Fin 419 Week 5 Team Assignment with Answers

The West Midlands town of Stafford has a population of 68,472 and lies within the county of Staffordshire. Jobs in Stafford are strong in a number of areas, including public sector work and heavy electrical engineering. Those living in Stafford will find that average rent prices are slightly cheaper than the overall county, at £561 pcm (home.co.uk). The main train station in the town is Stafford Railway Station, which connects to the West Coast Mainline, providing easy access to Liverpool and London. By car, the M6 is straightforward to get onto from two junctions in the town. For entertainment, Stafford Gatehouse Theatre is the central hub for music and comedy, and the local Shire Hall is home to an art gallery.

The CanGo Company had experienced many obstacles and conflicts during the development of the proposed online gaming services. It is imperative for CanGo to review or to identify any problems that could threaten the company’s future goal. First of all, All team management of the company need to have a clear vision about the company’s long term planning, and analyze very carefully what audience would be targeted for the online gaming services. Also CanGo needs to perform a reliable analysis about their financial status, and making sure that they have the equipment is fully functional and available necessary before they start on new online gaming project. CanGo should also consider that each staff is fully aware about the CanGo’s mission, and this would be a positive way for the company to successfully achieve its goal.

Currently, I am going to school to receive a degree in Business Administration. I have worked for In-N-Out Burger for over three years, and plan to use my degree to move up in the company. As of July 7, 2015, I was hired in the corporate office for In-N-Out Burger to work in their Customer Service Department. This is a promotion for me, as I was working in the restaurant before. I plan to continue moving up in the company, even more so when I have my degree. I want to secure a positon in Human Resources for the company.

In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.

Hello, I go by Josh and i am a second year student in the social organizational psychology program. I am currently a TA at teachers College. I have previous experience in Human Resources and recently completed HR internships. I am looking forward to having very engaging class discussions regarding the case homework assignments! I am looking forward to completing this course because I want to be able to discuss issues with different departments while being able to provide creative solutions. I can already tell that this course will be a challenge but I look forward to watching my analytical abilities grow to new heights that I previously did not think was possible.

To find the break-even point for napkins, you use the same formula. The fixed cost is still $420,000.00. The selling price of napkins is $7.00. The variable cost is $4.50. $7.00 minus $4.50 is $2.50. So then you take $420,000.00 and divide it by $2.50 to find the breaking point of $168,000.00. The company will have to sell $168,000.00 to break even in sales. The margin for safety for napkins is -$48,000.00. This is found by subtracting the actual or expected cost of $120,000.00 by the break-even point of $168,000.00. You can cut sales by $48,000.00 and not sustain a loss.

As opposed to purchasing new equipment, we could opt to maintain the equipment we currently have, which has an estimated service life of 11 years remaining. We could retain all of our claimed Investment Tax Credit for this purchase, which has two years of depreciation left, and would not be required to invest in any new training for our employees. We would recognize $31,000 in depreciation in present value terms, as well as save an estimated $200,000 in training costs and losses due to lower production during the “learning curve”. I estimate these savings to be approximately one month of payroll to include both the time spent on training, and our reduced production as employees learn how to use the new equipment. Additional detail of this option is provided in Appendix B, C, & D.

ML had developed a policy of selling manual machines and renting automatic machines. Manual machines did not cost much, did not require service, and could be modified to attach different fasteners inexpensively. Automatic machines were rented on an annual basis because they would have been more expensive to sell and it provided annual income to ML. However, about 700 of the rented machines were returned each year. During the time that machines were in inventory, ML would modify the machines to attach different fasteners. This was expensive with an average cost per modification of $2000. If all 700 machines were modified during a given year this would have cost $1.4 million per year. It was also industry practice to provide preventative maintenance and

Estimated machinery life: 3 years (after which there will be zero value for the equipment and no further cost savings)

Question 4: Calculate each of the three products’ break even points using the data. Why is the sum of these three volumes not equal to the 1,100,000 unit’s aggregate break-even volume?

The main difference between investing in the Zinser machine and maintaining the status quo is an initial investment of $8.25 million and the receipt of $608,000 in after-tax sales proceeds from selling the existing machine. Additionally, there is an initial $50,000 ($32,000 after-tax) cost for training employees, but this cost is only incurred once (see exhibit 3). In their first year using the Zinser machine there will be a 5% decrease in sales volume, but selling price will increase 10%. Material costs per pound will be the same as the status quo, but conversion costs will decrease to $0.4077 per pound per year due to lower power, maintenance and return costs. Days of inventory held will also drop to about 20 days. All other assumptions are the same as the status quo. In this scenario, the NPV of the Hunter Plant is about $15.87million if Aurora invests in the new Zisner machine (see exhibit 3).

Net initial investment: $8.25 million. The total cash payment is offset by the after-tax proceeds from the sale of the existing spinning machine.

I would estimate the incremental cash flows over the economic life of the new machine, taking into consideration the after-tax salvage values of the old and new machine respectively. Changes in net working capital would be figured in as well. For the terminal year, we would assume that the net working capital is recovered and treat it as a cash inflow.