Bruce Honiball's Invention It was another disappointing year for Bruce Honiball, the manager of retail services at the Gibb River Bank. Sure, the retail side of Gibb River was making money, but it didn't grow at all in 2009. Gibb River had plenty of loyal depositors, but few new ones. Bruce had to figure out some new product or financial service-something that would generate some excitement and attention. Bruce had been musing on one idea for some time. How about making it easy and safe for Gibb River's customers to put money in the stock market? How about giving them the upside of investing in equities-at least some of the upside-but none of the downside?
Q: Ethics and the Manager Venice InLine, Inc., was founded by Russ Perez to produce a specialized…
A:
Q: Steve Osbourne is considering opening a business, but the major decision faced is how to organize…
A: In the context of the given, Steve has faced confusion that how to organize a start-up business. he…
Q: g skills regarding screening and preference methods to decide on the best system for the company.…
A: Introduction: The time value of money states that the value of today's dollar in more than the value…
Q: Marketing: Abercrombie & Fitch, once the favorite of loyal teens, is considering lowering…
A: Step1: Calculating the current gross profit. We have,Gross profit margin = 45 %Total sales on the…
Q: Athif trading company is a popular distributor in Salala, having operations in the entire Oman. Over…
A: Gross Profit margin = gross profit/sales *100 Net profit margin = net profit/sales*100
Q: We really need to get this new material – handling equipment in operation just after the new year…
A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Shonta started a graphic design firm a year ago.The business has done well, but it needs a lotmore…
A: Bank is a financial institution which accept the funds from the depositors and use that fund to…
Q: Apple mart in Nizwa had faced a serious working capital issues during the last year due to the…
A: Cost of goods sold = opening stock + purchase + purchase retu5 - closing stock =…
Q: Apple mart in Nizwa had faced a serious working capital issues during the last year due to the…
A: The answer for the multiple choice question and relevant working are presented hereunder :
Q: Terence Breezeway, the CEO of Prairie Home Stores, wondered what retirement would be like. It was…
A: Valuation of the company: Rapid Growth Scenario There are several methods that can be used to…
Q: You are considering entering the shoe business. You believe that you have a narrow window for…
A: Calculate the stock price after adjusting for dividend as follows:
Q: The GFA Company, originally established 16 years ago to make footballs, is now a leading producer of…
A: Net present value (NPV) can be computed by subtracting present value of cash outflows from the…
Q: “We really need to get this new material – handling equipment in operation just after the new year…
A: Answer 1: Schedule of expected cash disbursement for inventory purchase Working note: Purchases…
Q: In early 2008, Doc and Lyn McGee formed the McGee Cake Company. Doc did all the baking, and Lyn…
A: The financial problem here is insufficient cash-flow to fund operations and support the growth of…
Q: Case Study Meet John. John has an idea for a new business, delicious ice cream that's healthy enough…
A: Institutional investors are those company or organization which invests on the behalf of other…
Q: 2. The ABC Company has opened 10 new stores. It has incurred a great deal of expenses associated…
A: Investment for any opportunity need an analysis which is called capital decisions. This is the way…
Q: ETHICS CASE The controller of Diaz Fashions believes that the yearly allowance for doubtful…
A: a) The stakeholders are the parties which take interest in the company’s management. In the given…
Q: The pretax operating cash flow of Sandhill Motors declined so much during the recession of 2008 and…
A: Given:Fixed cost reduces from $489000 to $ 304000Reduce the cash flow DOL from 3.1 to 2.4 with sales…
Q: “We really need to get this new material – handling equipment in operation just after the new year…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: The GFA Company, originally established 16 years ago to make footballs, is now a leading producer of…
A: Net present value (NPV) can be computed by subtracting present value of cash outflows from the…
Q: The Castillo Products Company was started in 2008. The company manufactures components for personal…
A: 4. After-tax cost of short-term bank loans = short term debt * (1 – tax rate ) = 8 * (1 – 0.3) =…
Q: "You are running a hot Internet company. Analysts predict that its earnings will grow at 40% per…
A: given growth rate = 40% for year 1 to 5 terminal growth rate = 2%
Q: Just the second question. First is info to answer the second.
A: Calculate the stock price after adjusting for dividend as follows:
Q: You have been doing a good business at your auto service & repair shop, Business is brisk! You have…
A: 6)Total revenue per week sales of 30 brake replacements @ $300 each.…
Q: Calculate the: net profit margin; total-sales-to-total-assets ratio; the equity multiplier; and the…
A: Since you have posted a question with multiple sub parts therefore we will be solving the first…
Q: Please show all equations and work as needed. If possible, please type the work so that it may be…
A: Calculation of Value of Call:The value of call is $3.54.Excel Spreadsheet:
Q: Joe’s Build Back Better (BBB) Ammo Corp has$15 million in cash, which it has accumulated from…
A: Funds are limited and have various alternative uses. The opportunity cost is the cost of the next…
Q: With the projected sales increasing it would be smart to how it going to the double declining method…
A: Depreciation: Depreciation is a systematic reduction of cost of an asset (generally fixed asset).…
Q: Alif trading company is a popular distributor in Salala, having operations in the entire Oman. Over…
A: Both the ratios are calculated by assuming sales as a denominator. Gross Profit Margin = [Gross…
Q: Ameen trading company is a popular distributor in the Nizwa region having years of experience in the…
A: Gross profit margin can be defined as the metric to evaluate the profitability of the company to…
Q: Ameen trading company is a popular distributor in the Nizwa region having years of experience in the…
A: Ratio analysis means where different ratio of various years of years companies has been compared and…
Q: This morning, Mariam Inc invested $800,000 to help fund a company expansion project planned for 4…
A: Investment = 800,000 Time Period = 4 years Interest Rate = 4.59%
Q: Athif trading company is a popular distributor in Salala, having operations in the entire Oman. Over…
A:
Q: Gilman's Café is a popular restaurant in a local tourist town. Sarah Gilman, who opened the…
A: a) 1 Income Statement:- Particulars Lunch & Dinner Services Growth in % Dinner Services Only…
Q: When Jack ma started Ali express, he could not make any profit for the first three years. But, he…
A: Determination means the willingness and commitment to continue with the work even if some favourable…
Q: “We really need to get this new material – handling equipment in operation just after the new year…
A: Budget: It is a plan which includes estimation of future expenses or revenues. It is a financial…
Q: The FIFA Company, originally established 16 years ago to make football, is now a leading producer of…
A: Hello. Since you have posted multiple questions and not specified which question needs to be solved,…
Q: The Protek Company has been growing very fast, but profitability has declined from 11.85% to 2.36%…
A: Common size income statement represents each item in income statement as a percentage of total…
Q: Ameen trading company is a popular distributor in the Nizwa region having years of experience in the…
A: Gross profit=Gross profitSale×100
Q: Athif trading company is a popular distributor in Salala, having operations in the entire Oman. Over…
A: Determination of Gross profit Margin and Net profit Margin Formula Gross profit margin = (Gross…
Q: Steve Osbourne is considering opening a business, but the major decision faced is how to organize…
A: Stockholder's Equity - Stockholder's Equity includes the amount contributed by shareholders issued…
Q: You are considering entering the shoe business. You believe that you have a narrow window for…
A: Calculation of Value of Call:The value of call is $3.54.Excel Spreadsheet:
Trending now
This is a popular solution!
Step by step
Solved in 10 steps
- Glencoe First National Bank operated for years under the assumption that profitability can be increased by increasing dollar volumes. Historically, First Nationals efforts were directed toward increasing total dollars of sales and total dollars of account balances. In recent years, however, First Nationals profits have been eroding. Increased competition, particularly from savings and loan institutions, was the cause of the difficulties. As key managers discussed the banks problems, it became apparent that they had no idea what their products were costing. Upon reflection, they realized that they had often made decisions to offer a new product which promised to increase dollar balances without any consideration of what it cost to provide the service. After some discussion, the bank decided to hire a consultant to compute the costs of three products: checking accounts, personal loans, and the gold VISA. The consultant identified the following activities, costs, and activity drivers (annual data): The following annual information on the three products was also made available: In light of the new cost information, Larry Roberts, the bank president, wanted to know whether a decision made two years ago to modify the banks checking account product was sound. At that time, the service charge was eliminated on accounts with an average annual balance greater than 1,000. Based on increases in the total dollars in checking, Larry was pleased with the new product. The checking account product is described as follows: (1) checking account balances greater than 500 earn interest of 2 percent per year, and (2) a service charge of 5 per month is charged for balances less than 1,000. The bank earns 4 percent on checking account deposits. Fifty percent of the accounts are less than 500 and have an average balance of 400 per account. Ten percent of the accounts are between 500 and 1,000 and average 750 per account. Twenty-five percent of the accounts are between 1,000 and 2,767; the average balance is 2,000. The remaining accounts carry a balance greater than 2,767. The average balance for these accounts is 5,000. Research indicates that the 2,000 category was by far the greatest contributor to the increase in dollar volume when the checking account product was modified two years ago. Required: 1. Calculate rates for each activity. 2. Using the rates computed in Requirement 1, calculate the cost of each product. 3. Evaluate the checking account product. Are all accounts profitable? Compute the average annual profitability per account for the four categories of accounts described in the problem. What recommendations would you make to increase the profitability of the checking account product? (Break-even analysis for the unprofitable categories may be helpful.)Paul Duncan, financial manager of EduSoft Inc., is facing a dilemma. The firm was founded 5 years ago to provide educational software for the rapidly expanding primary and secondary school markets. Although EduSoft has done well, the firms founder believes an industry shakeout is imminent. To survive, EduSoft must grab market share now, and this will require a large infusion of new capital. Because he expects earnings to continue rising sharply and looks for the stock price to follow suit, Mr. Duncan does not think it would be wise to issue new common stock at this time. On the other hand, interest rates are currently high by historical standards, and the firms B rating means that interest payments on a new debt issue would be prohibitive. Thus, he has narrowed his choice of financing alternatives to: (1) preferred stock, (2) bonds with warrants, or (3) convertible bonds. As Duncans assistant, you have been asked to help in the decision process by answering the following questions. How does preferred stock differ from both common equity and debt? Is preferred stock more risky than common stock? What is floating rate preferred stock?You are on the leadership team for a small business, XYZ Incorporated. After years of growth, sales have begun to stagnate over the last two years. Sales for XYZ have been constant at $900,000. Net Income was $50,000 last year and is expected to be $30,000 this current year if a change isn't made. XYZ has $85,000 in reserves to cover any shortfall. A change is needed to hopefully revitalize XYZ into a new period of growth. The leadership of XYZ is willing to take out a loan in order to finance this change. The maximum amount of the loan would be $250,000 at 5% interest with payments amortized over 20 years and a balloon payment at the end of 5 years. In working with a consultant, the leadership team has settled on two options that are good candidates for change. Option A will cost the full $250,000. The leadership team has settled on the following probability scenarios. The Total Return at End of 5th Year is based on the $50,000 net income from last year (e.g., 100% return would mean…
- Too little working capital had been a constant problem at Industrial Robotics (IR), a designer of automated manufacturing equipment. But, in 2010, with 47 employees and seven offices across North America, IR faced a cash shortage that threatened to hit $1 million. Founder Jack Miller wasn’t concerned. But his banker, Mario Sarducci, thought that amount was too much for a company barely doing $5 million in sales. Sarducci had worked on the IR file for the previous decade and wanted Miller to reduce his travelling expenses, shrink overhead, maximize profits, and give the bank good financial information. “You’re not running a profitable operation,” Sarducci lectured, “and your balance sheet doesn’t support your credit. My bank has gone as far as it will go.” Indeed, the bank had gone even further. At the end of 2010, IR had overdrawn its $800,000 line of credit by $300,000. If Sarducci had refused to honour those cheques, he would have forced the company to close. But Miller wasn’t…Amman Ltd. is a manufacturing company that produces paper cups and plates in Nizwa. The company was able to sustain a reasonable amount of sales in the last two quarters despite the pandemic-crisis during the last year. However, the company has faced some serious liquidity problems due to delayed payment by the customers and lower sales in the first two quarters. Hence, the company is seriously thinking about revising its working capital standards by considering the changes in the market. The finance manager of the company is seeking your help in assessing the Average payment period from the following financial data. The company had an opening stock of OMR 20,000 during the last year and made a total purchase of 48,000 OMR. The company has returned OMR 3000 worth material due to quality issues. During the last year, the business has paid OMR 6000 as wages and OMR 8000 as salaries. The company sold goods for a total amount of OMR 70,000 of which OMR 30,000 sales was on cash basis.…In early 2008, Doc and Lyn McGee formed the McGee Cake Company. Doc did all the baking, and Lyn handled marketing and distribution. Because of increased sales, Doc left his other job, and Lyn followed shortly. The company hired additional workers to meet demand, but the fast growth led to cash-flow and capacity problems. Doc and Lyn approached a local bank for short-term financial help. What is the nature of the financial problem that Doc and Lyn are facing?
- One of the major advantages of small businesses is that the investment for running the business is not a major issue this statement is a.Fully false b.Partly false c.Fully true d. Partly true In one of the reputed firm total number of employees were more than 150 and the annual sales in 2019 was around 5 million OMR. In 2020 the company had a huge crisis because of the Corona pandemic which leads them to decrease their number of workers to 55, as a cosuquance their annual sales drop to 723,000 OMR. Based on last year data and according to the Ministry of commerce and industry the business will be categorized under a.None of the given options b.Micro business enterprise c.Small business enterprise d.Medium business enterprise Which of the following Statement(s) is/are Correct? Statement 1: Entrepreneurship is a systematic process of applying creativity and innovation to needs and opportunities in the marketplace Statement2: Entrepreneurship involves using old ideas to create a product…“We really need to get this new material-handling equipment in operation just after the new year begins. I hope we can finance it largely with cash and marketable securities, but if necessary we can get a short-term loan down at MetroBank.” This statement by Beth Davies-Lowry, president of Intercoastal Electronics Company, concluded a meeting she had called with the firm’s top management. Intercoastal is a small, rapidly growing wholesaler of consumer electronic products. The firm’s main product lines are small kitchen appliances and power tools. Marcia Wilcox, Intercoastal’s General Manager of Marketing, has recently completed a sales forecast. She believes the company’s sales during the first quarter of 20x1 will increase by 10 percent each month over the previous month’s sales. Then Wilcox expects sales to remain constant for several months. Intercoastal’s projected balance sheet as of December 31, 20x0, is as follows: Cash $ 35,000 Accounts receivable 270,000…Bernice Mountaindog was glad to be back at Sea Shore Salt. Employees were treated well. When she had asked a year ago for a leave of absence to complete her degree in finance, top management promptly agreed. When she returned with a honors degree, she was promoted form administrative assistant (she had been secretary to Joe-Bob Brinepool, the president) to treasury analyst.Bernice thought the company’s prospect were good. Sure, table salt was a mature business, but Sea Shore Salt had grown steadily at the expense of its less well known competitors. The company’s brand name was an important advantage, despite the difficulty most customers had in pronouncing it rapidly.Bernice started work on January 2, 2009. The first 2 weeks went smoothly. Then Mr. Brinepool’s cost of capital to other managers. The memo came as a surprise to Bernice, so she stayed late to prepare for the questions that would surely come the next day. The company’s bank charged interest at current market rates, and the…
- Jarrett Baker is the founder of anenterprise software company located inChevy Chase, Maryland. By looking atthe income statements for Jarrett’s businessover the past three years, you seethat its working capital has declined from$42,400 in 2012 to $17,900 in 2013 to$3,100 in 2014. If this trend continues,in what ways could it jeopardize the futureof Jarrett’s business?The Castillo Products Company was started in 2008. The company manufactures components for personal decision assistant (PDA) products and for other handheld electronic products. A difficult operating year, 2009, was followed by a profitable 2010. The founders (Cindy and Rob Castillo) are interested in estimating their cost of financial capital since they are expecting to secure additional external financing to support planned growth. Short-term bank loans are available at an 8 percent interest rate. Cindy and Rob believe that the cost of obtaining long-term debt and equity capital will be somewhat higher. The real interest rate is estimated to be 2 percent and a long-run inflation premium is estimated at 3 percent. The interest rate on long-term government bonds is 7 percent. A default-risk premium on long-term debt is estimated at 6 percent; plus Castillo Products is expecting to have to pay a liquidity premium of 3 percent due to the illiquidity associated with its long-term…“We really need to get this new material – handling equipment in operation just after the new year begins. I hope we can finance it largely with cash and marketable securities, but if necessary we can get a short-term loan down at Metro bank”. This Statement by Beth Davies –Lowry president of Global Electronics Company, concluded a meeting she had called with the firm ‘s top management. Global is a small, rapidly growing wholesaler of consumer electronic products. The firm’s main product lines are small kitchen appliances and power tools. Maria Wilcox, Global Electronics general manager of marketing has recently completed a sales forecast. She believes the company’s sales during the first quarter of 2021 will increase by 10% each month over the previous month s’ sales. Than Wilcox expects sales to remain constant for several months. Global ‘s projected balance sheet as of Dec 31 2020 is as follow: Cash…