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The Mead Meals on Wheels Center (MMWC) provides meals every day to the homebound elderly. The city of Wabash pays MMWC $ 32 per week for each person it serves. There is no shortage of demand for MMWC’s services among the elderly citizens of Wabash, and MMWC can find qualified recipients for as many meals as it can deliver. Each person helped by MMWC receives two hot meals per day, seven days per week, for a total of 14 meals every week. To service the contract, MMWC has a central kitchen that has the capacity to pro-duce a maximum of 9,600 meals per day. It costs MMWC an average of $ 36,000 per week to operate the kitchen and other central facilities regardless of the number of meals that MMWC serves. This covers all of MMWC’s fixed costs (e. g., rent, equipment costs, and its personnel including administrative staff) as well as its fixed seasonal service contract costs (utilities, snow removal, etc.). The first problem that MMWC faces is figuring out how much it can afford to spend per person, per week for food to supply the program. Food is MMWC’s only variable expense. You are MMWC’s only program analyst. Question 4: What do you tell her? Support your recommendation and present your findings in a way that the executive director will understand. a. Assuming that you pay your suppliers quarterly and that you are paid by Wabash quarterly, what would you recommend doing? b. Would your answer be different if you were paid by Wabash and pay your suppliers weekly? Annually? You finish your capital budget analysis just in time to prepare the operating budget for the coming year. The executive director wants you to use last year’s budget as a starting point but to update it to reflect the higher fixed costs that occurred during this year’s winter operations (i. e., the first quarter). In addition, she has decided to accept your recommendation about the equipment. If you decide to go ahead with the purchase, a local bank will lend MMWC the full purchase price of the equipment and only charge MMWC for interest during the first year of the loan. Interest on the loan would be set at 8 percent per year. MMWC’s normal policy is to assume a 10 per-cent residual value on all kitchen equipment and to depreciate it over five years on a straight- line basis.
What is the value of the investment at the current interest rate of 11.75 percent?
Calculate the taxable income (i.e., income before taxes) for the income statement for year 1 if the firm purchases the machine."
Robert would like his wife to receive a pure endowment of $100,000 when she retires at 55, 15 years from now. How much must he deposit annually if the money is worth 5%?
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Since the bonds have been called, investors will receive a call premium and can declare a capital gain on their tax returns.
It is a fact that the federal government (1) encouraged the development of the savings and loan industry, (2) virtually forced the industry to make long-term fixed-interest-rate mortgages, and (3) forced the savings and loans to obtain most of their ..
Since the loan calls for a compensating balance, the effective interest rate is actually 11.170 percent. What is the compensating balance on this loan?
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Miyagi Data, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 1/30, net 40. Based on experience, 65 percent of all customers will take the discount. What is the average collection period? If the company sells 1,350 forecas..
What is Unida's unlevered cost of capital? What is Unida's after-tax debt cost of capital?
Karsted Air Services is now in the final year of a project. The equipment originally cost $23 million, of which 80% has been depreciated. Karsted can sell the used equipment today for $5.75 million, and its tax rate is 35%. What is the equipment's af..
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