- (Topic 1)
FumiSelf is a global manufacturer of consumer-assembled furniture with a business presence in nearly every country. The Vice President of Production was presented with the following information by the Vice President of Finance as of the end of the current quarter.
Correct Answer:D
- (Topic 1)
Which one of the following statements regarding working capital management is not correct?
Correct Answer:D
CORRECT TEXT - (Topic 2)
Should OLI accept the proposal from the regional airline? Show your calculations Essay
Online Learning Inc. lOLI) is a privately-held company based in the IUC that specializes in providing online courses in English as a Second Language (ESL). OLI is trying to set up a new sales office in a foreign country. It needs a business license to operate in that country. The license normally lakes six months to obtain. An official of that country said that he could expedite the process for a fee of €300.
OLI estimates the new sales office can bring €300,000 incremental profit annually OLI has just launched a new online 40-houi course to help adult ESL learners master basic business English. The price of the new course is €500 per student, the variable cost is
€300 per student, and the total fixed cost of the new course is €300.000 per year OLI spent
€200.000 to develop the new course before launching it. There are many online course providers in the marketplace, and each has its own feature However, OLI's highly qualified staff and good reputation have enabled it to charge a premium price compared to its major competitors. Recent market research indicates that if OLI raises the price of its new business English course by 10V the student enrollment would decrease by 5V A regional airlines company in Asia has approached OLI and offered to enroll 1.000 of its employees in the new course if OLI would agree to a special price of €350 per employee If OLI accepts this offer, an additional €10,000 onetime cost would be required to temporally expand its capacity to accommodate the new students.
Solution:
Yes the order can be accepted as the price offered is above the variable cost of 300, hence it will make a contribution of 50 per enrollment and should be accepted
Does this meet the goal?
Correct Answer:A
- (Topic 1)
Custom Ceramics produces two hand-painted items a large bowl and a large platter. Relevant information for each of these items is shown below
Correct Answer:D
- (Topic 1)
Sigma industries is considering purchasing Lambda Products in a cash transaction Sigma financial analysts Dave conducted an extensive amount of negotiation and due diligence and nave summarized the following financial information for management.
• Assets having a 10-year remaining life can be acquired for $22 million
• Assets are to De depreciated over their remaining life on a straight-line basis for Doth book and tax purposes
• Current liabilities of Lambda amounting to S3 million must be assumed by Sigma
• Lambda operations are expected to produce annual pre-tax cash Don of S7 million for the remaining 10 years of operation
• A16% return on investment is required by Sigma for acquisitions of this type
• Sigma's marginal Income tax rate is 35%
What is the net present value to Sigma of the Lambda acquisition rounded to the nearest thousand?
Correct Answer:B
- (Topic 1)
Given the financial information shown below, what amounts would be shown for sales revenue and for gross prom, respectively in a common size income statement?
Correct Answer:B