23 Feb Conrad Air, Inc. reported net income of $1,365,000 for the year ended December 31, 2015. Show the effect of these funds on the firms balance sheet for the previous year (following slide) in
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Conrad Air, Inc. reported net income of $1,365,000 for the year ended December 31, 2015. Show the effect of these funds on the firms balance sheet for the previous year (following slide) in each of the scenarios following the balance sheet.
Conrad paid no dividends during the year and invested the funds in marketable securities.
Conrad paid dividends totaling $500,000 and used the balance of the net income to retire (pay off) long- term debt.
Conrad paid dividends totaling $500,000 and invested the balance of the net income in building a new hangar.
Conrad paid out all $1,365,000 as dividends to its stockholders.
Delia Martin has $10,000 that she can deposit in any of three savings accounts for a 3-year period. Bank A compounds interest on an annual basis, Bank B compounds interest twice each year, and bank C compounds interest each quarter. The nominal interest rates at each bank are 4%
What amount would Ms. Martin have at the end of the third year, leaving all interest paid on deposit, in each bank? What effective annual rate (EAR) would she earn in each of the banks?
On the basis of your findings in parts a and b, which bank should Ms. Martin deal with? Why?
If a fourth bank (bank D), also with a 4% stated interest rate, compounds interest continuously, how much would Ms. Martin have at the end of the third year? Does this alternative change your recommendation in part c? Explain why or why not.
An engineering firm realizes that a new machine will be needed in three years. The new machine is expected to cost
$1,235,000, at current cost, however, the machine is very popular, and supply has been limited, therefore, the price escalates by 4% each year. The firm expects interest rates to be 5% for the next three years with no variation anticipated. The Chief Engineer would like to know how much money the firm would have to save each year over the next three years to be able to pay cash for the machine.
Project Denali has three tasks. Task A has a PV of $400, is 80% complete, and actually cost $395 so far. Task B has a PV $350, is 78% complete, and actually cost $330 so far. Task C has a PV of $275, is 92% complete, and actually cost $310 so far.
What is the Estimate to Completion for the project?
What is the CPI for the project?
You are the project manager for a very important e-learning project that will add 15 identical web portals for the separate divisions of a large, international company. Although some differences in the web portals exist, for planning and execution purposes, the portals are considered to be identical. The plan requires the entire team working on and completing a web portal before beginning the next web portal. Your team has completed the planning process and is in the middle of executing the project. Web portal priorities have been established and agreed to by all stakeholders. Therefore, the most time critical web portals are started and completed first. Your budget baseline allows $300,000 per portal to complete each web portal. You are conducting a team progress review at the end of the 15th week of the project. You find out that the Earned Value is$1,200,000 and the Actual Cost is $1,350,000.
The team has been able to implement the plan with some difficulties. Based on the information provided, how many web portals has the team implemented by the end of the 15th week?
What is the EV?
What is the CV?
What is the BAC?
Assume that the planned length of the project is 45 weeks. What is the Planned Value at the end of week 15?
What is the EAC at the end of the 15th week?
Find the Net Present Value for each of the projects listed below:
Wren Manufacturing is analyzing investment decisions. Two projects are evaluated using the IRR technique. The prevailing interest rate is 12.5%. MARR is 15%.
Calculate the IRR for each project.
Calculate the NPV for each project.
Which project should be selected if IRR is the deciding factor.
Which project should be selected if NPV is the deciding factor?
The Zebulon Machine Tool Company is creating a financial plan for the year 2016. The company uses a Weighted Moving Average approach to financial planning. The most recent year for which actual costs have been formalized is 2014 (n-1). The company budgets R&D at 8.5% of forecasted revenue. The company uses the following formula to calculate WMA.
Fn = 40%(An-1) + 30%(An-2) + 20%(An-3) + 10%(An-4) – F= Forecast, A = Actual Revenue
Calculate the forecasted revenue for 2015.
Calculate the budget for R&D for 2015.
The Alfa Specialty Engineering Company (SPEC) is opening for business. The shop sells various types of unique hydraulic system replacement parts.
A system engineering firm has offered to buy 1,500 specialty items for $10,000.
Fixed costs for one month = $4,000
SPEC has priced the items at $8.00 each.
Variable cost per item = $6.00. Questions:
Calculate SPECs operating breakeven point.
Calculate SPECs EBIT on the order.
If SPEC renegotiates the contract at a price of $ 10.00 per item, what will the EBIT be?
If the systems engineering firm refuses to pay more than $ 8.00 per unit but is willing to negotiate quantity, what quantity of items will result in an EBIT of $ 4,000?
Barry Carter is thinking about opening a music store. To primarily sell music CDs.
Price per CD = $13.98
Variable Operating Costs = $10.48 per CD.
Annual Fixed Costs = $73,500. Questions:
How many CDs will Barry Carter have to sell to break even.
Calculate the total operating costs at the break-even point (at total number of CDs required to achieve the breakeven point)
If Barry estimates that at a minimum he can sell 2,000 CDs per month, should he go into the video business?
How much EBIT will Barry realize if he sells the minimum 2,000 CDs per month noted in part c?
ENMA 700 Extra Credit Final Exam Spring 2021 1.An engineering firm realizes that a new machine will be needed in seven years. The new machine is expected to cost $2,589,000, at current cost, however, the machine is very popular, and supply has been limited, therefore, the price escalates by 5% each year. The firm expects interest rates to be 2.5% for the next seven years with no variation anticipated. The Chief Engineer would like to know how much money the firm would have to accumulate at the end of each year over the next seven years to be able to pay cash for the machine.2.Project Denali has three tasks. Task A has a PV of $2,500, is 85% complete, and actually cost $2,169 so far. Task B has a PV$3,258 is 78% complete, and actually cost $3,030 so far. Task C has a PV of $2,875, is 90% complete, and actually cost $3,310 so far. The total budget is $8,633.a.What is the Estimate at Completion (EAC) for the project?b.What is the Estimate to Completion for the project?c.What is the CPI for the project?d.What is the SPI for the project?3.You are the project manager for a very important e-learning project that will add 25 identical web portals for the separate divisions of a large, international company. Although some differences in the web portals exist, for planning and execution purposes, the portals are considered to be identical. The plan requires the entire team working on and completing a web portal before beginning the next web portal. Your team has completed the planning process and is in the middle of executing the project. Web portal priorities have been established and agreed to by all stakeholders. Therefore, the most time critical web portals are started and completed first. Your budget baseline allows $255,000 to complete each web portal. You are conducting a team progress review at the end of the 15th week of the project. You find out that the Earned Value is$1,020,000 and the Actual Cost is $1,189,000.a.The team has been able to implement the plan with some difficulties. Based on the information provided, how many web portals has the team implemented by the end of the 15th week?b.What is the EV at the end of the 15th week?c.What is the CV at the end of the 15th week?d.What is the BAC?e.Assume that the planned length of the project is 75 weeks. What is the Planned Value at the end of week 15?f.What is the EAC at the end of the 15th week?
ENMA 700 Extra Credit Final Exam Spring 2019 4.Find the Net Present Value for each of the projects listed below:Project AlphaProject BravoProject DeltaProject Echoi8.0%9.2%6.0%9.8%CompoundedAnnuallyQuarterlyMonthlyAnnualInitial Investment(18,000)(42,000)(24,500)(128,655)Cash Flows (Years)1$18,756$6,525$3,850$38,5002$18,756$6,500$3,850$38,5003$18,756$6,475$3,850$38,5004$18,756$6,450$3,850$38,5005$18,756$6,425$3,850$38,5006$18,756$6,400$3,850$38,500
