Chapter 2, Problem 2.10EYCT

Doug Washington, the owner of Coyote Printing, is evaluating a printing company in Texas. Stan College, the company's CFO, has just finished his analysis of company. He has estimated that the printing company would be productive for eight years, during which the market would be completely diminished. Stan has taken an estimate of the balance statement and forecast to Hattie May, the company's financial officer. Hattie has been asked by Doug to perform an analysis of the printing company and present her recommendation on whether the company should open the take over the printing company. Hattie May has used the estimates provided by Stan to determine the revenues that could be expected from the printing company. She has also projected the expense of taking over the printing company and the annual operating expenses. If the company takes over the printing company, it will cost $700 million today, and it will have a cash outflow of $75 million nine years from today in costs associated…

You decide to take advantage of the current online dating craze and start your own web site. You know that you have 250 people who will sign up immediately and through a careful marketing research and analysis, you determine that membership can grow by 23 percent in the first two years, 18 percent in year 3, and 18 percent in year 4. How many members do you expect to have at the end of four years? (Round intermediate calculations to 6 decimal places, in all cases round your final answer to the nearest whole number.) Number of members in year 4

You are a marketing executive and your ad agency has come to you with a recommendation for a three-year ad campaign. Due to the length of ad and the timing of when it runs, it is projected to increase sales for your company by $250,000 per year. If the current interest rate is 8%, what would you be willing to pay for this ad campaign?

Using the information in the below paragraph, what is the expected Customer Lifetime Value (CLV) of Eugenia Garcia to Autobarn City Mazda? Eugenia Garcia is a DePaul Driehaus College of Business student majoring in Marketing with a concentration in Sales Leadership. Eugenia graduates at the end of this quarter. Following a successful internship, the previous summer, Eugenia has accepted a full-time job offer with Microsoft in the role of Associate Sales Representative with a starting annual salary of $79,500. Additionally, Eugenia will receive $500 monthly ($6,000 total annually) as a car allowance plus 72 cents per mile traveled for work given the need for Eugenia to visit customers in person across her sales territory in the Chicago metro area. Eugenia's new job starts two weeks following graduation during the same week Eugenia celebrates her 23rd birthday with family and friends. Like most urban college students, Eugenia has not owned a car while attending DePaul. Instead, she has…

Consider the following thoughts of a manager at the end of the companys third quarter: If I can increase my reported profit by 2 million, the actual earnings per share will exceed analysts expectations, and stock prices will increase. The stock options that I am holding will become more valuable. The extra income will also make me eligible to receive a significant bonus. With a son headed to college, it would be good if I could cash in some of these options to help pay his expenses. However, my vice president of finance indicates that such an increase is unlikely. The projected profit for the fourth quarter will just about meet the expected earnings per share. There may be ways, though, that I can achieve the desired outcome. First, I can instruct all divisional managers that their preventive maintenance budgets are reduced by 25 percent for the fourth quarter. That should reduce maintenance expenses by approximately 1 million. Second, I can increase the estimated life of the existing equipment, producing a reduction of depreciation by another 500,000. Third, I can reduce the salary increases for those being promoted by 50 percent. And that should easily put us over the needed increase of 2 million. Required: Comment on the ethical content of the earnings management being considered by the manager. Is there an ethical dilemma? What is the right choice for the manager to make? Is there any way to redesign the accounting reporting system to discourage the type of behavior the manager is contemplating?

Acme Semiconductor is expanding its facility and needs to add equipment. There are three process tools under consideration. You have been asked to perform an economic analysis to select the most appropriate tool to acquire. You have gathered the following information for evaluation. Each of these tools has a useful life of seven years. Acme’s accounting staff has established a company-wide MARR of 8% per year.Which one of the process tools should be selected?

Based on this table below write a business memo addressed to the president recommending the best course of action based on your analysis. In your memo, discuss changes in break-even points, and impacts to the operating leverage. Including a table summarizing your findings would be appropriate. The company’s long-range plan is to grow sales to 250,000 units in the next two to three years. In your memo, summarize the advantages and disadvantages of each of the alternatives. Critically evaluate the alternatives based on current market conditions and any impact each alternative may have on the long-range plan. Write a business memo addressed to the president recommending the best course of action based on your analysis. In your memo, discuss changes in break-even points, and impacts to the operating leverage. Including a table summarizing your findings would be appropriate. The company’s long-range plan is to grow sales to 250,000 units in the next two to three years. In your memo,…

Describe the activities of any small business you know or are familiar with (e.g. physical,online). Using the framework for designing annual objectives, discuss how the smallbusiness in question will apportion annual objectives to its staff and control the process

The corporate you work for has asked for a summary and report of the future projections for the next 5 years. With the help of the CFO, you have put together the following preliminary figures based on the last year's numbers for a planned production and sales level of 4,000 units per year. Building depreciation            $200,000 per year Machine operator                  $100,000 per year Management staff.               $400,000 per year Direct materials                     $4,000,000/year. Other expenses that seem to vary based on production levels.                  $3,000,000/year. Other expenses that doesn't seem vary.    $1,300,000/year. Selling price per unit.          $5,0000/ unit.   Utilities. You have the following data to which you pay for the high-low method. .when there is no production, utility costs are $20,000/month. . When production levels reached 4,000 units, unit cost totalled $40,000 per month. 1.calculate the contribution margin per unit. 2. Calculate…