Assignment
Financing Operations
1. What forms of financing would a company pursue in Growth2 of the Financing life cycle?
2. List an advantage and disadvantage of obtaining funds from "Angel Investors"
3. Companies continue to receive funds in the Secondary Market? T F
4. Identify a primary difference between common and preferred stock.
5. Which financing life cycle phase would a company pursue an IPO?
Breakeven Analysis
6. Fixed Expenses change in total when there is a modest change in sales. TRUE FALSE
7. An example of a fixed expense would be a 5% sales commission. TRUE FALSE
8. Property taxes and rent are often considered variable expenses. TRUE FALSE
9. Variable expenses change in total as volume changes. TRUE FALSE
10. If a company requires a profit of $30,000 (instead of breaking even), the $30,000 should be combined with the fixed expenses in order to compute the point at which the company will earn $30,000. TRUE FALSE
11. The contribution margin per unit is the selling price per unit minus the fixed expenses per unit. TRUE FALSE
Use this information to answer questions 12 through 14: SHOW YOUR WORK
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Selling price per unit
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$17
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Fixed expenses
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Selling & administrative
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$130,000
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Interest expense
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$10,000
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Variable expenses
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|
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Cost of goods sold
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$3
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Selling & administrative
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$4
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12. What is the company's contribution margin?
13. What is the break-even point in units?
14. If the company wants to earn a profit of $ 20,000 instead of breaking even, what is the number of units the company must sell?
Business Cash Flow
15. From a cash flow perspective, what does it mean to "train your customers"?
16. How can a business use vendors to help with the cash flow of a business?
Internal Control
17. Separation of Duties in a small business is not a practical internal control solution due to the small number of employees T F
18. Identify two prevention techniques that a small business owner might employ to prevent fraud
19. What is the number one way that fraud is detected?
20. The company accountant should open and reconcile the monthly bank statement before anyone else can gain access to the data in order to prevent fraud. T F
Breakeven Analysis
Your client manages a daycare center. Costs are as follows:
Food costs $ 90
Rent 36,000
Salaries 80,000
Material costs 60
Taxes 20,000
Insurance 12,000
Miscellaneous 8,000
You currently charge $ 500 per month per child. You plan a profit of $ 25,000 per year.
Using the Breakeven analysis spreadsheet, complete the analysis and save the file as BE1. Submit via Canvas.
Answer the following questions
Total Variable Costs ___________
Total Fixed Costs ___________
Breakeven Point in Units per year ___________
Breakeven Point in Dollars per year ___________
Your friend is considering moving the business location to a more expensive neighborhood. Costs will change as follows:
Food costs $ 120
Rent 50,000
Salaries 100,000
Material costs 75
Taxes 30,000
Insurance 14,000
Miscellaneous 12,000
The monthly fee per child would be $ 700 and the profit component would increase to $ 50,000.
Answer the following questions
Total Variable Costs ___________
Total Fixed Costs ___________
Breakeven Point in Units per year ___________
Breakeven Point in Dollars per year ___________
Using the Breakeven analysis spreadsheet, complete the analysis and save the file as BE2. Submit via Canvas.
Based on your review of the two scenarios list the pros and cons of moving to the new location. Make sure you include data from the spreadsheets to support your answer. Use Word to complete your answer. Submit via Canvas
PROS
CONS
RECOMMENDATION
Cash Budget
Access the Car Detailing Analysis (document in Canvas, under Test 3 instructions). Complete the Cash Budget (file in Canvas, under Test 3 instructions). The breakdown of sales per month are as follows:
Month 1 20 Month 7 120
Month 2 30 Month 8 130
Month 3 60 Month 9 120
Month 4 60 Month 10 90
Month 5 70 Month 11 40
Month 6 120 Month 12 50
Starting cash =$ 2,000
Upon completion of the Cash Budget, answer the following questions:
1. What month has the highest cash deficit Month___________ Amount_________
2. What month has the highest cash surplus Month___________ Amount_________
3. What month(s) must the company borrow money Month(s)__________________
4. What is the ending cash balance for Month 6 ____________
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also include a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also Include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.