.000 60.000 15,000 107,500 COST OF GOODS SOLD GROSS PROFIT SELLING & ADMINISTRATIVE EXPENSE DEPRECIATION LEASES MISCELLANEOUS EXPENSE 600,000 400,000 800,000 800,000 400,000 160,000 190,000 138,700 25,000 175,000 170,000 89,000 EARNINGS BEFORE INTEREST & TAXES INTEREST EARNINGS BEFORE TAXES TAXES (35%) NET INCOME...
Calculate the current ratio, quick ratio, long-term debt/total assets, times interest earned, and fixed cost coverage...
Calculate the current ratio, quick ratio, long-term debt/total
assets, times interest earned, and fixed cost coverage using the
picture below.
X2 X3 X4 $2,500,000 3.200,000 3,500,000 4,000,000 1.900.000 2400.0002.700.000 3200.000 800,000 400,00D 25,000 200,000 10.000 20.000 30.000 60.000 15,000 107,500 COST OF GOODS SOLD GROSS PROFIT SELLING & ADMINISTRATIVE EXPENSE DEPRECIATION LEASES MISCELLANEOUS EXPENSE 600,000 400,000 800,000 800,000 400,000 160,000 190,000 138,700 25,000 175,000 170,000 89,000 EARNINGS BEFORE INTEREST & TAXES INTEREST EARNINGS BEFORE TAXES TAXES (35%) NET INCOME DIVIDENDS...
2. Calculate Average return and evaluate whether the com the company should accept or reject the...
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Below are the income statement and comparative balance sheet of Doone Corporation for year ending Dec...
Below are the income statement and comparative balance sheet of Doone Corporation for year ending Dec 31, 2019 is given below. All amounts in Canadian dollars. Required: Prepare the cashflow statement, clearly including operating, financing and investing activities up to the net change in cash using the Indirect method as of Dec 31, 2019. Doone Corporation Income Statement For the Year ended Dec 31, 2019 Sales Revenue 780,000 Less: Cost of Goods Sold 360,000 Gross Profit 420,000 Less: Selling,...
PART II: (Total Marks = 50) Project: BARBELLE LADIES CLUB Expansion new investment would cost AED 850,000 to invest today. These assets will last for 5 years with no salvage value. The company uses a straight-line depreciation method. Management has prepared the projected income statements for 5 years given below. Year 1 Year 2 Year 3 Year 4 Year 5 Sales 400,000 450,000 500,000 550,000 550,000 Selling 60,000 65,000 65,000 65,000 70,000 expense 52,000 50,000 55,000 55,000 55,000 Rent expense...
Question 2: Calculate the Payback Period. Shall investment be accepted target payback period is 3 years? (25 marks) Question 3: Calculate Average Accounting Return (AAR) for the Famous Company. Shall investment be accepted if target rate of return is 19%? (15 marks) PART II: (Total Marks 50) Project: BARBELLE LADIES CLUB Expansion BARBELLE LADIES CLUB Company is planning to open a new branch in Dubai. The new investment would cost AED 850,000 to invest today. These assets will last for...
Question 2: Calculate the Payback Period. Shall investment be accepted target payback period is 3 years? (25 marks) Question 3: Calculate Average Accounting Return (AAR) for the Famous Company. Shall investment be accepted if target rate of return is 19%? (15 marks) amount of money at the end of each year, caming 7% annual interest rate. How much is such a yearly annuity? (4 marks) PART II: (Total Marks = 50) Project: BARBELLE LADIES CLUB Expansion BARBELLE LADIES CLUB Company...
PART II: (Total Marks - 30) BARBELLE LADIES CLUB Company has the chance to open a third branch. There are two possible locations. The company is evaluating the following two projects. The cost of Project A is AED 550,000, for Project Bis AED 350,000. The cost of capital is 10%. Year 1 Year 2 Year 3 Year 4 Year 5 Project A 120,000 130,000 165,000 145,000 150,000 150,000 Project B 100,000 110,000 120,000 140,000 1) Calculate the net present value...
Darling Paper Container, Inc. purchased several machines at a total cost of $300,000. The installation cost for this equipment was $25,000. The firm plans to depreciate the equipment using the MACRS 5-year normal recovery period. The depreciation percentage according to the MACRS schedule is 20%. The company's marginal tax rate is a flat 21%. If the company reduces its reported income by the amount of the depreciation expense, what tax savings will result? O $60,000 O $12.600 $65,000 O $13,650...
264,000239,000 S721.000 $698,000 Less accumulated depreciation... Accounts payable Income taxes payable .. Bonds payable $ 58,000 $46,000 19,000 41,000 100,000 160,000 150,000 140,000 343 000 292,000 $721,000 $698.000 15,000 55,000 Common stock Total liabilities and stockholders' equity Income Statement Sales Cost of goods sold.. Gross margin Selling and administrative expense $870,000 450,000 420,000 270 000 150,000 45,000 $105.000 Net income The company declared and paid a cash dividend of $54,000 during the year. It did not purchase or dispose of...
Calculate the accounts receivable turnover, average collection
period (days), inventory turnover, fixed asset turnover, and total
asset turnover for each period.
X2 X3 X4 $2,500,000 3.200,000 3,500,000 4,000,000 1.900.000 2400.0002.700.000 3200.000 800,000 400,00D 25,000 200,000 10.000 20.000 30.000 60.000 15,000 107,500 COST OF GOODS SOLD GROSS PROFIT SELLING & ADMINISTRATIVE EXPENSE DEPRECIATION LEASES MISCELLANEOUS EXPENSE 600,000 400,000 800,000 800,000 400,000 160,000 190,000 138,700 25,000 175,000 170,000 89,000 EARNINGS BEFORE INTEREST & TAXES INTEREST EARNINGS BEFORE TAXES TAXES (35%) NET INCOME...
Calculate the current ratio, quick ratio, long-term debt/total
assets, times interest earned, and fixed cost coverage using the
picture below.
X2 X3 X4 $2,500,000 3.200,000 3,500,000 4,000,000 1.900.000 2400.0002.700.000 3200.000 800,000 400,00D 25,000 200,000 10.000 20.000 30.000 60.000 15,000 107,500 COST OF GOODS SOLD GROSS PROFIT SELLING & ADMINISTRATIVE EXPENSE DEPRECIATION LEASES MISCELLANEOUS EXPENSE 600,000 400,000 800,000 800,000 400,000 160,000 190,000 138,700 25,000 175,000 170,000 89,000 EARNINGS BEFORE INTEREST & TAXES INTEREST EARNINGS BEFORE TAXES TAXES (35%) NET INCOME DIVIDENDS...
2. Calculate Average return and evaluate whether the com the company should accept or reject the project and why? 3. Calculate Net present value and evaluate whether the company should accent reject the project and why? Year Cash Flow PV if r&n Present value Al Zamzam Company has to decide on investment of purchasing new equipment of AED 450,000 for the fast production. Assist company in making the effective decision. The followings are net income (NI) and data (AED): -...
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