Chapter 1, Problem 1CC

John Snow has recently retired, and he received a large lump sum settlement from his employer. He would like to invest this money to achieve a stable long term income. He is considering investing in the following two companies: Allied Grocers (AG) are a 3-year-old online grocery retailer that specializes in delivering a wide selection of quality food products through an online platform. Beta Solutions (BS) is an established 10-year-old electronics company that is known for selling the most innovative electronic products and software solutions. Selected financial data for 2019   AG BS Average total assets 1,500,000 4,000,000 Average # of common shares outstanding (no preferred shares) 10,000 10,000 Dividends paid 10,000 50,000 Current Market price per share $95 $165   Net sales 1,300,000 6,300,000 Cost of goods sold 900,000 4,200,000 Gross profit 400,000 2,100,000 Operating Expenses:        Administrative…

Jonathan Lark's lifelong dream is to own a restaurant. He owns a premium site for a restaurant across the street from the local university. Now he needs to decide what kind of restaurant to open. Recently, Jonathan began to investigate one of the fastest growing fast-food franchises in the country, Pepper Roni Pizza. A Pepper Roni Pizza franchise costs $81.600, an amount that is amortized over 15 years. As a franchisce, Jonathan would need to adhere to the company's building specifications. The building would cost an estimated $1.224,000 and would have a $136,000 salvage value at the end of its 15-year life. The restaurant equipment (fryers, steam tables, booths, counters) is sold as a package by the corporate office at a cost of $200.000, will have a salvage value of $27.200 at the end of its five-year life, and must be replaced every five years Jonathan estimates the annual revenue from a Pepper Roni Pizza tranchise at $2,584.000. Food costs typically run 36% of revenue. Annual…

Kate Collins has always been good at putting together rhymes for any occasion. Kate is a recent college graduate with a double major in business and art. Kate has always had a bit of an entrepreneurial streak and has decided to open her own business designing and selling greeting cards. Kate decided that she would rent a small studio where she would design the cards on a new Apple iMac that she is planning to purchase. Kate also decided to offer classes in greeting card design to other aspiring greeting card producers. After much thought, Kate decided to name her business “Kate’s Cards.” SEPTEMBER 2019: In September 2019, Kate incorporated Kate’s Cards after investigating different organizational forms, and began the process of getting her business up and running. The following events occurred during the month of September 2019: Kate deposited $10,000 that she had saved into a newly opened business checking account. She received common stock in exchange. Kate designed a brochure that…