ACT 5733 – Advanced Managerial Accounting Fall 2012 HW #3 Question #1 Consider the following potential investment‚ which has the same risk as the firm’s other projects: Time Cash Flow 0 -$95‚000 1 $20‚000 2 $24‚000 3 $24‚000 4 $24‚000 5 $24‚000 6 $32‚000 a) What are the investment’s payback period‚ IRR‚ and NPV‚ assuming the firm’s WACC is 10%. b) If the firm requires a payback period of less than 5 years‚ should this project be accepted? Answer: Yes it should accept
Premium Net present value
1. Basic Concepts Product cost = Direct Labor (DL) + Direct Materials (DM) + Manufacturing Overhead (MOH) Financial accounting Managerial Accounting + Sales + Sales - COGS - Variable Costs = Gross Profit = Contribution Margin - SG&A - Fixed Costs = Net Profit = Net Profit COGS (Cost of Goods Sold) is an “inventoriable cost” ( recorded in the Balance Sheet as inventory and expensed (Income Statement) when goods are sold SG&A (Selling‚ General & Administrative) are
Premium Costs Management accounting Cost
Managerial Accounting Reality Check Summaries Professor Shin Hee-Lim Shin 1001006 Reality Check – What’s your blog’s ROI? Summary ROI has been always one of the important factors to determine how profitable the business is doing. However‚ for until last few decades‚ ROI was only implementing to evaluate the hard assets like buildings and equipment. But in nowadays‚ many companies are using ROI to evaluate the investment in technology‚ such as blog. As a following example‚ it shows that
Premium Time Corporation Economics
Case Study in Managerial accounting Case 1: Southwest Airlines Part A : General Information Company Name: Southwest Airlines Co. Company is traded on the New York Stock Exchange trade market (NYSE) with symbol LUV. Corporate Headquarters are located at the physical address: 2702 Love Field Drive‚ Dallas‚ Texas 75235. Corporate Web Site: http://www.southwest.com. Corporate Web Site for business travelers: http://www.swabiz.com/ Industry Classification Company operates in the Industrial
Premium Airline Southwest Airlines
is: Analysis Period amount/Base Period Amount x100 9. One of several ratios that reflects solvency includes the: Debt-to-equity ratio 10. Current assets divided by current liabilities is the: Current Ration 11. Ch.18 Managerial accounting is different from financial accounting in that: (users and decision makers‚ purpose of info‚ flexibility of practice‚ timeliness of information‚ time decision‚ focus of information‚ nature of information) 12. Which of the following items are management concepts
Premium Variable cost Costs Fixed cost
Southwest Airlines Motivational Profile A motivational profile can provide insights into whether a company is doing the right thing or requires improvements. Although nearly every company proclaims its goal is to deliver exceptional service‚ research confirms that the service quality of many corporations is below consumer expectations. Southwest Airlines has created a competitive advantage through valuing employees’ needs as a strategy that motivates them to provide better customer service (Hallowell
Premium Southwest Airlines Airline
| SOUTHWEST AIRLINES‚ INC | CASE STUDY ANALYSIS | COMPARING PAST WITH PRESENT | | 12/14/2010 | STRATEGIC MANAGEMENT (Section F) Course Instructor: Mr. AbdulQadir Molvi Submitted by (Alph. Order): NUTS AND BOLTS Abdul Basit Malik (9045) Hafsa Saleem (8828) Maaz Ismail (7192) Muhammad Faizan Ali (7126) Muhammad Hassan (8780) Saba Muhammad Arif (9313) Sana Tawfik (8609) LETTER OF ACKNOWLEDGEMENT Our instructor MR. ABDUL QADIR MOLVI assigned a report of STRATEGIC MANAGEMENT
Premium Southwest Airlines Airline Los Angeles International Airport
At the onset of the airline industry in the United States‚ major network airlines were the sole providers of air travel. This multifaceted industry was a difficult industry to break into as a consequence of “sophisticated customer segmentation‚ hub-and spoke models and costly information systems for reservations‚ fare wars and intense competition” (Thompson 2008). Shrinkage in airline ticket prices augmented the demand for airline travel. Many markets were simply deserted or over-looked by major
Premium Airline Southwest Airlines Boeing 737
References: Edmonds‚ T.P.‚ Tsay B.‚ & Olds‚ P.R. (2011). Fundamental Managerial Accounting Concepts. New York‚ NY: McGraw-Hill Itrwin.
Premium Costs Activity-based costing Management accounting
Illustrate the meaning of “Sustainable Competitive Advantage”. What was the main strategy adopted by Southwest Airlines that made it successful in the airline industry? Competitive advantage is a position of a company in a competitive landscape that allows the company earning return on investments higher than the cost of investments. Competitive advantage should be relevant‚ unique and sustainable. Therefore sustainable competitive advantage‚ it’s a long-term competitive advantage that a company
Premium Southwest Airlines Airline