# Accounting homework help

## The Paradise Shoes Company

The Paradise Shoes Company has estimated its weekly TVC function from data collected over the past several months, as TVC = 3450 + 20Q + 0.008Q2 where TVC represents the total variable cost and Q represents pairs of shoes produced per week. And its demand equation is Q = 4100 – 25P. The company is currently producing 1,000 pairs of shoes weekly and is considering expanding its output to 1,200 pairs of shoes weekly. To do this, it will have to lease another shoe-making machine ($2,000 per week fixed payment until the lease period ends).

## 1.) A rm is evaluating an investment that costs $ 90,000 and is expected to generate annual cash ows equal to $ 20,000 for the next six years.

1.) A rm is evaluating an investment that costs $ 90,000 and is expected to generate annual cash ows equal to $ 20,000 for the next six years. If the rm’s required rate of return is 10 percent, what is the net present value ( NPV) of the project? What is its internal rate of return ( IRR)? Should the project be purchased?

## Question

1. The DEAR for a bank is $6,500. What is the VAR for an 8-day period? A 16-day period? Why is the VAR for a 16-day period not twice as much as that for a 8-day period?

2. Bank Y has an inventory of 14-year zero-coupon bonds with a face value of $400 million. The bonds currently are yielding 8.5 percent in the over-the-counter market.

a. What is the modified duration of these bonds?

b. What is the price volatility if the potential adverse move in yields is 25 basis points?

c. What is the DEAR?

## June Klein, manages a $100 million (market value) U.S. governments Bond portfolio for an institution

Security | Modified | Basis Point | Conversion Factor | Portfolio Value/Future |

## Martinez Manufacturing Co.

Following data was taken from the general ledger and other records of Martinez Manufacturing Co. at July 31, the end of the first month of operations in the current fiscal year:

## Pr 13-1B Boise Bike Corp manufactures , PR 13-2B Picasso Optics , PR 13-3B Daley Welding Corporation

Pr 13-1B Boise Bike Corp manufactures mountain bikes and distributes them through retail outlets in Montana, Idaho, Oregon, and Washington. Boise Bike Corp. has declared the following annual dividends over a six year period ending December 31 of each year: 2007, $8,000; 2008, $24,000; 2009, $60,000; 2010, $75,000; 2011, $80,000; and 2012, $98,000. During the entire period, the outstanding stock of the company was composed of 20,000 shares of 2% cumulative preferred stock, $75 par, and 50,000 shares of common stock, $5 par. Instructions 1.

## Loin Cabinetry

Loin Cabinetry produces two models of home shelving, the Basic-Super and the Mega-Super. Data on operations and costs for November are:

Basic-Super Mega-Super Total

Machine hours 8,000 4,000 12,000

Direct labor hours 6,000 4,000 10,000

Units produced 1,000 250 1,250

Direct material costs $20,000 $ 7,500 $27,500

Direct labor costs 129,000 71,000 200,000

Manufacturing overhead costs 348,200

Total costs $575,700

## E 8-5: Hachey Company & E 9-9 Optix International

E 8-5:

Hachey Company has accounts receivable of $95,100 at March 31, 2007. An analysis

of the accounts shows these amounts.

Prepare entries for recognizing

accounts receivable.

(SO 2)

Balance, March 31

Month of Sale 2007 2006

March $65,000 $75,000

February 12,600 8,000

December and January 10,100 2,400

November and October 7,400 1,100

$95,100 $86,500

## E7-2 Culotti’s Pizza & P7-2B The board of trustees of a local church

E7-2 Culotti’s Pizza operates strictly on a carry out basis. Customers pick up their orders at a counter where a clerk exchanges the pizza for cash. While at the counter, the customer can see other employees making the pizzas and the large ovens in which the pizzas are baked.

Instructions

Identify the six principles of internal control and give an example of each principle that you might observe when picking up your pizza. (Note: It may not be possible to observe all the principles.)

## 1. The risk-free rate of return, rRF , is 11%; the required rate of return on the market, rM, 16%; and Schuler Company's stock has a beta coefficient of 1.6.

1. The risk-free rate of return, rRF , is 11%; the required rate of return on the market, rM, 16%; and Schuler Company's stock has a beta coefficient of 1.6.

a. If the dividend expected during the coming year, D1, is $3.00, and if g is a constant 2.75%, then at what price should Schuler's stock sell? Round your answer to the nearest cent.