Verstappen Motor Holdings is preparing its budget for the year ended 31 March 2022. The following information for the last six months has been prepared: Month April May June July August September REQUIRED: Cars Sold 20 40 25 34 45 42 Warranty claim expenses R 12 000 15 800 12 600 14 400 16 000 20 000 Q.3.2 If Verstappen Motor Holdings is budgeting to sell 50 cars, what will the total warranty cost be that they are likely to incur?
Q: Joe is a new investor and has been closely watching a company by the name of USA Ltd., a…
A: Beta for USA ltd is 1.9 times. It means that If the overall market rises/falls by 1%, then USA ltd…
Q: Hudson Corporation will pay a dividend of $4.70 per share next year. The company pledges to increase…
A: Current value = Next dividend / (Required rate of return - constant growth rate) Where Next dividend…
Q: to maturity. Today, the YTM on your bond is 6%. With this information, can you calculate the current…
A: Price of bond is the present value of coupon payment and the present value of the par value of bond…
Q: (Related to Checkpoint 9.2) (Yield to maturity) The market price is $1,125 for a 17-year bond…
A: Information Provided: Market price = $1125 Bond maturity = 17 years Par value = $1000 Annual Coupon…
Q: enny takes out a new car loan for $41,000 at 5% annual interest rate for 5 years. a. What is…
A: Loan Amount is $41,000 Annual Interest rate is 5% Interest rate is 5 years To Find: Monthly…
Q: Nico bought 100 shares of Cisco Systems stock for R24.00 per share on January 1, 20019. He received…
A: Total dividend received (D) = 2 + 3 + 4 = 9 Sale price (SP) = 18 Purchase price (PP) = 24 Holding…
Q: A bond makes annual coupon payments of R75. The bond matures in four years, has a par value of…
A: Here, To Find: Yield to maturity (YTM) =?
Q: Which of the following statements about speculation is true? A) Society is worse off with…
A: Speculation: Speculation refers to act of taking a position on the prices of commodities,…
Q: You expect to have $12,000 in one year. A bank is offering loans at 5.5% interest per year. How much…
A: In this question we have to calculate present value of $ 12,000 in one year at 5.5% interest rate.…
Q: Given i(4) = 3.150%, find the equivalent effective bi-weekly rate. O a. 0.11592% O b. 0.11954% O c.…
A: Interest rate (r) = 3.15% Number of compounding in a year (n)= 4 Effective annual rate =…
Q: Rajesh would like to buy his first car and the one he has his eye on is $25,000, plus an extra 13%…
A: 1)weekly Payment to be made Solved using Financial Calculator PV = 28,250 N = 8 years * 52 weeks =…
Q: Matterhorn Corporation stock currently sells for $80 per share. The market requires a return of 9.8…
A: The current price of stock is $80 per share Required rate of return is 9.8% Growth rate is 2.9%
Q: The Gordon growth model (only one possible answer) uses earnings, but not the dividends for…
A: The Gordon Growth Model, often known as the dividend discount model, is a stock valuation technique…
Q: The following pieces of information are available from the current period financial statements: Net…
A: Given, Net Income = P150,000 Amortization Expense = P28,000 Increase in Supplies = P16,000 Decrease…
Q: (Related to Checkpoint 9.2) (Yield to maturity) Abner Corporation's bonds mature in 17 years and pay…
A: Solution:- Bond price means the price at which the bond is currently trading in the market. It is…
Q: (Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation) The 15-year $1,000 par bonds of Vail…
A: Given, The par value of bond is $1000 Coupon rate is 13% Current price of bond is $1,060 The yield…
Q: Lucy Corporation is a calendar-year taxpayer with the following income and expense items for the…
A: Data given: Gross profit from sales 300000 Dividend received 30000 Salary expense 150000…
Q: At a recent company meeting, Geraldine Erwin, sales manager of Dastoria, a flavored-beverage…
A: Value of sales today is calculated using following equation Value of sales today = Sales six months…
Q: This question assumes the standard mean-variance utility function. You are allocating your…
A: Minimum variance portfolio helps in ascertaining a portfolio which has highest return for a given…
Q: Currently, the balance of your savings account is $2,200. You have always earned an annual interest…
A: Here, To Find: Number of years =?
Q: The financial staff of Cairn Communications has identified the following information for the first…
A: Projected sales are $22million Operating cost is $7million Depriciation is $4million Interest…
Q: 3. Don Magellan borrowed today from Ginoong Lapulapu P300,000.00 and agreed to repay the loan with 4…
A: Loan amount (PV) = P300,000 Number of monthly payments (n) = 4 Interest rate = 12% Monthly interest…
Q: An executive has two application options to follow. What's the best? a) 150% p.a. capitalized…
A: Interest Rate = 150% p.a. capitalized monthly Interest Rate = 200% p.a. compounded semiannually
Q: Fegley, Incorporated, has an issue of preferred stock outstanding that pays a dividend of $6.95…
A: Preferred Stock refers to that type of stock which possess the features of both equities and debt.…
Q: Vince Oliver plans to invest P30,000 in municipal bonds, savings bonds,and treasury bills. He wishes…
A: Given Information - Total amount of Investment = P 30,000 Modes of Investment along with Interest…
Q: Don Magellan borrowed today from Ginoong Lapulapu P300,000.00 and agreed to repay the loan with 4…
A: Loans are any type pf financial credit facility in which a sum of money is lent by one party to…
Q: Mary Cooper, Sheldon's mother, who lives in east Texas, wants to help pay for her grandchild's…
A: Information Provided: Future value = $295,000 Annual investment = $10,000 Interest rate = 6%
Q: Integrative: Complete investment decision With the market price of gold at C$1,562.50 per ounce (CS…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Felix is keen to apply his finance knowledge to his real-life investment goals. He is currently 19…
A: Present Value: The present value (PV) is the present sum of a series of fixed payments. The series…
Q: (Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation relationships) The 17-year, $1,000…
A: Time Period 17 Par Value $ 1,000.00 Coupon Rate 11% Market Price $ 855.00 Required…
Q: You invested $5,000 in an account 16 years ago. This account paid 8% compounded monthly for the…
A: Given, Amount invested is $5,000 Term is 16 years
Q: Katie has taxable income of $45,000. She is single and her tax rates are 10% on the first $7,000 of…
A: The tax rate may differ from one taxpayer to another because tax depends on filing status and…
Q: Your firm successfully issued new debt last year, but the debt carries covenants. Specifically,…
A: The quick ratio refers to the ratio which is helpful in the measurement of the capacity of a company…
Q: How can you know whether a project will be profitable? What purpose does TCO serve?
A: The management evaluates the project before accepting the project, the management has to decide…
Q: Burt's TVs has current liabilities of $24.8 million. Cash makes up 39 percent of the current assets…
A: Current assets refer to those assets that are expected to be converted to cash in less than 12…
Q: Construct a differential equation for the changing mortgage balance. (Equation Must include r, A, P,…
A: We have to find the differential equation for the changing mortgage balance. All the relevant…
Q: Aya and Sakura would like to buy a house and their dream home costs $500,000. Their goal is then to…
A: First we will calculate the monthly payment amount: We will calculate so with help of PMT function…
Q: Synovec Company is growing quickly. Dividends are expected to grow at a rate of 22 percent for the…
A: First, we will find dividend of first three years Dividend paid(D0) =1.30 D1=D0*(1+G) Where G=…
Q: kenneth just graduated from college and has started his fisrt job in sales. basedd on conversation…
A: The debt-to-income ratio refers to the comparison of the monthly debt payment and gross monthly…
Q: Need help with finance homework. 4 Assume that today you invested $120,000 in an investment that…
A: Rate of return earned depends on the how much is earned above the initial investment considering the…
Q: 10._____ markets and ______ markets are classifications of financial markets. Spot; future. Money;…
A: Financial markets: Any marketplace where securities are traded is referred to as a financial market,…
Q: A 6 month Treasury bill is currently yielding 0.15 percent.A BBB-rated bond with similar term is…
A: 6 month treasury bill Current yield – 0.15% Similar bond yield – 18.24% Expected loss in case of…
Q: You want to endow a scholarship that will pay $13,000 per year forever, starting one year from now.…
A: We need to donate the amount equal to the present value of future scholarship payments, since the…
Q: Khiel wants to buy a car that costs $10,000, plus an extra 13% HST for a total price of $11,300. The…
A: Solved using Financial Calculator 1) Monthly payment to be made Pv = 11,300 N = 8 Years * 52 weeks…
Q: Baker Industries’ net income is $24000, its interest expense is $4000, and its tax rate is 45%. Its…
A: ROE means return on equity, means how much net income has been generated on common equity of the…
Q: Burnett Corporation pays a constant $22 dividend on its stock. The company will maintain this…
A: Given Dividend is $22 term is 13 years Required return is 7%
Q: The back of the book says the answer should be $7,413. Do you know what there would be a…
A: As per the given information: EOYCash flow0-$30,0001$6,0002$13,5003$X4$13,500 MARR - 12% per year To…
Q: Required information You need $6,000 on 4/1/2016 and you have two options. Option A: Borrow money…
A: A loan refers to the amount that is being given to the borrower by the lender in exchange if the…
Q: You want to endow a scholarship that will pay $6,000 per year forever, starting one year from now.…
A: Annual payment (C) = $6000 Discount rate (r) = 0.07 or 7% in first case Amount need to donate today…
Q: A high level of financial leverage exposes firms to default risk. However, as a result of it,…
A: Financial leverage is related to the capital structure of company and it is very important for the…
Step by step
Solved in 4 steps
- Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of product to equal 20 percent of the next months unit sales. Beginning inventory in January was 3,100 practice soccer balls and 400 match soccer balls. Required: 1. Construct a production budget for each of the two product lines for FlashKick Company for the first three months of the coming year. 2. What if FlashKick wanted a production budget for the two product lines for the month of April? What additional information would you need to prepare this budget? FlashKick Company manufactures and sells soccer balls for teams of children in elementary and high school. FlashKicks best-selling lines are the practice ball line (durable soccer balls for training and practice) and the match ball line (high-performance soccer balls used in games). In the first four months of next year, FlashKick expects to sell the following: Required: 1. Construct a sales budget for FlashKick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter. 2. What if FlashKick added a third linetournament quality soccer balls that were expected to take 40 percent of the units sold of the match balls and would have a selling price of 45 each in January and February, and 48 each in March? Prepare a sales budget for Flash- Kick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter.A. Discuss the purpose of the cash budget. B. If the cash for the first quarter of the fiscal year indicates excess cash at the end of each of the first two months, how might the excess cash be used?Forecast sales volume and sales budget Sentinel systems Inc. prepared the following sales budget for 20Y8: At the end of December 20Y8, the following unit sales data were reported for the year: Unit Sales Home Alert System Business Alert System United States 1,734 1,078 Europe 609 329 Asia 432 252 For the year ending December 31, 20Y9, unit sales are expected to follow the patterns established during the year ending October 31, 20Y8. The unit selling price for the Home: Alert System is expected to increase to 250, and the unit selling price for the Business Alert System is expected to be increased 820, effective January 1, 20Y9. Instructions 1. Compute the increase or decrease.ase of actual unit sales for the year ended October 31, 20Y8, over budget. Place your answers in a columnar table with the following format: 2. Assuming that the increase or decrease in actual sales to budget indicated in part (1) is to continue in 20Y9, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 20Y9. Place your answers in a columnar table similar to that in part (1) but with the following column heads. Round budgeted units to the nearest unit. 20Y8 Percentage 20Y9 Actual Increase Budgeted Units (Decrease) Units (rounded) 3. Prepare a sales budget for the year ending December 31, 201Y9
- a. Discuss the purpose of the cash budget. b. If the cash for the first quarter of the fiscal year indicates excess cash at the end of each of the first two months, how might the excess cash be used?A companys controller is adjusting next years budget to reflect the impact of an expected 3 percent inflation rate. Listed below are selected items from next years budget before the adjustment. After adjusting for the 3 percent inflation rate, what is the companys total budget for the selected items before taxes for next year? a. 858,150 b. 860,412 c. 810,971 d. 858,971Communication The city of .Milton has an annual budget cycle that begins on July 1 and ends on June 30. At the beginning of each budget year, an annual budget is established for each derailment. The annual budget is divided equally among the 12 months to provide a constant monthly italic budget. On June 30, all unspent budgeted monies for the budget year from the various city departments must be "returned" to the General Fund. Thus, if department heads tail to use the It budget by year-end, they will lose it. A budget analyst prepared a chart of the difference between the monthly actual and budgeted amounts for all departments in a recent fiscal year. The chart wav as follows: Write a memo to Stacy Poindexter, the city manager, interpreting the chart and suggesting improvements to the budgeting system.
- CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2014 and 2015: May 2014 180,000 June 180,000 July 360,000 August 540,000 September 720,000 October 360.000 November 360,000 December 90,000 January 2015 180.000 Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: May 2014 90,000 June 90,000 July 126,000 August 882.000 September 306,000 October 234,000 November 162,000 December 90,000 General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation charges are 36,000 a month. Miscellaneous expenses arc S2,700 a month. Income tax payments of 63,000 arc due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2014. b. Prepare monthly estimates of the required financing or excess funds that is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 130 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal; and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2016 and 2017. May 2016 180,000 June 180,000 July 360,000 August 540,000 September 720,000 October 360,000 November 360,000 December 90,000 January 2017 180,000 Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale. 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: May 2016 90,000 June 90,000 July 126,000 August 882,000 September 306,000 October 234,000 November 162,000 December 90,000 General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depredation charges are 36,000 a month. Miscellaneous expenses are 2,700 a month. Income tax payments of 63,000 are due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2016. b. Prepare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1/30 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal; and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if ail financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2015 and 2016: May 2015 180,000 June 180,000 July 360,000 August 540,000 September 720,000 October 360,000 November 360,000 December 90,000 January 2016 180,000 Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: May 2015 90,000 June 90,000 July 126,000 August 882,000 September 306,000 October 234,000 November 162,000 December 90,000 General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation charges are 36,000 a month. Miscellaneous expenses are 2,700 a month. Income tax payments of 63,000 are due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2015. b. Prepare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1 30 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal; and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.
- Forecast sates volume and sales budget For 20Y8, Raphael Frame Company prepared the sales budget that follows. At the end of December 20Y8, the following unit sales data were reported for the year: Unit Sales 8" 10" Frame 12" 16" Frame East 8,755 3,686 Central 6,510 3,090 West 12,348 5,616 For the year ending December 31, 20Y9, unit sales are expected to Follow the patterns established during the year ending December 31, 20Y8. The unit selling price for the 8" 10" the frame is expected to Increase to 17 and the unit selling price for the 12" 16" frame is expected to increase to 32, effective January 1, 20Y9. Instructions 1. Compute the increase or decrease of actual unit sales for the year ended December 31,. 20Y8, Over budget. Place your answers in a columnar table with the following format: 2. Assuming that the increase or decrease in actual sales to budget indicated in part (1) is to continue in 20Y9, compute the unit sales volume to lie used for preparing the sales budget for the year ending December 31, 20Y9. Place your answers in a columnar table similar to that in part (1) but with the following column heads. Round budgeted units to the nearest. 20Y8 Percentage 20Y9 Actual Increase Budgeted Units (Decrease) Units (rounded) 3. Prepare a sales budget for the year ending December 51. 20Y9.Budgeted income statement and supporting budgets The budget director of Feathered Friends Inc., with the assistance of thee controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for December: A. Estimated sales for December Bird house....................... 3,200 units at 50 per unit Bird feeder....................... 3,000 units at 70 per unit B. Estimated inventories at December 1: Direct materials Finished products: Wood............ 220 ft Bird house........ 320 units at 27 per unit Plastic............ 240 ft Bird house........ 270 units at 40 per unit C. Desired inventories at December 31: Direct materials Finished products: Wood............ 220 ft Bird house........ 290 units at 27 per unit Plastic............ 200 ft Bird house........ 205 units at 41 per unit D. Direct materials used in production: In manufacture of Bird House: In manufacture of Bird Feeder: Wood............ 0.80 ft. per unit of product Wood........ 1.20 ft. per unit of product Plastic............ 0.50 lb. per unit of product Plastic......... 0.75 lb. per unit of product E. Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood 7.00 per ft Plastic 1.00 per lb. F. Direct labor requirements: Bird House: Fabrication Department...................... 0.20 hr. at 16 per hr. Assembly Department........................ 0.30 hr. at 12 per hr. Bird Feeder: Fabrication Department...................... 0.40 hr. at 16 per hr. Assembly Department........................ 0.35 hr. at 12 pr hr. G. Estimated factory overhead costs for December: Indirect factory wages 75,000 Depreciation of plant and equipment 23,000 Power and light 6,000 Insurance and property tax 5,000 H. Estimated operating expenses for December: Sales salaries expense 70,000 Advertising expense 18,000 Office salaries expense 21,000 Depreciation expenseoffice equipment 600 Telephone expenseselling 550 Telephone expenseadministrative 250 Travel expenseselling 4,000 Office supplies expense 200 Miscellaneous administrative expense 400 I. Estimated other income and expense for December: Interest revenue200 Interest expense122 J. Estimated tax rate: 30% Instructions 1. Prepare a sales budget for December. 2. Prepare a production budget for December. 3. Prepare a direct materials purchases budget for December. 4. Prepare a direct labor cost budget for December. 5. Prepare a factory overhead cost budget for December. 6. Prepare a cost of goods sold budget for December. Work in process at the beginning of December is estimated to be 29,000, and work in process at the end of December is estimated to be 35,400. 7. Prepare a selling and administrative expenses budget for December. 8. Prepare a budgeted income statement for December.