estimates that Armour Transport’s cash flow next year will be −$50‚000‚ $150‚000‚ or $250‚000‚ with the following probabilities: 50% 40% 30% 20% 10% 0% ($50‚000) $150‚000 $250‚000 A. To find the expected value‚ we will weigh each of the possible outcomes by its associated probability‚ then add the products. We show this calculation using the spreadsheet below: state of economy recession normal expansion A B C = A*B probability 30% 50% 20% cash flow
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“Chrysler In Trouble” MGMT 479H Chrysler started as a merger of two men‚ one of whom was having declining sales after World War 1 in the 20’s which caused him to have high debts. Walter T. Chrysler joined Maxwell Motor Corporation to help bring the company back from the high debts. In 1924 the first Chrysler was launched in the automobile market. Over the years the company introduced many different models. They also developed by the end of the 1950’s the HEMI engine along with power
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ZENG Mengyun 52639616 Zhou Yunqi 52638828 1. CRC will improve its ability to plan its cash receipts. For the new membership and fee structure‚ it is more predictable in a sense that CRC get the prepaid membership fees at the beginning of the year. In addition‚ by using new membership and fee structure‚ cash receipts are also more certain. Since there are also a lot of variable factors that affect the cash receipts by using hourly court fees. These variable factors include peak hours‚ peak season
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A). When looking at the balance sheet‚ the first noticeable signal among assets is the rapid increase in accounts receivable in years 12‚ 13‚ and 14. It means that there are more products sold in credit than in cash and direct useable funds. Another signal is the sudden increase in inventories in years 12‚ 13‚ and 14. The previous three years‚ inventories slightly decreased. Only from year 11 to year 12 inventories almost triples and keeps increasing significantly the next two years. It shows there
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investment‚ and simultaneously increasing cash flow. 3: To achieve the goal of making money‚ organizations should increase throughout while simultaneously reducing both inventory and operation expenses. 4: When throughout rate increases‚ the time of occupied capital on the goods under production decreases‚ thus increasing the cash flow. 5: When the inventory decreases‚ the capital occupied on the inventory has decreases‚ thus increasing the cash flow. 6: When customer responding time decreases
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Terms to Learn: operating budget The production budget should be based on the revenues budget. 5. The operating budget is that part of the master budget that includes the capital expenditures budget‚ cash budget‚ budgeted balance sheet‚ and the budgeted statement of cash flows. Answer: False Terms to Learn: operating budget Described is the financial budget part of the master budget‚ not the operating budget. 6. Opportunity costs never appear in a company’s accounting
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Capital Budgeting Methods and Cash Flow Estimation 53 PRAIRIE WINDS PASTA Directed In the early 1990s‚ the farm economy in the heartland of the United States was weak. Farmers in North Dakota produced hard‚ amber Durham wheat and exported 75% to Italy for the production of high quality pasta. Prices for raw wheat fluctuated radically‚ depending on weather and growing conditions. Many farmers were having difficulty meeting payments for the expensive farm machin- ery required for crop production
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pharmacies use the economic order quantity (EOQ) methodology to establish a benchmark for inventory levels (Beier‚ 1995‚ p. 160). To maximize profitability of hospital pharmacies‚ efficient inventory management is vital. A major cause of insufficient cash flow is acquiring too much inventory. Disproportionate
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SAIC: AT A GLANCE I. Recommendations II. Company Backgroundu Science Applications International Corporation (SAIC)‚ headquartered in McLean‚ Virginia is a publicly traded Fortune 500 company that provides information technology services to promote security and overall safety worldwide. SAIC delivers scientific and technological products and services in the computer integrated-systems design sector. Total SAIC personnel consists of 41‚100 employees worldwide (Hoover’s‚ 2012). SAIC secures
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$275‚000 72‚000 7‚500 12‚960 92‚460 55‚000 $422‚460 $495‚000 Part 1 Cash flows over the life of the project Item Annual cash savings Tax savings due to depreciation Total annual cash flow Before Tax Amount $72‚540 32‚000 Tax Effect After Tax Amount 0.65 $47‚151 0.35 $11‚200 $58‚351 Part 2 Payback Period $200‚000 / $58‚351 = 3.43 years Part 3 Annual rate of return Accounting income as result of decreased costs Annual cash savings Less Depreciation Before tax income Tax at 35% rate After tax
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