Expert Answers

Truck Parts, Inc. (TPI), often sells supplies to United Fix-It Company (UFC), which services trucks. Over the phone, they negotiate for the sale of eighty-four sets of tires. TPI sends a letter to UFC detailing the terms and two weeks later ships the tires. Is there an enforceable contract between them? Why or why not?

Trudeau’s Marine, Inc., reported the following selected amounts in its Financial Statements for the year ended December 31, 2016:

Requirement 1. Determine the following for Trudeau’s Marine, Inc., during 2016. a. Collections from customers b. Payments for inventory c. Payments of other operating expenses d. Acquisitions of property and equipment; no sales were made during 2016 e. Long-term borrowing, assuming Trudeau’s Marine, Inc., made no payments on long-term liabilities f. Proceeds from issuance of common stock g. Payment of cash dividends

Transcribed Image Text:

Income Statement 2016 2015 Net Sales. Cost of Goods Sold. Depreciation Expense.. Other Operating Expenses. Income Tax Expense. $768,500 $640,400 459,800 384,200 23,600 25,200 101,400 83,700 37,200 44,600 137,500 111,700 Net Income Balance Sheet 2016 2015 Cash and Cash Equivalents. Accounts Receivable $ 24,600 $ 15,500 3,900 6,400 32,600 28,700 288,100 246,500 13,600 Inventories. Property and Equipment, Net. Accounts Payable. Accrued Liabilities. Long-Term Liabilities Common Stock. 15,900 5,400 190,300 160,300 85,000 7,300 65,000 Retained Earnings 48,700 54,800

Trudy Green works for the True-Green Lawn Company. Her job is to solicit lawncare business via the telephone. Listed below is the number of appointments she made in each of the last 25 hours of calling. What is the Arithmetic Mean number of appointments she made per hour? What is the median number of appointments per hour? Write a brief report summarizing the findings.

Transcribed Image Text:

2 6 4 4 7 2 6 4 4 7 8 4 4 4 8 3 3.

True, false, or uncertain: Financial engineering always leads to a more efficient financial system.

True Fresh Grocery operates a chain of 40 grocery stores. Currently the company is considering starting a new division, TrueFresh.com, to provide home delivery services. Customers will be able to order groceries by phone or using the Internet, and TrueFresh.com will deliver them within 24 hours at a price guaranteed to be identical to the prices charged in the company’s stores. The company has projected revenue and cost related to this business for the next 7 years, as follows:

The business will require an initial investment in delivery trucks and other equipment of $500,000. The trucks and equipment will be depreciated over a seven-year life using straight-line Depreciation with a Residual Value of $80,000. Required: Assume that True Fresh has decided to limit its analysis to 7 years. Calculate the Net Present Value of the new business using a 14 percent Required Rate of Return. Should True Fresh make the investment in the new business?

Transcribed Image Text:

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Revenue $1,700,000 $1,870,000 $2,057,000 $2,262,700 $2,488,970 $2,737,867 $3,011,654 Less expenses: Cost of merchandise 1,120,000 1,175,000 1,200,000 1,200,000 1,260,000 1,300,000 1,375,000 Salaries 350,000 365,000 380,750 397,000 414,652 432,884 462,030 Depreciation 60,000 60,000 60,000 60,000 60,000 60,000 60,000 Miscellaneous 20,917 1,661,667 27,015 23,333 1,553,333 21,667 1,621,667 28,000 28,783 1,761,667 27,970 1,925,000 Total expense 1,685,000 1,821,667 Income before taxes 146,667 248,333 395,333 577,700 727,303 916,200 1,086,654 Taxes at 40% 58,667 99,333 158,133 231,080 290,921 366,480 434,662 Net Income 88,000 $ 149,000 237,200 $ 346,620 $ 436,382 $ 549,720 $ 651,992

Managerial Accounting Definitions

Job Order CostingPredetermined Overhead RatePro Forma Financial StatementsShare of WalletWhat if AnalysisLaw of One Price

Managerial Accounting Definitions

True or false: All assets are liquid at some price. Explain.

Corporate Finance Definitions

AmortizationAccounts ReceivableAccounts PayableAngel InvestorsAnnual Percentage RateArbitrage

Corporate Finance Definitions

True or false: “If the errors in a Regression model contain ARCH, they must be serially correlated.”

True or false: The most important characteristic in determining the expected return of a well-diversified portfolio is the variances of the individual assets in the portfolio. Explain.

Corporate Finance Definitions

AmortizationAccounts ReceivableAccounts PayableAngel InvestorsAnnual Percentage RateArbitrage

Corporate Finance Definitions

True or false: The Unsystematic Risk of a share of stock is irrelevant for valuing the stock because it can be diversified away; therefore, it is also irrelevant for valuing a Call Option on the stock. Explain.

Corporate Finance Definitions

AmortizationAccounts ReceivableAccounts PayableAngel InvestorsAnnual Percentage RateArbitrage

Corporate Finance Definitions

True or False: WLS is preferred to OLS when an important variable has been omitted from the model.