BUSN 278 Full Course - DevryOnlineHelp
467 views | +0 today
Follow
Your new post is loading...
Your new post is loading...
Scooped by Chadstorerg
Scoop.it!

BUSN 379 Week 4 Midterm Exam | DeVry Online Help

http://www.devryonlinehelp.com/product/busn-379-week-4-midterm-exam/

Chadstorerg's insight:

http://www.devryonlinehelp.com/product/busn-379-week-4-midterm-exam/

 

1. (TCO 1) What is the goal of financial management for a sole proprietorship? (Points : 3)

decrease long-term debt to reduce the risk to the owner
maximize net income given the resources of the firm
maximize the market value of the equity
minimize the tax impact on the proprietor
minimize costs and increase production

2. (TCO 1) Working capital management includes which of the following? (Points : 3)

establishing the inventory level
deciding when to pay suppliers
determining the amount of cash needed on a daily basis
establishing credit terms for customers
all of the above

3. (TCO 1) Market value reflects which of the following: (Points : 3)

The amount someone is willing to pay today for an asset.
The value of the asset based on generally-accepted accounting principles.
The asset’s historical cost.
A and B only
None of the above

4. (TCO 1) Which of the following is true regarding income statements? (Points : 3)

It shows the revenue and expenses, based upon selected accounting methods.
It reveals the net cash flows of a firm over a stated period of time.
It reflects the financial position of a firm as of a particular date.
It records revenue only when cash is received for the product or service provided.
It records expenses based on the recognition principle

5. (TCO 1) Tato’s Pizza has sales of $625,000. They paid $43,000 in interest during the year and depreciation was $79,000. Administrative costs were $100,000 and other costs were $160,000. Assuming a tax rate of 35 percent, what is Tato’s Pizza net income?
(Points : 3)

$157,950
$322,000
$243,000
$200,000

6. (TCO 1) Home Best Hardware had $315,000 in taxable income last year. Using the tax rates provided in Table 2.3, what is the marginal tax rate?(Points : 3)

35%
39%
34%
32%

7. (TCO 1) Pizza A had earnings after taxes of $390,000 in the year 2008 and 300,000 shares outstanding. In year 2009, earnings after taxes increased by 20 percent to $468,000 and 25,000 new shares were issued for a total of 325,000 shares. What is the EPS figure for 2008? (Points : 3)

$1.30
$1.44
$0.77
$0.69

8. (TCO 1) The income statement reflects: (Points : 3)

income and expenses at the time when those items affect the cash flows of a firm.
income and expenses in accordance with GAAP.
the cash flows in accordance with GAAP.
the flow of cash into and out of a firm during a stated period of time.
the flow of cash into and out of a firm as of a particular date

9. (TCO 1) Print Imaging has EBIT of $150,000, interest of $30,000, taxes of $50,000, and depreciation of $50,000. What is the company’s operating cash flow? (Points : 3)

$120,000
$180,000
$170,000
$150,000
$120,000

10. (TCO 3) Mark deposited $1,000 today, in an account that pays eight percent interest, compounded semi-annually. Which one of the following statements is correct concerning this investment? (Points : 3)

Mark will earn more interest in year 4 than he will in year 3.
Mark will receive equal interest payments every six months over the life of the investment.
Mark would have earned more interest if he had invested in an account paying 8 percent simple interest.
Mark would have earned more interest if he had invested in an account paying annual interest.
Mark will earn less and less interest each year over the life of the investment

11. (TCO 3) Mr. Smith will receive $7,500 a year for the next 14 years from his trust. If the interest rate on this investment is eight percent, what is the approximate current value of these future payments? (Points : 3)

$61,800
$53,500
$113,400
$97,200

12. (TCO 3) Your neighbor just received a credit offer in an e-mail. The company is offering him $6,000 at 12.8 percent interest. The monthly payment is only $110. If he accepts this offer, how long will it take him to pay off the loan? (Points : 3)

81.00 months
81.50 months
83 months
82.17 months
90.70 months

13. (TCO 3) Fine Oak Woodworks is considering a project that has cash flows of $5,000, $3,000, and $8,000 for the next three years. If the appropriate discount rate of this project is 10 percent, which of the following statements is true? (Points : 3)

The current value of the project’s inflows is $16,000
The approximate current value of the project’s inflows is $13,000
The current value of the project’s inflows is somewhere in between $14,000 and $16,000
The project should be rejected because its present value is negative

14. (TCO 4) You are considering two investments. Investment I is in a software company, and Investment II is an engineering company. The investments offer the following cash flows:

YearSoftware CompanyEngineering Company

If the appropriate discount rate is 10 percent, what is the approximate present value of the Engineering Company investment? (Points : 3)

$33,200
$34,500
$42,000
$43,500

15. (TCO 3) North Bank offers you an APR of 9.76 percent compounded semiannually, and South Bank offers you an effective rate of 9 percent on a business loan. Which bank should you choose and why? (Points : 3)

South Bank because its effective rate is higher.
North Bank because the APR is lower.
South Bank because its effective rate is lower.
North Bank because its effective rate is lower

1. (TCO 3) Tim needs to borrow $5,000 for two years. The loan will be repaid in one lump sum at the end of the loan term. Which one of the following interest rates is best for Tim? (Points : 3)

7.5 percent simple interest
7.5 percent interest, compounded monthly
8.0 percent simple interest
8.0 percent interest, compounded annually
8.0 percent interest, compounded monthly

2. (TCO 3) Which one of the following is an example of an annuity, but not a perpetuity? (Points : 3)

unequal payments each month, for 18 months
payments of equal amount each quarter forever
unequal payments each year forever
equal payments every six months for 48 months
unending equal payments every other month

3. (TCO 3) Fanta Cola has $1,000 par value bonds outstanding at 12 percent interest. The bonds mature in 25 years. What is the current price of the bond if the YTM is 16 percent? Assume annual payments. (Points : 3)

$1315
$1300
$756
$1000

4. (TCO 6 and 8) Which one of the following statements is correct? (Points : 3)

Bond issuers maintain a listing of bondholders when bonds are issued in bearer form.
An indenture, is a contract between a corporation and its shareholders.
Collateralized bonds are called debentures.
The description of any property used to secure a bond issue is included in the bond indenture

5. (TCO 3) Bonds issued by Blue Sky Airlines have a face value of $1,000 and currently sell for $1,180. The annual coupon payments are $125. If the bonds have 20 years until maturity, what is the approximate YTM of the bonds? (Points : 3)

10.50%
11.50%
11.75%
12%

6. (TCO 3) Bean Coffee issued preferred stock many years ago. It carries a dividend of $8 per share, fixed. As time has passed, yields have decreased from the original eight percent (at the time of issuance) to six percent. What was the current price of the stock? Hint: Yield is the same as required rate of return. (Points : 3)

$100
$133
$102
$86.40
None of the above

7. (TCO 3) Intelligence Research, Inc. will pay a common stock dividend of $1.60 at the end of the year. The required rate of return by common stockholders is 13 percent. The firm has a constant growth rate of seven percent. What is the current price of the stock? (Points : 3)

$23
$32
$27
$29

8. (TCO 3) Royal Electric paid a $4 dividend last year. The dividend is expected to grow at a constant rate of six percent over the next four years. Common stockholders require a 13 percent return. What are the values of the dividends for years 1, 2 and 3, respectively? (Points : 3)

$4, $4.5 and $4.8
$4.24, $4.76 and $5.05
$4.24, $4.49, $4.76
$4, $4.50, $5.05

9. (TCO 6) Which of the following is true regarding the primary market? (Points : 3)

it is the market where the largest number of shares are traded on a daily basis.
it is the market in which the largest number of issues are listed.
it is the market with the largest number of participants.
it is the market where new securities are offered.
it is the market where shareholders trade most frequently with each other

10. (TCO 6) A member of the NYSE who trades on the floor of the exchange for his or her personal account is called a(n): (Points : 3)

specialist.
independent broker.
floor trader.
stand-alone agent.
dealer

11. (TCO 6) The annual interest on a bond divided by the bond’s market price is called the: (Points : 3)

yield to maturity.
yield to call.
total yield.
required yield.
current yield

12. (TCO 6) Star Industries has one outstanding bond issue. An indenture provision prohibits the firm from redeeming the bonds during the first two years. This provision is referred to as a _____ provision. (Points : 3)

deferred call
market
liquidity
debenture
sinking fund

13. (TCO 8) Which of the following is true regarding bonds? (Points : 3)

Most bonds do not carry default risk.
Municipal bonds are free of default risk.
Bonds are not sensitive to changes in the interest rates.
Moody’s and Standard and Poor’s provide information regarding a bond’s interest rate risk.
None of the above is true

14. (TCO 6) Which of the following is not a floating-rate bond? (Points : 3)

A bond that adjusts the coupon payments based on an interest rate index, such as the T-bill.
An EE Savings Bond issued by the U.S. government.
A bond that does not have any coupons until maturity.
A bond that adjusts the coupon and face value payment based on inflation.
TIPS

15. (TCO 6) Which of the following is true regarding put bonds? Select all that apply: (Points : 3)

Have coupons that depend on the company’s income
Can be exchanged for a fixed number of shares before maturity only
Can be exchanged for a fixed number of shares before maturity
Allow the holder to require the issuer to buy the bond back

1. (TCO 1) In a general partnership, each partner is personally liable for: (Points : 3)

the partnership debts that he or she personally obtained for the firm.
his or her proportionate share of all partnership debts, regardless of which partner incurred that debt.
the total debts of the partnership, even if he or she was unaware of those debts.
the debts of the partnership, up to the amount he or she invested in the firm.
all personal and partnership debts incurred by any partner, even if he or she was unaware of those debts

2. (TCO 1) Trademarks are classified as: (Points : 3)

short-term assets.
current liabilities.
long-term debt.
tangible fixed assets.
intangible fixed assets

1. (TCO 1) Can you provide some examples of recent, well-known unethical behavior cases? Explain the situation in one or two sentences.

2. What are some real-life scenarios where you can apply the time value of money? Present two or three scenarios. Briefly explain your rationale.

3. Explain some of the key risks associated with bonds.

4. What are some of the features of zero-coupon bonds that make them attractive to certain investors? Which type of investors will be most interested in these bonds?

more...
No comment yet.
Scooped by Chadstorerg
Scoop.it!

BUSN 379 Week 7 Final Exam | DeVry Online Help

http://www.devryonlinehelp.com/product/busn-379-week-7-final-exam/

Chadstorerg's insight:

http://www.devryonlinehelp.com/product/busn-379-week-7-final-exam/

 

1.  (TCO 4) Which of the following is true regarding the evaluation of projects? (Points : 4)

sunk costs should be included
erosion effects should not be considered
financing costs need to be included
opportunity costs are relevant

2. (TCO 4) Which of the following investment ranking methods does not consider the time value of money? (Points : 4)

net present value method
payback method
internal rate of return method
all of these are time-adjusted methods

3. (TCO 3 and 4) A net present value of zero implies that an investment: (Points : 4)

has no initial cost.
has an expected return that is less than the required return.
should be rejected even if the discount rate is lowered.
never pays back its initial cost.
is earning a return that exactly matches the requirement.

4. (TCO 3 and 4) What is the net present value of a project with the following cash flows, if the discount rate is 15 percent?

Year

0

1

2

3

4

Cash flow

-$45,000

$11,520

$13,630

$16,470

$18,990

(Points : 4)

-$2,989.48
-$2,599.55
$1,153.37
$2,880.08
$3,312.09

5. (TCO 4) Leward Manufacturing is spending $115,000 to update its equipment. This is necessary if the firm wishes to be competitive in the marketplace and provide a wide array of product models. The company estimates that these updates will improve its cash inflows by $27,500 a year, for eight years. What is the payback period? (Points : 4)

4.18 years
5.82 years
6.62 years
7.79 years
This project never pays back

6. (TCO 4) The postponement of a project until conditions are more favorable: (Points : 4)

is a valuable option.
is referred to as the option to extend.
could not cause a negative net present value project to become a positive net present value project.
will generally cause the internal rate of return for a project to decline.

7. (TCO 4) ___________, occurs when a firm cannot raise financing for a project under any circumstances. (Points : 4)

contingency planning.
hard rationing.
soft rationing.
capital constraint.
scenario analysis.

8. (TCO 4) ABC Cameras is considering an investment that will have a cost of $10,000 and the following cash flows: $6,000 in year 1, $4,000 in year 2 and $3,000 in year 3. Assume the cost of capital is 10%. Which of the following is true regarding this investment? (Points : 4)

The net present value of the project is approximately $10,000
This project should be accepted because it has a positive net present value
This project’s payback period is 10 years or more
None of the above is true

9. (TCO 4) Assume Company X plans to invest $60,000 in new computers. Using Tables 9.6 and 9.7 of your textbook (Page 277), which is the second year depreciation amount under MACRS? (Points : 4)

$12,000
$19,200
$19,800
None of the above

10. (TCO 1 and 4) Assume a corporation has earnings before depreciation, and taxes of $100,000, depreciation of $40,000, and that it has a 30 percent tax bracket. What are the after-tax cash flows for the company? (Points : 4)

$82,000
$110,000
$42,000
none of these

11. (TCO 8) Which of the following statements is true regarding systematic risk? (Points : 4)

is diversifiable
is the total risk associated with surprise events
it is measured by beta
it is measured by standard deviation

12. (TCO 8) Which statement is true regarding risk? (Points : 4)

the expected return is usually the same as the actual return
a key to assess risk is determining how much risk an investment adds to a portfolio
risks can always be decreased or mitigated by the financial manager
the higher the risk, the lower the return investors require for the investment

13. (TCO 8) The stock of Hobby Town has an expected return of 8.8 percent. Given the information below, what is the expected return on this stock if the economy is normal?

State of Economy

Probability of State of Economy

Rate of Return

Recession

.10

-.09

Normal

.70

?

Boom

.20

.26

(Points : 4)

3.86 percent
4.42 percent

6.43 percent
7.28 percent
8.21 percent

14. (TCO 8) You own a portfolio that consists of $8,000 in stock A, $4,600 in stock B, $13,000 in stock C, and $5,500 in stock D. What is the portfolio weight of stock B? (Points : 4)

14.79 percent
15.91 percent
18.42 percent
19.07 percent
19.46 percent

15. (TCO 8) You would like to create a portfolio that is equally invested in a risk-free asset and two stocks. The one stock has a beta of .80. What does the beta of the second stock have to be if you want the portfolio risk to equal that of the overall market? (Points : 4)

1.4
1.6
1.8
2.0
2.2

1. (TCO 8) Weak form market efficiency states that the value of a security is based on: (Points : 4)

all public and private information.
historical information only.
all publicly available information.
all publicly available information, plus any data that can be gathered from insider trading.
random information with no clear distinction as to the source of that information.

2. (TCO 5) Royal Petroleum Co. can buy a piece of equipment that can be financed with debt at a cost of 6 percent (after-tax) and common equity at a cost of 18 percent. Assume debt and common equity each represent 50 percent of the firm’s capital structure. What is the weighted average cost of capital? (Points : 4)

between 3 and 9%
exactly 12%
more than 14%
exactly 11%
none of the above

3. (TCO 5, 6 and 7) An issue of common stock is expected to pay a dividend of $4.80 at the end of the year. Its growth rate is equal to eight percent. If the required rate of return is 13 percent, what is its current price? (Points : 4)

$103.68
$36.92
$96.00
none of these

4. (TCO 5, 6 and 7) Which of the following is true regarding the cost of debt? (Points : 4)

It is the return that the firm’s creditors demand on new borrowing.
It is always equal to the weighted cost of capital.
An appropriate method to compute the cost of debt is using the coupon rate of current bonds outstanding.
All of the above are true.

5. (TCO 5) Which of the following is not true regarding the cost of retained earnings? (Points : 4)

it is relevant to the WACC
does not require new funds to be raised
has associated flotation costs
has a cost, which is the opportunity cost associated with stockholder funds

6. (TCO 4) A project has the following cash flows. What is the internal rate of return?

Year

0

1

2

3

Cash flow

-$195,600

$99,800

$87,600

$75,300

(Points : 4)

less than 5%
between 5 and 15%
between 15 and 18%
more than 21%

7. (TCO 5, 6 and 7)  All else constant, the weighted average cost of capital for a firm will decrease if: (Points : 4)

a firm’s bonds start selling at a premium, rather than at a discount.
the market risk premium increases.
the firm replaces some of its debt with preferred stock.
corporate taxes are eliminated.
the dividend yield on the common stock increases.

8. (TCO 5, 6 and 7) The six percent preferred stock of FKH Manufacturing is selling for $62 a share. What is the firm’s cost of preferred stock, if the tax rate is 34 percent and the par value per share is $100? (Points : 4)

5.98%
7.06%
8.05%
9.68%
10.10%

9. (TCO 2) Which one of the following occurs if a firm files for Chapter 7 bankruptcy, but does not generally occur if the firm files for Chapter 11 bankruptcy? (Points : 4)

a petition is filed in federal court
administrative fees are incurred
a list of creditors is compiled
pre-bankruptcy shareholders tend to lose part, if not all, of their investment in the firm
a trustee-in-bankruptcy is elected by the creditors

10. (TCO 5) Which of the following statements is false regarding the cost of capital? (Points : 4)

The cost of capital should consider the flotation costs.
All other being equal, it is preferable to use market value weights than book value weights.
The WACC is the most appropriate discount rate for all projects.
Should include the cost of retained earnings.

11. (TCO 2) Which of the following increases the cash account? (Points : 4)

Goods are sold on credit
An interest payment on a notes payable is made
A payment due is received from a client
Raw materials are purchased and paid for with credit

12. (TCO 2) Which of the following statements is true? (Points : 4)

The optimal credit policy minimizes the total cost of granting credit.
Firms should avoid offering credit at all cost.
An increase in a firm’s average collection period generally indicates that an increased number of customers are taking advantage of the cash discount.
Character, refers to the ability of a firm to meet its credit obligations out its operating cash flows.
The optimal credit policy, is the policy that produces the largest amount of sales for a firm.

13. (TCO 2) All else constant, a decrease in the accounts receivable period will: (Points : 4)

lengthen the accounts payable period.
shorten the inventory period.
lengthen the operating cycle.
shorten the cash cycle.
shorten the accounts payable period.

14. (TCO 2) Delphinia’s has the following estimated quarterly sales for next year. The accounts receivable period is 30 days. What is the expected accounts receivable balance at the end of the second quarter? Assume each month has 30 days.

Q1

Q2

Q3

Q4

Sales

$1,800

$1,700

$2,100

$1,900

(Points : 4)

$567
$600
$821
$1,134
$1,200

15. (TCO 1) Why is maximization of the current value per share a more appropriate financial management goal than profit maximization? (Points : 4)

Because by maximizing the current stock value, you also maximize the company’s profit for the year.
Because this criterion is non-ambiguous.
Because financial managers always act in the best interest of shareholders.
Because it creates short-term gains in the financial statements.

1. (TCO 1) Which one of the following activities best exemplify working capital management? (Points : 4)

Sale long-term bonds to raise funds for a new machine.
Determine the return of a potential project.
Calculate the cash flows for a project.
Manage payments to suppliers.

2. (TCO 1) Book values are different from market values because: (Points : 4)

Book values reflect the value of the asset based on generally-accepted accounting principles.
Book values are used in the company’s balance sheet.
Book values do not reflect the amount someone is willing to pay today for an asset.
All of the above
None of the above

3. (TCO 1) Use the following tax table to answer this question:

Taxable Income

Tax Rate

$0-

$50,000

15%

$50,001-

75,000

25

$75,001-

100,000

34

$100,001-

335,000

39

$335,001-

10,000,000

34

Riddell, Inc. earned $144,320 in taxable income for the year. How much tax does the company owe on this income? (Points : 4)

$39,535
$49,069
$51,285
$56,285
$78,535

4. (TCO 3) Regional Bank offers you an APR of 19 percent compounded semiannually, and Local Bank offers you an EAR of 19.50 percent for a new automobile loan. You should choose ______________ because its _______ is lower. (Points : 4)

Regional Bank, APR
Local Bank, EAR
Regional Bank, EAR
Local Bank, APR

5. (TCO 3) You deposited $8,000 in your bank account today. Which of the following will increase the future value of your deposit, assuming that all interest is reinvested? Assume the interest rate is a positive value. Select all that apply: (Points : 4)

a decrease in the interest rate
increasing the initial amount of your deposit
decreasing the frequency of the interest payments
extending the length of the investment period

6. (TCO 3) You want to have $15,000 for a down payment on a house five years from now. If you can earn 13 percent, compounded annually, on your savings, how much do you need to deposit today to reach your goal? (Points : 4)

$7,858.11
$8,141.40
$9,803.58
$12,464.28
$14,213.25

7. (TCO 3) The new home that you want to buy costs $249,500. You plan to make a cash down payment of 20 percent and finance the balance over 10 years at 6.75 percent. What will be the amount of your monthly mortgage payment? (Points : 4)

$2,291.89
$2,809.10
$3,287.46
$3,412.67
$4,145.68

8. (TCO 3) Which type of loan is comparable to the present value of a future lump sum? (Points : 4)

effective annual rate
amortized
interest-only
annual percentage
pure discount

9. (TCO 3) Fanta Cola has $1,000 par value bonds outstanding at 12 percent interest. The bonds mature in 25 years. What is the current price of the bond if the YTM is 16 percent? Assume annual payments. (Points : 4)

$1315
$1300
$756
$1000

10. (TCO 6) The market where new securities are offered is called the _____ market. (Points : 4)

primary
main
secondary
principal
dealer

11. (TCO 7) Which one of the following statements concerning financial leverage is correct? (Points : 4)

Financial leverage increases profits and decreases losses.
Financial leverage has no effect on a firm’s return on equity.
Financial leverage, refers to the use of common stock.
Financial leverage magnifies both profits and losses.
Increasing financial leverage will always increase the earnings per share.

12. (TCO 3) SmithKline Company’s bonds are currently selling for $1,157.75 per $1000 par-value bond. The bonds have a 10 percent coupon rate and will mature in 10 years. What is the approximate yield to maturity? (Points : 4)

6.96%
7.69%
11.0%
12.1%

13. (TCO 8) Which of the following is true regarding bonds? (Points : 4)

Bonds do not carry default risk.
Bonds are sensitive to changes in the interest rates.
Moody’s and Standard and Poor’s provide information regarding a bond’s interest rate risk.
Municipal bonds are free of default risk.
None of the above is true

14. (TCO 8) Which one of the following bonds is the most sensitive to interest rate movements?  (Points : 4)

zero-coupon, five year
seven percent annual coupon, five year
zero-coupon, 10 year
five percent semi-annual coupon, 10 year
five percent annual coupon, 10 year

15. (TCO 6) A sinking fund is an account managed by a bond trustee for the sole purpose of: (Points : 4)

paying interest payments on a semi-annual basis.
redeeming bonds early.
repaying the face value at maturity.
paying the expenses required to reissue outstanding bonds.
paying the “balloon payment” at maturity.

1. (TCO 6) Which of the following is true regarding put bonds? (Points : 4)

Have coupons that depend on the company’s income
Can be exchanged for a fixed number of shares before maturity only
Can be exchanged for a fixed number of shares before maturity
Allow the holder to require the issuer to buy the bond back

2. (TCO 6 and 7) Financial leverage deals with: (Points : 4)

the relationship of fixed and variable costs.
the percentage of debt in the capital structure.
the entire income statement.
the entire balance sheet.

3. (TCO 6) Company A has a bond outstanding with $90 annual interest payment, a market price of $820, and a maturity date in five years. Assume the par value to be $1,000. What is the bond’s current yield? (Points : 4)

9%
14%
11%
Cannot be determined
None of the above

4. (TCO 2) Which of the following does not reduce collection float? (Points : 4)

installing a lockbox system.
deposit collections weekly, instead of daily.
requiring all customers pay by cash, rather than with check.
utilize the benefits of the Check Clearing Act for the 21stCentury.

5. (TCO 2) ___________, is a system that minimizes inventory. (Points : 4)

material requirements planning
ABC approach
just in time
reorder points

6. (TCO 1) Provide three examples of situations in which business ethics play a role in the financial management process. Explain your rationale, and how these situations may affect the value of the firm. (Points : 10)
7. (TCO 4) What are sunk costs? Provide at least two real-life examples of sunk costs for a project. Should sunk costs be included as incremental cash flows? Why or why not? Explain your rationale. (Points : 10)
8. (TCO 8) What is the difference between systematic and unsystematic risk? Provide one example of each. Can both systematic and unsystematic risks be diversified? Why or why not? (Points : 10)
9. (TCO 2) What are the costs associated with extending (or not extending) a credit policy to customers? (Points : 10)
10. (TCO 6 and 7) Consider the following statement: “In order to maximize value, all firms should maintain a 30/70 debt to equity ratio”. Do you believe this statement is correct? Explain your rationale. (Points : 10)

more...
No comment yet.
Scooped by Chadstorerg
Scoop.it!

BUSN 278 Week 4 Midterm

http://www.devryonlinehelp.com/product/busn-278-week-4-midterm/

Chadstorerg's insight:

http://www.devryonlinehelp.com/product/busn-278-week-4-midterm/

 

(TCO 1) The type of budget that is updated on a regular basis is known as a ________________

(TCO 2) The quantitative forecasting method that uses actual sales from recent time periods to predict future sales assuming that the closest time period is a more accurate predictor of future sales is:

(TCO 3) The regression statistic that measures how many standard errors the coefficient is from zero is the ________________

(TCO 4) Capital expenditures are incurred for all of the following reasons except:

(TCO 5) Which of the following is not true when ranking proposals using zero-base budgeting?

(TCO 6) Which of the following ignores the time value of money?

(TCO 1) There are several approaches that may be used to develop the budget. Managers typically prefer an approach known as participative budgeting. Discuss this form of budgeting and identify its advantages and disadvantages.

(TCO 2) There are a variety of forecasting techniques that a company may use. Identify and discuss the three main quantitative approaches used for time series forecasting models.

(TCO 2) The Federal Election Commission maintains data showing the voting age population, the number of registered voters, and the turnout for federal elections. The following table shows the national voter turnout as a percentage of the voting age population from 1972 to 1996 (The Wall Street Journal Almanac; 1998):

(TCO 3) Use the table “Food and Beverage Sales for Paul’s Pizzeria” to answer the questions below.

(TCO 6) Jackson Company is considering two capital investment proposals. Estimates regarding each project are provided below:

(TCO 6) Top Growth Farms, a farming cooperative, is considering purchasing a tractor for $468,000. The machine has a 10-year life and an estimated salvage value of $32,000. Top Growth uses straight-line depreciation. Top Growth estimates that the annual cash flow will be $78,000. The required rate of return is 9%.

Part (a) Calculate the payback period.
Part (b) Calculate the net present value.
Part (c) Calculate the accounting rate of return

more...
No comment yet.
Scooped by Chadstorerg
Scoop.it!

BUSN 278 Course Project | DeVry Online Help

http://www.devryonlinehelp.com/product/busn-278-course-project/

Chadstorerg's insight:

http://www.devryonlinehelp.com/product/busn-278-course-project/

 

Project Overview:

This is an individual project where you will be acting as a consultant to an entrepreneur who wants to start a new business. As the consultant, you’ll create a 5 year budget that supports the entrepreneur’s vision and strategy, as well as the needs for equipment, labor, and other startup costs.

You can choose from one of three types of new business startups — a landscaping company, a restaurant, or an electronics store that sells portable computing devices. Each business has its own Business Profile detailed in the sections below. The purpose of the Business Profile is to guide you in understanding the scope of the business, the entrepreneur’s startup costs, and financial assumptions.

The project requires you to create a written budget proposal, a supporting Excel Workbook showing your calculations, and a PowerPoint presentation summarizing the key elements of the budget proposal, which you assume will be presented to a management team.

This is an individual project. Each week you will complete a section of the project in draft form. In Week 7, you will submit the final version of the project’s Budget Proposal, Budget Workbook, and Budget Presentation in PowerPoint.

Deliverables Schedule / Points

Week

Deliverable

Points

1

Section 1.0 Executive Summary (Draft)

10

2

Section 2.0 Sales Forecast (Draft)

10

3

Section 3.0 Capital Expenditure Budget (Draft)

10

4

Section 4.0 Investment Analysis (Draft)

10

5

Section 5.1 Pro Forma Income Statement (Draft)

10

6

Section 5.2 Pro Forma Cash Flow Statements (Draft)

10

7

Final Budget Proposal

90

7

Final Presentation w/ PowerPoint

30

Total project points

180

Business Profile:Papa Geo’s – Restaurant

Vision

The vision of the entrepreneur is to create a single-location, sit-down Italian restaurant called Papa Geo’s. The goal is to generate an income of $40,000 per year, starting sometime in the second year of operation, as wells as profit that is at least 2% of sales.

Strategy

a) Market Focus/Analysis

The restaurant targets middle to lower-middle class families with children, as well as adults and seniors, located in Orlando, Florida. The area within 15 minutes of the store has 10,000 families, mostly from lower to middle class neighborhoods. Average family size is 4 people per household. There is no direct competition; however, there are fast food restaurants like McDonald’s, Taco Bell and Wendy’s in the geographical target market. The lower to middle class population is growing at about 6% per year over the next five years in this area.

b) Product

The product is Italian food served buffet style, in an all-you-can-eat format, with a salad bar, pizza, several different types of pasta with three or four types of sauces, soup, desserts, and a self-serve soda bar. The restaurant is also to have a 500 square foot gaming area which has game machines that children would be interested in using.

c) Basis of Competition

Customers come to this restaurant because of the good Italian food at a low price – you can get a meal for $7, including drinks. Customers also eat at Papa Geo’s due to the cleanliness of the facility, the speed of getting their seat and food, and the vending machines which keep the children busy while adults enjoy their meal.

Startup Requirements*

Given Costs

· The cost of registering a limited liability company in Florida – filing fees listed at the bottom of the application for located at: http://form.sunbiz.org/pdf/cr2e047.pdf

· Renovation of the facility expected to cost $15,000

· Business insurance, estimated at $1,000 per year

· Health and other benefits are 20% of the salaries of the manager and assistant manager

Costs you should estimate through research, experience or other methods

Soda fountain bar 2 pizza ovens Salad and pizza/dessert bar Approximately 100 square foot commercial refrigerator 2 cash registers 6 video game vending machines Management office with desk and lower-priced laptop computer Staff lunchroom equipment such as microwave, sink, cupboards and refrigerator 20 four-seater tables with chairs Busing cart for transporting dirty dishes from the dining area to the dishwashing area 140 sets of dishes, including cutlery and drinking cups Commercial dishwasher Miscellaneous cooking and food handling equipment like trays, lifters, spoons, pots etcetera The cost of an average of 7 employees on the payroll. All operating costs, such as advertising, rent for a 3,500 square foot facility with male and female washrooms (already installed), utilities, maintenance, and annual depreciation

*If you have questions about startup requirements, or think other startup costs necessary for the business are missing, then make an assumption and state it in the relevant section of the report.

Given Financial Assumptions*

The owner will be granted a loan for the initial startup, repayable over 10 years at current interest rates for small business loans. The owner will use personal funds to operate the business until it generates enough cash flow to fund itself. Essentially, all sales are made by credit card. All credit card sales are paid to the restaurant daily by the credit card company. 2.5% of sales is paid to the credit card company in fees. Food suppliers give 30 days of trade credit. Inventories are expected to be approximately 10% of the following month’s sales. The average meal costs $4.00 in materials and labor. The average family spends $4.00 on vending machine tokens. Equipment is depreciated on a straight-line basis over 5 years. Managers have health benefits, other workers do not. The company will operate from 10:00 am to 9:00 pm, 7 days a week. The entrepreneur will manage the store and draw a salary. Every shift has one person on the cash register, one keeping the food bars stocked with food, two cooking the food, one on busing and table cleaning, a manager, and assistant manager.

*If you believe any other assumptions are necessary, please state them in your budget proposal.

more...
No comment yet.
Scooped by Chadstorerg
Scoop.it!

BUSN 278 Budgeting and Forecasting - All Weeks Discussions | DeVry Online Help

BUSN 278 Budgeting and Forecasting - All Weeks Discussions | DeVry Online Help | BUSN 278 Full Course - DevryOnlineHelp | Scoop.it

http://www.devryonlinehelp.com/product/busn-278-budgeting-and-forecasting-all-weeks-discussions/

Chadstorerg's insight:

http://www.devryonlinehelp.com/product/busn-278-budgeting-and-forecasting-all-weeks-discussions/

 

w1 dq1 Budgeting and Planning

w1 dq2 Forecasting Techniques

w2 dq1 Linear Regression

w2 dq2 Seasonal Variations

w3 dq1 Revenue Budget

w3 dq2 Capital Expenditures Budget

w4 dq1 Capital Budgeting

w4 dq2 New Business Startups

w5 dq1 Master Budget

w5 dq2 Cash Budgeting

w6 dq1 Cost Behavior

w6 dq2 Variance Analysis

w7 dq1 Administering the Budget

w7 dq2 Presenting and Defending a Budget

more...
No comment yet.
Scooped by Chadstorerg
Scoop.it!

BUSN 379 Midterm Exam | DeVry Online Help

http://www.devryonlinehelp.com/product/busn-379-midterm-exam/

Chadstorerg's insight:

http://www.devryonlinehelp.com/product/busn-379-midterm-exam/

 

1. (TCO 1) What is the goal of financial management for a sole proprietorship? (Points : 3)

decrease long-term debt to reduce the risk to the owner
maximize net income given the resources of the firm
maximize the market value of the equity
minimize the tax impact on the proprietor
minimize costs and increase production

2. (TCO 1) Working capital management includes which of the following? (Points : 3)

establishing the inventory level
deciding when to pay suppliers
determining the amount of cash needed on a daily basis
establishing credit terms for customers
all of the above

3. (TCO 1) Market value reflects which of the following: (Points : 3)

The amount someone is willing to pay today for an asset.
The value of the asset based on generally-accepted accounting principles.
The asset’s historical cost.
A and B only
None of the above

4. (TCO 1) Which of the following is true regarding income statements? (Points : 3)

It shows the revenue and expenses, based upon selected accounting methods.
It reveals the net cash flows of a firm over a stated period of time.
It reflects the financial position of a firm as of a particular date.
It records revenue only when cash is received for the product or service provided.
It records expenses based on the recognition principle

5. (TCO 1) Tato’s Pizza has sales of $625,000. They paid $43,000 in interest during the year and depreciation was $79,000. Administrative costs were $100,000 and other costs were $160,000. Assuming a tax rate of 35 percent, what is Tato’s Pizza net income?
(Points : 3)

$157,950
$322,000
$243,000
$200,000

6. (TCO 1) Home Best Hardware had $315,000 in taxable income last year. Using the tax rates provided in Table 2.3, what is the marginal tax rate?(Points : 3)

35%
39%
34%
32%

7. (TCO 1) Pizza A had earnings after taxes of $390,000 in the year 2008 and 300,000 shares outstanding. In year 2009, earnings after taxes increased by 20 percent to $468,000 and 25,000 new shares were issued for a total of 325,000 shares. What is the EPS figure for 2008? (Points : 3)

$1.30
$1.44
$0.77
$0.69

8. (TCO 1) The income statement reflects: (Points : 3)

income and expenses at the time when those items affect the cash flows of a firm.
income and expenses in accordance with GAAP.
the cash flows in accordance with GAAP.
the flow of cash into and out of a firm during a stated period of time.
the flow of cash into and out of a firm as of a particular date

9. (TCO 1) Print Imaging has EBIT of $150,000, interest of $30,000, taxes of $50,000, and depreciation of $50,000. What is the company’s operating cash flow? (Points : 3)

$120,000
$180,000
$170,000
$150,000
$120,000

10. (TCO 3) Mark deposited $1,000 today, in an account that pays eight percent interest, compounded semi-annually. Which one of the following statements is correct concerning this investment? (Points : 3)

Mark will earn more interest in year 4 than he will in year 3.
Mark will receive equal interest payments every six months over the life of the investment.
Mark would have earned more interest if he had invested in an account paying 8 percent simple interest.
Mark would have earned more interest if he had invested in an account paying annual interest.
Mark will earn less and less interest each year over the life of the investment

11. (TCO 3) Mr. Smith will receive $7,500 a year for the next 14 years from his trust. If the interest rate on this investment is eight percent, what is the approximate current value of these future payments? (Points : 3)

$61,800
$53,500
$113,400
$97,200

12. (TCO 3) Your neighbor just received a credit offer in an e-mail. The company is offering him $6,000 at 12.8 percent interest. The monthly payment is only $110. If he accepts this offer, how long will it take him to pay off the loan? (Points : 3)

81.00 months
81.50 months
83 months
82.17 months
90.70 months

13. (TCO 3) Fine Oak Woodworks is considering a project that has cash flows of $5,000, $3,000, and $8,000 for the next three years. If the appropriate discount rate of this project is 10 percent, which of the following statements is true? (Points : 3)

The current value of the project’s inflows is $16,000
The approximate current value of the project’s inflows is $13,000
The current value of the project’s inflows is somewhere in between $14,000 and $16,000
The project should be rejected because its present value is negative

14. (TCO 4) You are considering two investments. Investment I is in a software company, and Investment II is an engineering company. The investments offer the following cash flows:

YearSoftware CompanyEngineering Company

If the appropriate discount rate is 10 percent, what is the approximate present value of the Engineering Company investment? (Points : 3)

$33,200
$34,500
$42,000
$43,500

15. (TCO 3) North Bank offers you an APR of 9.76 percent compounded semiannually, and South Bank offers you an effective rate of 9 percent on a business loan. Which bank should you choose and why? (Points : 3)

South Bank because its effective rate is higher.
North Bank because the APR is lower.
South Bank because its effective rate is lower.
North Bank because its effective rate is lower

1. (TCO 3) Tim needs to borrow $5,000 for two years. The loan will be repaid in one lump sum at the end of the loan term. Which one of the following interest rates is best for Tim? (Points : 3)

7.5 percent simple interest
7.5 percent interest, compounded monthly
8.0 percent simple interest
8.0 percent interest, compounded annually
8.0 percent interest, compounded monthly

2. (TCO 3) Which one of the following is an example of an annuity, but not a perpetuity? (Points : 3)

unequal payments each month, for 18 months
payments of equal amount each quarter forever
unequal payments each year forever
equal payments every six months for 48 months
unending equal payments every other month

3. (TCO 3) Fanta Cola has $1,000 par value bonds outstanding at 12 percent interest. The bonds mature in 25 years. What is the current price of the bond if the YTM is 16 percent? Assume annual payments. (Points : 3)

$1315
$1300
$756
$1000

4. (TCO 6 and 8) Which one of the following statements is correct? (Points : 3)

Bond issuers maintain a listing of bondholders when bonds are issued in bearer form.
An indenture, is a contract between a corporation and its shareholders.
Collateralized bonds are called debentures.
The description of any property used to secure a bond issue is included in the bond indenture

5. (TCO 3) Bonds issued by Blue Sky Airlines have a face value of $1,000 and currently sell for $1,180. The annual coupon payments are $125. If the bonds have 20 years until maturity, what is the approximate YTM of the bonds? (Points : 3)

10.50%
11.50%
11.75%
12%

6. (TCO 3) Bean Coffee issued preferred stock many years ago. It carries a dividend of $8 per share, fixed. As time has passed, yields have decreased from the original eight percent (at the time of issuance) to six percent. What was the current price of the stock? Hint: Yield is the same as required rate of return. (Points : 3)

$100
$133
$102
$86.40
None of the above

7. (TCO 3) Intelligence Research, Inc. will pay a common stock dividend of $1.60 at the end of the year. The required rate of return by common stockholders is 13 percent. The firm has a constant growth rate of seven percent. What is the current price of the stock? (Points : 3)

$23
$32
$27
$29

8. (TCO 3) Royal Electric paid a $4 dividend last year. The dividend is expected to grow at a constant rate of six percent over the next four years. Common stockholders require a 13 percent return. What are the values of the dividends for years 1, 2 and 3, respectively? (Points : 3)

$4, $4.5 and $4.8
$4.24, $4.76 and $5.05
$4.24, $4.49, $4.76
$4, $4.50, $5.05

9. (TCO 6) Which of the following is true regarding the primary market? (Points : 3)

it is the market where the largest number of shares are traded on a daily basis.
it is the market in which the largest number of issues are listed.
it is the market with the largest number of participants.
it is the market where new securities are offered.
it is the market where shareholders trade most frequently with each other

10. (TCO 6) A member of the NYSE who trades on the floor of the exchange for his or her personal account is called a(n): (Points : 3)

specialist.
independent broker.
floor trader.
stand-alone agent.
dealer

11. (TCO 6) The annual interest on a bond divided by the bond’s market price is called the: (Points : 3)

yield to maturity.
yield to call.
total yield.
required yield.
current yield

12. (TCO 6) Star Industries has one outstanding bond issue. An indenture provision prohibits the firm from redeeming the bonds during the first two years. This provision is referred to as a _____ provision. (Points : 3)

deferred call
market
liquidity
debenture
sinking fund

13. (TCO 8) Which of the following is true regarding bonds? (Points : 3)

Most bonds do not carry default risk.
Municipal bonds are free of default risk.
Bonds are not sensitive to changes in the interest rates.
Moody’s and Standard and Poor’s provide information regarding a bond’s interest rate risk.
None of the above is true

14. (TCO 6) Which of the following is not a floating-rate bond? (Points : 3)

A bond that adjusts the coupon payments based on an interest rate index, such as the T-bill.
An EE Savings Bond issued by the U.S. government.
A bond that does not have any coupons until maturity.
A bond that adjusts the coupon and face value payment based on inflation.
TIPS

15. (TCO 6) Which of the following is true regarding put bonds? Select all that apply: (Points : 3)

Have coupons that depend on the company’s income
Can be exchanged for a fixed number of shares before maturity only
Can be exchanged for a fixed number of shares before maturity
Allow the holder to require the issuer to buy the bond back

1. (TCO 1) In a general partnership, each partner is personally liable for: (Points : 3)

the partnership debts that he or she personally obtained for the firm.
his or her proportionate share of all partnership debts, regardless of which partner incurred that debt.
the total debts of the partnership, even if he or she was unaware of those debts.
the debts of the partnership, up to the amount he or she invested in the firm.
all personal and partnership debts incurred by any partner, even if he or she was unaware of those debts

2. (TCO 1) Trademarks are classified as: (Points : 3)

short-term assets.
current liabilities.
long-term debt.
tangible fixed assets.
intangible fixed assets

1. (TCO 1) Can you provide some examples of recent, well-known unethical behavior cases? Explain the situation in one or two sentences.

2. What are some real-life scenarios where you can apply the time value of money? Present two or three scenarios. Briefly explain your rationale.

3. Explain some of the key risks associated with bonds.

4. What are some of the features of zero-coupon bonds that make them attractive to certain investors? Which type of investors will be most interested in these bonds?

more...
No comment yet.
Scooped by Chadstorerg
Scoop.it!

BUSN 379 Entire Course | DeVry Online Help

http://www.devryonlinehelp.com/product/busn-379-entire-course/

Chadstorerg's insight:

http://www.devryonlinehelp.com/product/busn-379-entire-course/

 

BUSN 379 Week 1 Homework ES

BUSN 379 Week 2 Homework ES

BUSN 379 Week 3 Course Project Part 1

BUSN 379 Week 4 Midterm

BUSN 379 Week 5 Homework ES

BUSN 379 Week 6 Course Project Part II

BUSN 379 Week 7 Final Exam

BUSN 379 Week 7 Homework ES

more...
No comment yet.
Scooped by Chadstorerg
Scoop.it!

BUSN 278 Final Exam

http://www.devryonlinehelp.com/product/busn-278-final-exam-2/

Chadstorerg's insight:

http://www.devryonlinehelp.com/product/busn-278-final-exam-2/

 

1. (TCO 7) The first step in creating the master budget is the sales budget. Describe this budget and the information it includes. Why is the accuracy of the sales budget important?

2. (TCO 9) Understanding how costs behave can help managers plan operations and choose between various courses of action

3. (TCO 6) Yappy Company is considering a capital investment of $320,000 in additional equipment. The new equipment is expected to have a useful life of 8 years with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual net income and cash inflows are expected to be $25,000 and $65,000, respectively. Yappy requires a 10% return on all new investments.

4. (TCO 7) Roswell Company has budgeted sales revenue as follows for the next 4 months as follows:

5. (TCO 8) Eastern Company’s budgeted and actual sales for 2009 were

6. (TCO 9) The Mays Clinic has the following monthly telephone records and costs

1. (TCO 7) The first step in creating the master budget is the sales budget. Describe this budget and the information it includes. Why is the accuracy of the sales budget important? (Points : 20)

2. (TCO 9) Understanding how costs behave can help managers plan operations and choose between various courses of action

3. (TCO 6) Yappy Company is considering a capital investment of $320,000 in additional equipment. The new equipment is expected to have a useful life of 8 years with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual net income and cash inflows are expected to be $25,000 and $65,000, respectively. Yappy requires a 10% return on all new investments

4. (TCO 7) Roswell Company has budgeted sales revenue as follows for the next 4 months as follows:

5. (TCO 8) Eastern Company’s budgeted and actual sales for 2009 were

6. (TCO 9) The Mays Clinic has the following monthly telephone records and costs

(TCO 6) Yappy Company is considering a capital investment of $320,000 in additional equipment. The new equipment is expected to have a useful life of 8 years with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual net income and cash inflows are expected to be $25,000 and $65,000, respectively. Yappy requires a 10% return on all new investments

(TCO 7) Roswell Company has budgeted sales revenue as follows for the next 4 months as follows:

(TCO 8) Eastern Company’s budgeted and actual sales for 2009 were:

(TCO 9) The Mays Clinic has the following monthly telephone records and costs:

more...
No comment yet.
Scooped by Chadstorerg
Scoop.it!

BUSN 278 Budgeting and Forecasting - Course Project + Weekly Discussions + Midterm Exam | DeVry Online Help

BUSN 278 Budgeting and Forecasting - Course Project + Weekly Discussions + Midterm Exam | DeVry Online Help | BUSN 278 Full Course - DevryOnlineHelp | Scoop.it

http://www.devryonlinehelp.com/product/busn-278-budgeting-and-forecasting-course-project-weekly-discussions-midterm-exam/

Chadstorerg's insight:

http://www.devryonlinehelp.com/product/busn-278-budgeting-and-forecasting-course-project-weekly-discussions-midterm-exam/

 

Week 4 Midterm Exam

BUSN278 Course Project (Papa Geo’s Restaurant)

Project Overview:

This is an individual project where you will be acting as a consultant to an entrepreneur who wants to start a new business. As the consultant, you’ll create a 5 year budget that supports the entrepreneur’s vision and strategy, as well as the needs for equipment, labor, and other startup costs.

You can choose from one of three types of new business startups — a landscaping company, a restaurant, or an electronics store that sells portable computing devices. Each business has its own Business Profile detailed in the sections below. The purpose of the Business Profile is to guide you in understanding the scope of the business, the entrepreneur’s startup costs, and financial assumptions.

The project requires you to create a written budget proposal, a supporting Excel Workbook showing your calculations, and a PowerPoint presentation summarizing the key elements of the budget proposal, which you assume will be presented to a management team.

This is an individual project. Each week you will complete a section of the project in draft form. In Week 7, you will submit the final version of the project’s Budget Proposal, Budget Workbook, and Budget Presentation in PowerPoint.

Deliverables Schedule / Points

Week

Deliverable

Points

1

Section 1.0 Executive Summary (Draft)

10

2

Section 2.0 Sales Forecast (Draft)

10

3

Section 3.0 Capital Expenditure Budget (Draft)

10

4

Section 4.0 Investment Analysis (Draft)

10

5

Section 5.1 Pro Forma Income Statement (Draft)

10

6

Section 5.2 Pro Forma Cash Flow Statements (Draft)

10

7

Final Budget Proposal

90

7

Final Presentation w/ PowerPoint

30

 

Total project points

180

Business Profile:Papa Geo’s – Restaurant

Vision

The vision of the entrepreneur is to create a single-location, sit-down Italian restaurant called Papa Geo’s. The goal is to generate an income of $40,000 per year, starting sometime in the second year of operation, as wells as profit that is at least 2% of sales.

Strategy

a) Market Focus/Analysis

The restaurant targets middle to lower-middle class families with children, as well as adults and seniors, located in Orlando, Florida. The area within 15 minutes of the store has 10,000 families, mostly from lower to middle class neighborhoods. Average family size is 4 people per household. There is no direct competition; however, there are fast food restaurants like McDonald’s, Taco Bell and Wendy’s in the geographical target market. The lower to middle class population is growing at about 6% per year over the next five years in this area.

b) Product

The product is Italian food served buffet style, in an all-you-can-eat format, with a salad bar, pizza, several different types of pasta with three or four types of sauces, soup, desserts, and a self-serve soda bar. The restaurant is also to have a 500 square foot gaming area which has game machines that children would be interested in using.

c) Basis of Competition

Customers come to this restaurant because of the good Italian food at a low price – you can get a meal for $7, including drinks. Customers also eat at Papa Geo’s due to the cleanliness of the facility, the speed of getting their seat and food, and the vending machines which keep the children busy while adults enjoy their meal.

Startup Requirements*

Given Costs

· The cost of registering a limited liability company in Florida – filing fees listed at the bottom of the application for located at: http://form.sunbiz.org/pdf/cr2e047.pdf

· Renovation of the facility expected to cost $15,000

· Business insurance, estimated at $1,000 per year

· Health and other benefits are 20% of the salaries of the manager and assistant manager

Costs you should estimate through research, experience or other methods

Soda fountain bar 2 pizza ovens Salad and pizza/dessert bar Approximately 100 square foot commercial refrigerator 2 cash registers 6 video game vending machines Management office with desk and lower-priced laptop computer Staff lunchroom equipment such as microwave, sink, cupboards and refrigerator 20 four-seater tables with chairs Busing cart for transporting dirty dishes from the dining area to the dishwashing area 140 sets of dishes, including cutlery and drinking cups Commercial dishwasher Miscellaneous cooking and food handling equipment like trays, lifters, spoons, pots etcetera The cost of an average of 7 employees on the payroll. All operating costs, such as advertising, rent for a 3,500 square foot facility with male and female washrooms (already installed), utilities, maintenance, and annual depreciation

*If you have questions about startup requirements, or think other startup costs necessary for the business are missing, then make an assumption and state it in the relevant section of the report.

Given Financial Assumptions*

The owner will be granted a loan for the initial startup, repayable over 10 years at current interest rates for small business loans. The owner will use personal funds to operate the business until it generates enough cash flow to fund itself. Essentially, all sales are made by credit card. All credit card sales are paid to the restaurant daily by the credit card company. 2.5% of sales is paid to the credit card company in fees. Food suppliers give 30 days of trade credit. Inventories are expected to be approximately 10% of the following month’s sales. The average meal costs $4.00 in materials and labor. The average family spends $4.00 on vending machine tokens. Equipment is depreciated on a straight-line basis over 5 years. Managers have health benefits, other workers do not. The company will operate from 10:00 am to 9:00 pm, 7 days a week. The entrepreneur will manage the store and draw a salary. Every shift has one person on the cash register, one keeping the food bars stocked with food, two cooking the food, one on busing and table cleaning, a manager, and assistant manager.

*If you believe any other assumptions are necessary, please state them in your budget proposal.

All 7 Weeks Discussions BUSN278

w1 dq1 Budgeting and Planning

w1 dq2 Forecasting Techniques

w2 dq1 Linear Regression

w2 dq2 Seasonal Variations

w3 dq1 Revenue Budget

w3 dq2 Capital Expenditures Budget

w4 dq1 Capital Budgeting

w4 dq2 New Business Startups

w5 dq1 Master Budget

w5 dq2 Cash Budgeting

w6 dq1 Cost Behavior

w6 dq2 Variance Analysis

w7 dq1 Administering the Budget

w7 dq2 Presenting and Defending a Budget

more...
No comment yet.