A company has the following expenditures during the year. 1) Advertising 100,000, 2) employee training 80,000, and Customer outreach and consultation 50,000. The company believes that these efforts have increased the fair value of the entire company by $325,000. How much goodwill can the company recognize at the end of the year associated with these expenditures?
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A company has the following expenditures during the year. 1) Advertising 100,000, 2) employee training 80,000, and Customer outreach and consultation 50,000. The company believes that these efforts have increased the fair value of the entire company by $325,000. How much
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- Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 20% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B Initial investment: Cost of equipment (zero salvage value) $ 260,000 $ 470,000 Annual revenues and costs: Sales revenues $ 310,000 $ 410,000 Variable expenses $ 144,000 $ 194,000 Depreciation expense $ 52,000 $ 94,000 Fixed out-of-pocket operating costs $ 76,000 $ 58,000 The company’s discount rate is 18%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor using tables. Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. 3. Calculate the internal rate of return for each…Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five- year period. His annual pay raises are determined by his division's return on investment (ROI), which has exceeded 18% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: $ 170,000 $ 380,000 Sales revenues Variable expenses $350,000 $ 250,000 $ 120,000 $ 170,000 Depreciation expense $ 34,000 $ 76,000 Fixed out-of-pocket operating costs $ 70,000 $ 50,000 The company's discount rate is 15% Click here to view Exhibit 148-1 and Exhibit 148-2, to determine the appropriate discount factor using tables Required: 1 Calculate the payback period for each product 2 Calculate the net present value for each product. 3. Calculate the internal rate of return for each product. 4 Calculate the profitability Index for…Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The company's discount rate is 17%. After careful study, Oakmont estimated the following costs and revenues for the new product: Cost of equipment needed Working capital needed) Overhaul of the equipment in two years. Salvage value of the equipment in four years Annual revenues and costs: Sales revenues $ 275,000 $ 86,000 $10,000 $ 13,000 $ 420,000 Variable expenses $ 205,000 Fixed out-of-pocket operating costs $ 87,000 When the project concludes in four years the working capital will be released for investment elsewhere within the company. Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using tables. Required: Calculate the net present value of this investment opportunity. (Round your final answer to the nearest whole dollar amount.)
- Please show all the steps and reasoningsZachary Home Maintenance Company earned operating income of $6,565,300 on operating assets of $58,100,000 during Year 2. The Tree Cutting Division earned $1,191,970 on operating assets of $6,890,000. Zachary has offered the Tree Cutting Division $2,160,000 of additional operating assets. The manager of the Tree Cutting Division believes he could use the additional assets to generate operating income amounting to $440,640. Zachary has a desired return on investment (ROI) of 9.30 percent. Required a. Calculate the return on investment for Zachary, the Tree Cutting Division, and the additional investment opportunity. b. Calculate the residual income for Zachary, the Tree Cutting Division, and the additional investment opportunity.Iona Company, a large printing company, is in its fourth year of a five-year, quality improvement program. The program began in 20x0 with an internal study that revealed the quality costs being incurred. In that year, a five-year plan was developed to lower quality costs to 10 percent of sales by the end of 20x5. Sales and quality costs for each year are as follows: Sales Revenues Quality Costs20x1 $10,000,000 $2,000,00020x2 10,000,000 1,800,00020x3 11,000,000 1,815,00020x4 12,000,000 1,680,00020x5* 12,000,000 1,320,000 Required:1. Prepare an interim quality cost performance report for 20x5 that compares actual quality costs with budgeted quality costs. Comment on the firm’s ability to achieve its quality goalsfor the year.2. Prepare a one-period quality performance report for 20x5 that compares the actual quality costs of 20x4 with the actual costs of 20x5. How much did profits…
- Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 18% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B Initial investment: Cost of equipment (zero salvage value) $ 170,000 $ 380,000 Annual revenues and costs: Sales revenues $ 250,000 $ 350,000 Variable expenses $ 120,000 $ 170,000 Depreciation expense $ 34,000 $ 76,000 Fixed out-of-pocket operating costs $ 70,000 $ 50,000 The company’s discount rate is 16%. Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor using tables. Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. 3. Calculate the internal rate…Lozier Catering and Events (LCE) offers a variety of services from small gatherings to large weddings and corporate retreats. Sales for year 1 totaled $877,500. Information regarding resources for the year includes the following: Resources Used Resources Supplied Depreciation $ 56,550 $ 58,175 Training 29,250 35,100 Transportation 52,000 55,575 Publicity 72,800 78,000 Permanent staff 146,250 201,500 Temporary staff 269,750 276,250 Invoicing and records 24,375 27,300 Administrative 45,500 51,350 Required: Management has requested that you do the following: Prepare a traditional income statement. Prepare an activity-based income statement.Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five- year period. His annual pay raises are determined by his division's return on investment (ROI), which has exceeded 19% each of the last three years. He computed the following cost and revenue estimates for each product: Product A Product B Initial investment: Cost of equipment (zero salvage value) $ 190,000 $ 400,000 Annual revenues and costs: Sales revenues $ 270,000 $ 370,000 Variable expenses $ 128,000 $ 178,000 Depreciation expense $ 38,000 $ 80,000 Fixed out-of-pocket operating costs $ 72,000 $ 52,000 The company's discount rate is 17%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Calculate each product's payback period. 2. Calculate each product's net present value. 3. Calculate each product's internal rate of return. 4. Calculate each product's profitability index. 5.…
- At the beginning of the year, Cinnabar Company initiated an environmental cost reduction program. To help assess the impact of the environmental cost reduction improvement program, the following data were collected for the year: Operating costs $2,500,000 Designing products 2,500 Auditing environmental activities 6,000 Recycling products 22,000 Disposing of toxic waste 37,000 Testing for contamination 15,000 Cleaning up oil spills 41,500 Which of the following expresses the environmental costs incurred on prevention activity as a percentage of operating costs (rounded to two decimal places)? a. 0.98% b. 0.15% c. 2.46% d. 4.96%Current plan There are two fire brigades that each comprise five firefighters: three trainees and two experienced firefighters. The operating costs of each brigade, excluding staff salaries, average $130,000 per year. The equipment at each station initially cost $220,000 and has a current salvage value of $50,000. All equipment is depreciated on a straight-line basis based on an expected useful life of 10 years. Proposed plan Establish four fire brigades that each comprise three firefighters: two trainees and one experienced firefighter. The operating costs of each brigade, excluding staff salaries, is estimated to average $100,000 per year. Two more stations will need to be built, which would each cost $125,000. All existing equipment will be sold and replaced by upgraded equipment that would cost $250,000 per brigade. The average salary of trainee firefighters is $43,000 per year, while experienced firefighters earn $58,000 per year. A rate of return of 10% is required for…Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 17% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B Initial investment: Cost of equipment (zero salvage value) $ 176,600 $ 390,000 Annual revenues and costs: Sales revenues $ 260,000 $ 360,000 Variable expenses $ 124,000 $ 174,000 Depreciation expense $ 36,000 $ 78,000 Fixed out-of-pocket operating costs $ 71,000 $ 50,000 The company’s discount rate is 15%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor using tables. Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. 3. Calculate the internal rate of return for each…