Armendez | 2010-13706 HRIM 115 Assignment No. 8 on Variance Analysis 1) Holiday Hotel budgeted 1‚000 room sales for the week ended September 10. The estimated average price per room was $28.50. The actual average price per room was 20% greater than anticipated‚ while room sales in units were 10% less than forecasted. a) Required : Compute and analyze the Room Revenue variance as discussed in class. Give 2 possible causes for the revenue variance (i.e. Why was actual price greater than budgeted
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Capital Budget Recommendation Guillermo Furniture Overview Guillermo Navalez is an owner of a small furniture manufacturing company near his home‚ Sonora‚ Mexico. Sonora offers mild weather‚ beautiful scenery‚ and inexpensive housing. Guillermo is the largest manufacturer of furniture in his area where the supply of timber for tables and chairs is easily accessible due to the nature of resources (University of Phoenix‚ 2010). Labor is also inexpensive and Guillermo was making profit up until
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product lines‚ new equipment and other assets‚ managers must know the cost of obtaining funds to acquire these assets. The cost associated with different sources of funds is called the cost of capital. . If the business earns more than its cost of capital‚ the market value of the business will increase. Likewise‚ if returns on long-term investments are below the cost of capital‚ market values will decline. Therefore‚ how we manage capital is extremely important to fulfilling the basic objective of increased
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Variance Analysis: Year 6 In this part of the report‚ we analyze the variances between our pro-forma statements we had projected and the actual results we received from the BPG game. Looking at the variances‚ it can be seen that most of the numbers compared are not too far apart from each other when comparing our actual numbers to the projected analysis. This is due to the fact our forecast was successful. It was however not 100% accurate in terms of predicting our future numbers. Looking at the
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Chapter 8 The Cost of Capital 236 CHAPTER 8—THE COST OF CAPITAL TRUE/FALSE 1. Capital refers to items on the right-hand side of a firm’s balance sheet. 2. The component costs of capital are market-determined variables in as much as they are based on investors’ required returns. 3. The cost of debt is equal to one minus the marginal tax rate multiplied by the coupon rate on outstanding debt. 4. The cost of issuing preferred stock by a corporation must be adjusted to an after-tax
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Variance Analysis is used to promote management action in the earliest stages. It is the process of examining in detail each variance between actual and budgeted costs to conclude the reasons as to why the budgeted amount was not met (Ventureline‚ 2012). There are several factors that go into a variance report. One is the assumption of the department. The second is the risk of the assumption. And thirdly the actual expense used to portray the budget. The vice president announces the budget that needs
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Question 1 If I buy the T-note‚ FV=$1000 If I leave the money in the bank‚ FV=PV(1+Inom/M)MN+$10=900（1+5%/365)270+$10=$943.91 $1000>$943.91‚ so the greatest future wealth is $1000 If I buy the T-note， PV=FV/(1+Inom/M)MN=1000/(1+5%/365)270=$963.95 If I don’t buy it‚ PV is $910. $963.69>$910‚ the greatest wealth today is $963.69 Leaving the money in the bank‚ the effective rate of return is: EFF=(1+Inom/M)M-1=（1+5%/365)365-1=5.13% For the T-note 1000=910(1+I)270‚ I=0.034936%‚ EFF=(1+Inom/M)M-1=(1+0
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Variance Analysis HCA-530 Sue P. Gombio Grand Canyon University Variance Analysis is utilized to support the management during the initial stages. It is the procedure of investigating each variance between the actual and budgeted costs to determine the reasons as to why the planned amount was not met‚ in more detailed explanation (Ventureline‚ 2012). There are several influences that contribute to the variance report and one is the department’s assumptions‚ second is the possible risk
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Part I: The Operating Budget for the City of Kyle Texas Joseph E.Chestnut Jr Strayer University PAD 505 Public Budgeting and Finance Professor Joseph Keller May 3‚ 2015 Introduction The city of Kyle‚ Texas is on its way to becoming a full service community with targets to continue to grow their quality healthcare‚ higher education‚ and retail industries for the benefit of the local residents. According to the City Kyle website‚ Kyle is home to over 60‚000 persons with a projected growth rate
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What’s your real cost of capital? By James J. McNulty‚ Tony D. Yeh‚ William s. Schulze‚ and Michael H. Lubatkin Harvard Business Review‚ October 2002 Issue of the article: valuing investment projects Number of pages: 12 Daniel Miravet Campos Part 1. Executive summary This article is fundamentally based on the exposition of a new method to calculate the cost of capital for a company (MCPM)‚ to meet the inefficiencies of the current one (CAPM). In valuing any investment project or
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