Consider the role of simulation analysis and decision trees in capital budgeting risk analysis
Project risk· Consider the role of simulation analysis and decision trees in capital budgeting risk analysis. Describe the advantages offered by each technique. Describe a scenario that the technique would be appropriate to apply to and explain what you would expect to learn from application of that tool. The building consists of 10 units that could rent for $550 per Save your time - order a paper!Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines Order Paper Now· Given the following owners income and expense estimates for an apartment property, formulate a reconstructed operating statement. The building consists of 10 units that could rent for $550 per month each. Rental income (last year) – $60,000 Power – $2,200 Heat – $1,700 Janitor – $4,600 Water – $3,700 Maintenance – $4,800 Cap. Expenditures – $2,800 Management – $3,000 Depreciation (tax) – $5,000 Mortgage Payments – $6,300 Estimating vacancy and collection losses at 5% of potential gross income, reconstruct the operating statement to obtain an estimate of NOI. Assume an above line treatment of CAPX. Remember, there may be items in the owner’s statement that should not be included in the reconstructed operating statement. Using the NOI and R0 of 11%, calculate the property’s indicated market value. Round your final answer to the nearest $1,000.
Income from Continuing Operations (ICO) for 2016 was determined to be $1,000,000, but upon further review, Sparky’s bookkeeper is not certain this number is accurate.· 1. Sparky Company is preparing its 2016 financial statements. Income from Continuing Operations (ICO) for 2016 was determined to be $1,000,000, but upon further review, Sparky’s bookkeeper is not certain this number is accurate. During 2016, Sparky declared preferred dividends of $70,000, paid $90,000 for dividends, and received $135,000 for dividends on available-for-sale equity securities. The bookkeeper did not include any of these when calculating ICO.
If you need to increase ICO, enter your answer as a positive number; for instance: 3000 If you need to decrease ICO, enter your answer as a negative number; for instance: -3000
If you determine no change is needed to ICO; enter 0
1.5 points QUESTION 21. Over the past 4 years, SPARKY has estimated bad debts based on 3.5% of credit sales. On May 1, 2016, after reviewing their major client’s credit worthiness, they decided to change this estimate to 4.75%. If Sparky had used the 4.75% in the past, bad debt expenses would be $150,000 higher in prior years. During fiscal 2016, Sparky had earned sales revenues of $2,750,000 of which 20% were cash sales and 80% were credit sales. The bookkeeper calculated bad debt expenses for 2016 using the 3.5%.
Determine the ADJUSTMENT to Sparky’s Income from Continuing Operations (ICO) for this item. Sparky has a corporate tax rate of 30%. If you need to increase ICO, enter your answer as a positive number; for instance: 3000 If you need to decrease ICO, enter your answer as a negative number; for instance: -3000 If you determine no change is needed to ICO; enter 0
1.5 points QUESTION 31. On April 1, 2014, Sparky purchased a truck for $50,000 with a salvage value of $7,000 and useful life of 5 years which was depreciated using the straight line method. On October 1, 2016, Sparky decided to change the salvage to $3,630 and a total useful life of 9 years. The bookkeeper has not recorded any depreciation on the truck for 2016.
Determine the ADJUSTMENT to Sparky’s Income from Continuing Operations (ICO) for this item. Sparky has a corporate tax rate of 30%. If you need to increase ICO, enter your answer as a positive number; for instance: 3000 If you need to decrease ICO, enter your answer as a negative number; for instance: -3000 If you determine no change is needed to ICO; enter NE.
1.5 points QUESTION 41. On July 1, 2012, Sparky purchased a machine for $200,000 with a salvage value of $8,000 and useful life of 20 years which was depreciated using the straight line method. On July 1, 2016, Sparky decided to change the salvage to $14,255 and a total useful life of 28 years. The bookkeeper used the old estimates in calculating ICO.
Determine the ADJUSTMENT to Sparky’s Income from Continuing Operations (ICO) for this item. Sparky has a corporate tax rate of 30%.
If you need to increase ICO, enter your answer as a positive number; for instance: 3000 If you need to decrease ICO, enter your answer as a negative number; for instance: -3000
If you determine no change is needed to ICO; enter NE.
1.5 points QUESTION 51. On July 1, 2012, Sparky purchased a plot of land for $158,500, but the bookkeeper incorrectly classified it and depreciated it as a building. The bookkeeper determined it had a $10,000 salvage value and a 15 year useful life and has used straight line depreciation since the day of purchase. The bookkeeper discovered this mistake in 2016 and has did not record any depreciation for this asset in 2016.
Determine the prior period adjustment to Retained Earnings that Sparky will record in a journal entry for 2016. Sparky has a corporate tax rate of 30%. If you need to increase RE, enter your answer as a positive number; for instance: 3000 If you need to decrease RE, enter your answer as a negative number; for instance: -3000 If you determine no change is needed to RE; enter 0
1.5 points QUESTION 61. On May 1, 2013, Sparky received $337,800 for the sale of merchandise to a customer. The contract specified that Sparky would deliver their product in equal monthly quantities over 60 months. When Sparky recorded the sale the bookkeeper credited a nominal account. No adjusting or correcting entries were made and the bookkeeper realized the error after 2016 ICO was calculated.
Determine the ADJUSTMENT to Sparky’s Income from Continuing Operations (ICO) for this item. Sparky has a corporate tax rate of 30%. If you need to increase ICO, enter your answer as a positive number; for instance: 3000 If you need to decrease ICO, enter your answer as a negative number; for instance: -3000 If you determine no change is needed to ICO; enter 0
1.5 points QUESTION 71. Using the information in Question 6, determine the prior period adjustment to Retained Earnings that Sparky will record in 2016. Sparky has a corporate tax rate of 30%. If you need to increase RE, enter your answer as a positive number; for instance: 3000 If you need to decrease RE, enter your answer as a negative number; for instance: -3000 If you determine no change is needed to RE; enter 0
1.5 points QUESTION 81. Sparky began doing business on January 1, 2012 using the Percentage of Completion to record construction revenues. During 2016, Sparky changed to the Completed Contract Method to record construction revenues to be consistent with industry practice. The bookkeeper used the Completed Contract Method for recording construction revenues in 2016. The company compiled the following comparative data:
Determine the ADJUSTMENT to Sparky’s Income from Continuing Operations (ICO) for this item. Sparky has a corporate tax rate of 30%. If you need to increase ICO, enter your answer as a positive number; for instance: 3000 If you need to decrease ICO, enter your answer as a negative number; for instance: -3000 If you determine no change is needed to ICO; enter 0
1.5 points QUESTION 91. Using the information in Question 8, determine the cumulative effect adjustment to Retained Earnings that Sparky will recognize in the journal entry to record this accounting change. Sparky has a corporate tax rate of 30%. If you need to increase RE, enter your answer as a positive number; for instance: 3000 If you need to decrease RE, enter your answer as a negative number; for instance: -3000 If you determine no change is needed to RE; enter 0
1.5 points QUESTION 101. Sparky reports 3 years of comparative financial statements (2016, 2015, and 2014). Using the information in Question 8, determine the cumulative effect adjustment to Retained Earnings that Sparky will recognize in the comparative financial statements to record this accounting change. Sparky has a corporate tax rate of 30%. If you need to increase RE, enter your answer as a positive number; for instance: 3000 If you need to decrease RE, enter your answer as a negative number; for instance: -3000 If you determine no change is needed to RE; enter 0 |
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