accounting 2110 : principles of managerial accounting

Activity 2 Name: Aaron Rodriguez SID: 304949598 1.     “I Can’t Decide!” Implement the decision-making steps to help fictional classmate Tran decide whether or not he should attempt to buy from a used car dealership a Mercedes-Benz, a car he’s dreamed of owning.  He has enough money for a small down payment. Report on your decision and explain your reasoning. Car Price:                                             $30,000 Down payment available:                $2,000 Current Loan rates:                           8% Monthly Income:  ...

ACCT 2110 Managerial Accounting Food Truck Project-Cost Sheet Dr. Xiaojie Christine Sun Slides and Presentation Guidelines Prepare the slides for your presentation. The slides should include but not limited to the following sections: Introduction of your group, food truck business, and product. Determine all the costs of your business, including how you determine the costs. You can use example in DM, DL, OHD, and S&A. Estimated sales and price. Show your reasons. Sales budget. CVP income statement or indicate variable costs, contribution margin, and fixed costs of your food truck. CVP analysis. Comments on the business, e.g. how much is your estimated profit; any outside factors that may affect your sales and your profit, etc.

6.24;Higher expected rate of return generally comes with higher risk. 6.26: The expected payoff is $99. The discounted payoff is $99/(1+5%)=$94286 which is the promised 6.06% 6.28:yes in order for it to be a good investment the rate of return would have to be lower that 7% because Disney may go bankrupt 6.30: Moodys and Standard Porrs are the main rating agencies which are investment and speculative grades Investment grade defaults are less than 5% speculative are around 20%.

9.4: Return the money to your inventors, or invest in another project which is mean-variance efficient so that it matches the market or risk-free rate of return 9.6:  You can adopt historical averages, or use historical dividends or earnings yield, or estimate what it would take to entice reasonable investors to be indifferent between stocks and bonds, or conduct a survey of users 9.8:

18.24 : You must assume that both kinds of kinds of investments are taxed at the same marginal rate 18.26: With debt financing , income tax per year = [ $500,000 - (1,300,000*8%]* 40%= $396,000*40%= $158400 and Net Income is $237,600[$500,000-$104,000-$158400] If all cash financing, income tax per year = $500,000 *40%= $200,000 and Net income is $300,000 Annual tax savings = $200,000-$158,400=$41,600 each year for two years, so PV=$41,600/1.10+41,600/1.1^2 aprox. $72,198 18.28 a.) The overall cost of capital for the firm is constant at 15%. The net per tax return is $500 million, so after-tax return is $500*(1-0.25)= $375 million. If the firm is fully equity financed, its value  is $375/1.15 aprox. 326.087 million b.) As shown in previous calculation, the firm has a value of $375/1.15 approx. 326.087 million. Now we look at interest tax shield. If 50% had been financed with debt the debt would have been 0.5*(326.087) approx. 163.04 million. The expected return on the debt ...

19.28 Dead weight costs are high, for example, in firms in which consumers have to make an investment in the project, and in firms that have very illiquid assets 19.30 a.) Yest it happens immediately( in one day), so this project has a PV of 50%*$10+50%*$40= $25 and an NPV of $25-$20=$5 b.) Shareholders would have to put in $20. In the downstate, the extra $10 go to creditors. In the upstate, they get $20. They would vote against it, because their expected cash flow would be 50%*$0+50%*$20=$10. Creditors would love this- but they do not get to decide. c.) The existing creditors would now receive either $60+ $10 or $60+$40, with equal probability. They would therefore receive $85. They would like this, because they would recieve the entire benefit d.) The second arrangement is better for a firm-value perspective 19.32 Firms in which the managers are well-entranced would be most tempted by free cash flow 19.34 Advantage. There will be no conflicts between creditors and ...

5.22: Over 2 years you would have either owned 16.6% or 16.4% because (1+6%)(1+10%)-1=16.6%or (1+3%)(1+13%)=16.4% .Over 5 years you would get  115.5% or 1078 for stock and and 113.6% or $1068 for stock B 5.24: The compounded geometric rate of return is 12.9%. The average arithmetic rate of return is 13.4%. The arithmetic average is always the preferred number because it is always the higher number 5.26: r5=10%(1+r0,5)(1+r5)^5=1.6105making the 5 year total return 61.05 5.28 a.) 85.03 b.)6.35%  1.0635^10=1.8503

Traphouse to Go Group B Rodriguez, Aaron Conrad Thach, Adrian Xu, Zeyao Song, Haoyuan Huang, Jieying Introduction Introduction Our food truck is open for 3 hours a day and will sell Ramen at 7.50 per bowl, Monday-Friday 12-3pm, on the CSULA campus. We cut the line off after the 3 rd hour and finish the orders present. Meals are cooked the night before and are prepared on site. Preparation takes a few minutes cooking takes hours. Each month we plan to make 120 bowls per hour and 2 bowls per minute and 7200 bowls per month.   Ramen Direct Material Maruchan Ramen pack - $0.324 for 6 oz 12 for $1.94 at Walmart Great Value: 100% Extra Virgin Olive oil $5.94 at Walmart for 51 oz - $0.16 for 4 cloves or 1/4 of one bulb of garlic Kikkoman Naturally Brewed Soy Sauce $11.22 at walmart for 1.25 qt - $0.044 every 1 tablespoon = 0.5 oz Great Value Chicken Broth $1.98 at walmart for 48 oz - 4 cups = 32 oz. every 32 o...