Question

. Ortel Telecom sells telecommunication products and services to a variety of small businesses. Two of Ortel’s key clients are Square and Cloudburst, both fast-growing technology start-ups located in New York City. Ortel has compiled information regarding its transactions with Square and Cloudburst for 2017, as well as its expectations regarding their interactions over the next 3 years: (in pic)

Ortel’s transactions with Square and Cloudburst are in cash. Assume that they occur at year-end. Ortel is headquartered in the Cayman Islands and pays no income taxes. The owners of Ortel insist on a required rate of return of 12%.

Q. Based on the net present value from cash flows over the next 3 years, is Cloudburst or Square a more valuable customer for Ortel?
 

Home
Insert
Page Layout
Formulas
Data
Review
A
в
Expected Annual
Percentage Increase
2017
Cloudburst
Square
Cloudburst
Square
$567,000 $3,510,000
$364,800 $3,060,000
$202,200 $ 450,000
3 Sales Revenues
Cost of Sales
6%
5%
5.5%
4.5%
5 Net cash flow
4,
Expand
Transcribed Image Text

Home Insert Page Layout Formulas Data Review A в Expected Annual Percentage Increase 2017 Cloudburst Square Cloudburst Square $567,000 $3,510,000 $364,800 $3,060,000 $202,200 $ 450,000 3 Sales Revenues Cost of Sales 6% 5% 5.5% 4.5% 5 Net cash flow 4,

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Financial Management

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: How would I record the statement of cash flow?

A: Cash flow from operating activities are those activities which are inherently important to the core ...

Q: Acme Company recently introduced a new bonus plan for its corporate executives. The company believes...

A: Given information is: Acme Company recently introduced a new bonus plan for its corporate executives...

Q: Equivalent Units of Materials Cost The Rolling Department of Oak Ridge Steel Company had 4,400 tons ...

A: Compute the equivalent units for direct materials.

Q: Acme Company recently introduced a new bonus plan for its corporate executives. The company believes...

A: Click to see the answer

Q: Cocoa Mill Chocolates manufactures specialty chocolates and sells them to fine candy stores. The com...

A:  

Q: Zuzu is a large manufacturer of snack cakes. The company operates distribution centers in Chicago. T...

A: Introduction Accounting Controls are methods implemented by the organisations to ensure that financi...

Q: 3.SL. Journalise the following transactions in the books of a trader: 1984 Rs: 1984 Rs. Dec. 1 Start...

A: Journal entries: journal entry is recorded for every business transaction. It is the first step in a...

Q: Could you help me find the activity cost per unit

A: Activity based costing is a method of costing wherein, the allocation of overheads involved in produ...

Q: Kavita and Lalit are partners sharing profits in the ratio of 2:1. They decide to admit Mohan with s...

A: Admission of partner: When firm requires additional capital or managerial assistance or both for the...

Q: Rahul, Rohit and Karan started partnership business on April 1, 2016 with capitals of Rs. 20,00,000,...

A: Note: The total interest on capital of these partners is more than the profit for the year. If inter...

Q: Kansas City Castings (KCC) is attempting to obtain the maximum loan possible using accounts receivab...

A: a. Calculate the accounts that will be acceptable and calculate the total dollar amount of accounts ...

Q: Why is it important to adopt a consistent basis for the preparation of financial statements? Explain...

A: Definition:   Financial statements: Financial statements are condensed summary of transactions commu...

Q: The following information pertains to Skylark Manufacturing Corporation for the year ended December ...

A: Step 1 The calculated amount of production costs of the goods which are manufactured during the acco...

Q: ABC issued 10,000 common shares with a par value of $ 5 and a market value of $ 25 per share along w...

A: The correct answer is Option (a).

Q: Ch. 8 Homework Question 6 Please answer and solve the following Each visor requires a total of $4.00...

A: 1. Determine Shadee’s budgeted manufacturing cost per visor. 

Q: Emma Co. sold to Isabella Co. merchandise on account FOB shipping point, 1/10, net 30, for $11,700. ...

A: Solution) Date Particulars Debt Credit   Accounts Payable. Emma Co. A/c  11,700     Fright in...

Q: Josh and Krish are partners sharing profits and losses in the ratio of 3:1. Their capitals at the en...

A: Interest on capital is always calculated on opening balance of capital and if any additional capital...

Q: The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean C...

A: Thus, the amount of total assets reported is $1,520,000.  

Q: Explain the total sales volume variance for a period. How can this total variance be decomposed?

A: Sales volume variance: Sales volume variance is the measure of change in profit due to the differenc...

Q: The management accountant at L & P Merchandising & More, Michael Stona, is in the process of...

A: The Budget for the quarter ending December 31,2020 is as follows:

Q: A high tech company reported sales of $220,000, cost of goods sold of $150,000 and inventory of $60,...

A: Solution: Gross Profit is Sales minus Cost of goods sold. Sales - Cost of goods sold = Gross profit ...

Q: The following are selected transactions of Vaughn Company. Vaughn prepares financial statements quar...

A: Date Account title and explanation Debit ($) Credit ($) Jan. 2 Merchandise inventory $40,000   ...

Q: Haynes, Inc., obtained 100 percent of Turner Company’s common stock on January 1, 2017, by issuing 9...

A:   1.  

Q: Warranty liability is an estimate based on past warranty claims. How might a company determine how m...

A: Warranty Liability  MEANING : A warranty is a guarantee that a company will replace or fix a defecti...

Q: Which transfer-pricing method(s) will maximize the after-tax operating income per unit of Tech Frien...

A: Each Division is a profit Centre After-Tax operating income per division: For Market Price Method

Q: Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data for prepaid cell phone...

A: FIFO Method:   FIFO is stands for First-in, first-out. Under this method, the oldest costs will be t...

Q: Beacon, a division of Libra Corporation, is located in the United States. Its effective income tax r...

A: Transfer pricing refers to procedure or technique used for pricing transactions between enterprises ...

Q: Explain the relationship between the costs of flexible and committed resources, usage of resources, ...

A: Cost accounting system: Cost accounting system of an organization consists of procedures and techniq...

Q: During 2020, Empresas ABC issued 4,000 preferred shares with a par value of $ 10 to $ 11 each. Each ...

A: Compute total number of common shares converted from preferred share options as shown below:  

Q: What is meant by ‘Issue of debenture at discount and redeemable at premium?

A: Bonds:   Bonds are debt instruments issued by the borrower company to its lenders. Bonds are issued ...

Q: Jayhawk Company reports current E&P of $310,000 and accumulated E&P of negative $282,500. Ja...

A: Jayhawk is distributing $505,000 to its sole shareholder. Below are the balances available with Jayh...

Q: At the end of the current year, Accounts Receivable has a balance of $90,000; Allowance for Doubtful...

A: a) The amount of the adjusting entry for uncollectible accounts are ($300,000 x 2.5%) $7,500.00

Q: Variable versus absorption costing. The Tomlinson Company manufactures trendy, high-quality, moderat...

A: 1. Income statement under variable costing:

Q: A v2.cengagenow.com Inbox (229) - ilopezau@my.chemeketa.edu. Google Docs Mind Tap - Cengage Learning...

A: Job Costing: Job costing is a process of recording the cost on the basis of manufacturing job instea...

Q: These expenditures were incurred by Blossom Company in purchasing land: cash price $55,000, assumed ...

A: Property, Plant, and Equipment or PP&E is a classification shown on a balance sheet. It normally...

Q: Q.The Kuhl Brothers ask you whether they should buy the new machine. To help in your analysis, calcu...

A: New machine: Substitute $18,000 for estimated disposal value as on December 31, 2021, 25% for tax r...

Q: Describe two disclosures required by the SEC with respect to executive compensation

A: Financial Disclosures: Financial disclosures refer to all material, significant and relevant informa...

Q: what is the difference in accounting between "partial equity" and "full equity"?

A: Full Equity method- When the acquiring company acquires a significant stake in equity of another com...

Q: the company paid $750,000 to buy a collection of asset. the asset had the following appraised values...

A: The amount paid to buy collection of asset which is also called as basket purchase is to be allocate...

Q: The marketing segment sales for Caterpillar Inc. (CAT) for a recent year follow:   Caterpillar In...

A: a)   

Q: What does a “downstream” sale of inventory refer to and when is the profit recognized?

A: Downstream sale of inventory: When a parent company transfer goods to any of its subsidiaries, it is...

Q: The Kelly-Elias Corporation, manufacturer of tractors and other heavy farm equipment, is organized a...

A:  

Q: Ch. 8 Homework 2 Please solve and explain the following problem Croy Inc. has the following projecte...

A: Budget production cost as follows: Formulas:

Q: What accounts are used to recognize a retailer's purchase from a manufacturer on credit? Assume the ...

A: Perpetual inventory system is a method under which the movement of inventory is recorded at continuo...

Q: Which of the following events or transactions has NO effect on retained earnings? a. Net income. b. ...

A: The correct answer is Option (c).

Q: Good afternoon

A: Given infornation is: Sale made to Enkins Office Supply co. = $9000 (a) Journal entry for sale Da...

Q: Excellent Motor Company makes electric cars and has two products, the Simplegreen and the Excellentg...

A: Residual Income: Residual income is the leftover amount of total income of an individual after the p...