Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. QwikShare is a new not-for-profit organization that will rent low-emissions automobiles at QwikStops in suburban areas in order to provide an environmentally friendly transportation

image text in transcribed
image text in transcribed
image text in transcribed
1. QwikShare is a new not-for-profit organization that will rent low-emissions automobiles at QwikStops in suburban areas in order to provide an environmentally friendly transportation option to its customers. The organization plans to rent automobiles by the day only, and it will operate 7 days a week, 365 days per year On the first day of FY 2016, QwikShare will take out a pre-approved loan of $240,000 The loan will have an annual interest rate of 4%, with annual principal repayments of $30,000 per year to begin in FY 2017. Principal repayments and interest payments will b due the last day of each fiscal year. The organization will immediately use the loan to purchase its first fleet of 15 automobiles. Each automobile will be purchased for $16,000, will have a useful life of 7 years, and can be sold for $2,000 at the end of its useful life QwikShare will have a full-time staff that includes a Chief Executive Office, a Chief Financial Officer, an Operations Manager, two customer service agents, and two automotive technicians. Full-time staff salaries will total $550,000 in FY 2016, and health benefits will equate to 30% of full-time staff salaries. The organization will also employ 10 part-time staff members who will earn an average of $12.50 per hour in wages and will work an average of 20 hours per week. QwikSbare will lease its office and QwikStop spaces for $9,000 per month, it will use $1,000 per month in water and electrical utilities, and it will use $2,500 in supplies per month. In addition, the organization will incur $800 per month per automobile in maintenance and insurance expenses. QwikSbare will also cover the cost of fuel at a discounted rate; the organization anticipates that it will cost $30 per car per day that a car is rented. All expenses will be paid as resources are consumed, except supplies, for which the organization will pay with a two-month lag In the first month of FY 2016, QwikSbarce expects supporters will pledge a total of $1,000,000 in donations to help support its first year of operations. QwikShare will charge S65 per day for an automobile rental, and rental fees are collected via pre-stored credit cards the moment customers enter the vehicles they have reserved. In addition, the organization will be supported by a new federal grant that will pay QwikSbare S0.50 for every pound of carbon dioxide (CO2) emissions its rentals prevent during FY 2016. QwikShare estimates that each of its low-emissions automobiles will prevent 50 pounds of CO2 emissions per day they are in use during FY 2016. Revenues from the federal grant will be received with a one-month lag

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Auditing In Savings And Credit Cooperative Societies

Authors: Daniel Njuguna

1st Edition

B0C8SCJKRT, 979-8223128649

More Books

Students also viewed these Accounting questions