Infomercial Entertainment, Inc

I would now like to examine Wal-marts financial data. Wal-Mart’s revenue improved over these three years by $39,736 million which is a gross increase of 9.1%. Additionally the Cost of Sales climbed from

17. St. Augustine Company is trying to decide which one of two contracts it will accept. The costs and revenues associated with

John Atherley is the owner of Atherley Furniture Company located near Orillia, Ontario. In recent years the progression of his chair division has had mediocre results and profits have been declining steadily each year. From the years 1995 to 1998 Atherley Furniture’s total profits have suffered a 24% loss within that time span. In the company’s chair division there are three models of chairs that have quite the reputation the “Caledonia”, “Atherley”, and lastly the “Parkdale”. Growing concern for the company’s performance led the executive team to analyze income statements for each model to determine the attributed expenses and revenues. With a decline in profits for the Atherley Company, it is crucial that they

In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.

Account W/P Common Common # Title Ref. Balance Size Balance Size Amount Percentage REVENUE 40000 Sales 246,172,918.44 102.33% 245,213,452.88 106.40% -959,465.56 -0.39% 41000 Sales Returns 4,497,583.20 1.87% 13,600,220.89 5.90% 9,102,637.69 202.39% 42000 Warranty Exp 1,100,281.48 0.46% 1,158,128.47 0.50% 57,846.99 5.26% Net Sales 240,575,053.76 100.00% 230,455,103.52 100.00% (10,119,950.24) -4.21% EXPENSES 50000 COGS 141,569,221.61 58.85% 130,246,645.26 56.52% (11,322,576.35) -8.00% Gross Margin 99,005,832.15 41.15% 100,208,458.26 43.48% 1,202,626.11 1.21% GA-7.4

For years 1983-1985, additional corporate assessment expense was given. This would lower Polymold’s earnings on their income statement. Another piece of data that was given is research and development expense. Without the CAD/CAM investment, research and development expense is $130,000. This is double to $260,000 without the CAD/CAM investment. This would lower earnings. We are also given the savings that the investment would yield. Without the CAD/CAM investment, there would still be savings – but not as much as with the CAD/CAM investment, which is due to the depreciation of the equipment and tax credits.

Webmasters.com has developed a powerful new server that would be used for corporations’ Internet activities. It would cost $10 million at Year 0 to buy the equipment necessary to manufacture the server. The project would require net working capital at the beginning of each year in an amount equal to 10% of the year's projected sales; for example, NWC0 = 10%(Sales1). The servers would sell for $24,000 per unit, and Webmasters believes that variable costs would amount to $17,500 per unit. After Year 1, the sales price and variable costs will increase at the inflation rate of 3%. The company’s

Complete an income statement, balance sheet and statement of cash flows for 2011 assuming that sales projects were 20% lower

Calculate cost of goods sold for the year. (Omit the "$" sign in your response.)

Peak Garage Doors Inc. is a privately owned firm and has had 2003 sales of $9.2 million and net profits before taxes of 460,000. Given is a 2003 income statement (pg.411) which states that cost of goods sold was $6.9 million. With the sales and cost of goods sold numbers we can figure out that the contribution margin for Peak’s garage doors is $0.25 for every dollar sold. The company has 2 distribution centers and employs 8 sales representatives for independent dealers and 2 sales reps for the exclusive dealers, each rep with a salary of $80,000. Below is the summary of employee composition.

The total amount of the costs which should be matched with Revenues for 2003 is $71,129. This is done by taking the capitalization amount shown above (217,520), dividing it by the 200,000 unit estimate, and multiplying it by the units that were sold in 2003. The calculation is shown below.

In the revised income statement, projected net income after taxes would significantly increase from $3,963K to $4,651K in 2011, and from $3,818K to $4,716K in 2012. This is predominantly driven by the sales growth of $21.6 million in 2011 and $28 million in 2012. Without this project, net income would have otherwise peaked in 2011 and decline in subsequent years. Thus, this investment

1. Compute the Free Cash Flows for the years 2010 to 2020 for both projects

The actual production would begin in the third quarter of this year, therefore only half year’s depreciation should be counted on Equipment and IT communication in 2004 (According to Appendix A). The following years (2005-2008) incremental cash flows are computed by the same method. However as the IT equipment and furnishings would be depreciated on a straight line basis over 3 years, thus in year four (2007), there would be only half a year’s deprecation left and after that it will be used up. The last year’s net cash flow in 2009 should be included the extra terminal Value on that year, which includes 24 years’ residual value on building and one year and a half residual value on equipment totaled $2,990,412 with two assumptions of by using residual book values for the building and operating equipment and there will be no further NWS advantage after year 2009. Finally, by obtaining 6 years’ incremental cash-flows and discounting them back to time zero (with the estimate rate of return by 15%) lessing initial cost to get an appealing NPV of $1190528 (Luehrman, p. 3).

Assume that on January 1, 2005, each of the three airlines purchases a new Boeing 757 for $75 million. Each airline estimates that the residual value will be 5% of cost. Each airline uses the average depreciation period that is consistent with its policies as stated in the Appendix, found on page 3. On January 1, 2009, each firm sells the plane. First, assume that Northwest sells its plane for $55 million, Delta sells its plane for $60 million, and United sells its plane for $65 million (Sale Price I). Second, assume each firm sells its plane for $60 million (Sale Price II).