The Card Shoppe needs to maintain 18 percent of its sales in net working capital. Currently, the store is considering a four-year project that will increase sales from its current level of $279,000 to $308,000 the first year and to $314,000 a year for the following three years of the project. What amount should be included in the project analysis for net working capital in Year 4 of the project?

Answers

Answer 1
Answer:

Answer:

$56,520

Explanation:

As per given data

Year     Sales          Working Capital 18%

   0      $279,000   ($50,220)

   1       $308,000   ($5,220)

   2      $314,000    ($1,080)

   3      $314,000    $0

   4      $314,000   $56,520

As the sales value of year 2, 3 and 4 are same, as capital is adjusted in year 2 and company has equal working capital required in year 3, years 4 is the last year of the project so, working capital will be recovered from the project

Net Working capital will be reimbursed at the end of the project. The accumulated value of investment in working capital will be recorded as cash inflow in the analysis.


Related Questions

Colter Steel has $5,600,000 in assets. Temporary current assets $ 3,200,000 Permanent current assets 1,610,000 Fixed assets 790,000 Total assets $ 5,600,000 Short-term rates are 10 percent. Long-term rates are 15 percent. Earnings before interest and taxes are $1,180,000. The tax rate is 20 percent. If long-term financing is perfectly matched (synchronized) with long-term asset needs, and the same is true of short-term financing, what will earnings after taxes be
A company purchased a building for $900,000 by obtaining a 30-year mortgage payable. Assume the lending arrangement specifies that the company will pay $20,000 of the principal over the first year, $30,000 in the second year, and the remainder evenly over the final 28 years. What amount of the $900,000 would be classified as a long-term liability at the time the mortgage payable is obtained
IIIYou have been asked to prepare the final accounts forW Smith, a sole trader, for the year ended 31 December2013. W Smith has forwarded to you all books of primeentry and ledgers, and in addition has given you thefollowing information:1) Mr Smith had taken £2,000 out of the business bankaccount to take his wife on holiday.ii) Up to last year the machinery and vehicle used inthe business had been depreciated using the reducingbalance method. W Smith thinks that they should nowbe depreciated using the straight-line method.iii) Mr Smith is confident, given his order book thatthe business will continue to operate in its presentform for many years.iv) Mr Smith had purchased ten staplers, four flipcharts and four packets of whiteboard markers whichwill be used in the business for the next couple ofyears.V)Mr Smith informs you that he has just found anunopened electricity bill for £900 which was for thequarter October to December 2013RequiredIn each case, identify and then explain the mainaccounting concepts being highlighted and indicatehow each should be treated in the final accounts.​
A marketing channel is defined as a group of individuals and organizations that ______.(A) takes title to products and resells them.(B) manages transportation and warehousing functions.(C) consumes about one-half of every dollar spent on products in the United States.(D) links producers to other marketing intermediaries.(E) directs the flow of products from producers to customers.
Difference between sole proprietorship and llc

Lilla sees a search ad on her mobile phone for a restaurant. A button on the ad allows Jessica to click on the button and call the restaurant. This is a

Answers

Answer: Click-to-call ad

Explanation:

From the question, we are informed that Lilla sees a search ad on her mobile phone for a restaurant and a button on the ad allows Jessica to click on the button and call the restaurant.

It should be noted that the above is a click-to-call ad. They are form of Google Ads that when someone clicks them, it calls the business directly rather than linking to the website of the business. They are important to marketing campaigns.

Crystal Glassware Company issues $1,042,000 of its 14%, 10-year bonds at 97 on February 28,2019. The bonds pay interest on February 28 and August 31. Assume that Crystal uses thestraight-line method for amortization. What net amount will be reported for the bonds on theAugust 31, 2019 balance sheet?A) $1,010,740 B) $1,012,303 C) $1,009,177 D) $1,042,000

Answers

Answer:

The correct option is B. $1,012,303

Explanation:

For computing the net amount, the following calculations are need to be done which is shown below:

1. Calculation the total value of bond which equals to

= Issue amount × price

= $1,042,000 × (97 ÷ 100)

= $1,010,740

2. Now compute the discount which shown below:

= Issue amount - total value

= $1,042,000 - $1,010,740

= $31,260

3. Then, compute the semiannual discount amount by applying the straight line method

= Discount value ÷ number of years

where,

number of year would be multiply by 2 = 2 × 10 = 20 years

So, the value would be equal to

= $31,260 ÷ 20 years

= $1,563

4. So, the net amount would be

= Total value of bond + semiannual discount

=  $1,010,740 +  $1,563

= $1,012,303

Hence, the net amount will be reported for the bonds on the August 31, 2019 balance sheet is $1,012,303

Therefore, the correct option is B. $1,012,303

Hiring managers should automatically preclude a candidate with a disability if they appear to be unable to do the job.True or false?

Answers

Answer:

True

Explanation:

I believe it's true. If we have a job opening for sales personnel and candidate is physically unable to walk or drive, then yes we can exclude that candidate. But once hiring manager is sure of the fact that disability will render that candidate unable to work then manager can preclude that candidate.

Common Stock is 2.5 million shares with a current price of $42 per share; the beta of the stock is 1.34; the standard deviation of the stock is 10.5%. Market: The US Treasury bill is yielding 2.8% and the expected return on the market is 11.2% and the expected return on the market is 11.2%. The corporate tax rate is 38%. What is the firm's cost of equity

Answers

Answer:

the firm's cost of equity is 17.808%

Explanation:

A firm's cost of equity is the return expected by holders of Common Stock.

The Data available allows us to use the Capital Asset Pricing Model (CAPM) to determine the cost of Equity.

Cost of Equity = Risk Free Rate + Company`s Beta × Expected Return on Market Portfolio

                       = 2.8%+1.34×11.2%

                       = 17.808%

Answer:

Cost of equity = 14.1%

Explanation:

The capital asset pricing model is a risk-based model. Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is measured by beta.

Under CAPM, Ke= Rf + β(Rm-Rf)

Rf-risk-free rate (treasury bill rate), β= Beta, Rm= Return on market.

Rf- 2.8% , Rm- 11.2%, β-1.34

Using this model,

Ke= 2.8% + 1.34×(11.2%-2.8%)

= 14.1%

Following is a recent BusinessSoftware Corp. press release: REDMOND, Wash.—March 16, 2016 — BusinessSoftware Corp. today announced that its board of directors have declared a quarterly dividend of $0.18 per share. The dividend will be payable on June 9, 2016, to shareholders of record on May 19, 2016. The ex-dividend date will be May 17, 2016 Prepare the journal entries BusinessSoftware Corp. used to record the declaration and payment of the cash dividend for its 8,600 million shares.

Answers

Answer:

Explanation:

1. The journal entry for declaration of dividend is shown below:

Retained Earnings A/c Dr

= (8,600 million shares × $0.18 per share) = $1,548 million

          To Dividend payable in cash                                         $1,548 million

(Being dividend is declared)

2. No journal entry should be passed on the record date

3. The journal entry for payment of the cash dividend is shown below:

Cash dividend payable A/c Dr     $1,548 million

      To Cash                                                              $1,5480 million

(Being payment is made for cash dividend)

Final answer:

The journal entries made by BusinessSoftware Corp. to record the declaration and payment of the cash dividend for its 8,600 million shares involve debiting retained earnings and crediting dividends payable on the declaration date, and debiting dividends payable and crediting cash on the payment date.

Explanation:

The journal entries made by BusinessSoftware Corp. to record the declaration and payment of the cash dividend for its 8,600 million shares would be as follows:

  1. Declaration Date:
  2. Retained Earnings DR $1,548,000 (8,600 million shares x $0.18 per share)
  3. Dividends Payable CR $1,548,000
  4. Payment Date:
  5. Dividends Payable DR $1,548,000
  6. Cash CR $1,548,000

Learn more about Journal entries here:

brainly.com/question/33762471

#SPJ12

Thirty-five percent of the sales on account are collected in the month of sale, 45% in the month following sale, and the remainder are collected in the second month following sale. The following are budgeted sales data for the company: January February March April Total sales $50,000 $60,000 $40,000 $30,000 What is the amount of cash that should be collected in March

Answers

Answer:

The amount of cash collected in March should be:

$51,000.

Explanation:

a) Data and Calculations:

Budgeted sales and Cash Collections:

                                           January    February       March         April

Total sales                         $50,000    $60,000     $40,000    $30,000

Collections:

35% month of sales             17,500       21,000         14,000       10,500

45% month following                            22,500        27,000       18,000

20% second month                                                    10,000

Total collections in March                                       $51,000

b) The above calculations concentrated on the month of March, being the month of interest.  Though, sales on account totals $40,000, the cash collections for the month amounts to $51,000.  This arises from cash collections from the months of January and February.

Other Questions