Hello Guys,

I need your help on that new two modules. I attached them file with this email. The module # 3 is related to the module two, which I submitted in my first questions. So I attached the module # 2, in case if you guys want it for data.

BUS303 - Business Finance - Comprehensive Problem - Module 2 This problem builds upon each of the different modules to a logical analysis and conclusion, emphasizing the most important aspects of business finance through the completion of each of the four modules. Following is a brief description of each of the modules and the course objectives that are covered with the module. Module One - this module will emphasize the student's grasp of the formation of financial statements and the development of analytical measures to assess the financial condition of the business firm. (CO 1.2, 2.1) Module Two - this module will focus upon the development of pro forma financial statements given various planning assumptions. (CO 1.4) Module Three - this module will require the student to apply working capital analysis techniques and assess the cost of debt to a business firm. (CO 2.2, 3.2, 3.3, 3.4) Module Four - this final module will encompass the application of time-value of money concepts to the business firm's decisions related to the firm's overall cost of capital. (CO 4.1, 4.4) General Guidelines: The proper, and professional, presentation of solutions associated with this comprehensive problem are part of the overall grading of each module. Because all analytic work is to be completed in Excel, but the solution submission is to be in Word, you must become familiar with importing schedules from Excel into Word in a professional manner. Please see the instructions contained in the Getting Started folder in Blackboard. Each module is due as indicated in the Learning Activities folder for the particular week and is to be uploaded into the Assignment as shown in the Grade Center. Sales: 235 per 1000 (widgets). Module Two - 56 points Smith-John makes standard sized widgets for the frazzle industry. These widgets are sold for $235 per thousand. Mr. Smith and Mr. John are asking you to assist with preparations for a meeting with their banker to arrange for financing the company for possible expansion. Based on a sales forecast (below) and other data, Mr. Smith and Mr. John would like you to prepare a monthly cash budget, monthly and quarterly pro forma income statements, a pro forma quarterly balance sheet, and all necessary supporting schedules for the first quarter of 2012. Sales forecast (in units): Sales - units Sales - $'s January 2,150,000 $ 505,250 February 2,350,000 $ 552,250 March 1,950,000 $ 458,250 April 1,750,000 $ 411,250 May 2,150,000 $ 505,250 Prior history shows that the company collects 75% of the sales in the first month after the sale, 20% in the second month after the sale, and the remainder in the third month after the sale. The company pays for materials purchased for production the month after receipt. In general, Mr. Smith and Mr. John like to keep 1.5 months supply of inventory on-hand at month-end in anticipation of sales. Inventory at the beginning of December was 2,400,000 units. (This was not equal to the desired inventory level of the desired 1.5 months supply.) Additionally, the unit sales for October, November and December were 1,900,000, 1,850,000 and 1,325,000, respectively. The major cost of production is the purchase of raw materials in the form of steel rods, which are cut, threaded, and finished. Last year raw material costs were $63 per 1,000 widgets, but Mr. John was notified by the purchasing department that the cost was going to rise to $68 per 1,000 widgets. The company uses FIFO inventory accounting and the purchases for materials are paid for in the month following the purchase. Labor costs are relatively constant at $22 per thousand widgets, since workers are paid on a piecework basis. Overhead is allocated at $12 per thousand widgets and selling and administrative costs are constant at 28% of sales revenue. Labor expense and overhead are direct cash outflows paid in the month incurred, while interest and taxes are paid quarterly. In addition, the company maintains a dividend payout ratio of 40% which is paid quarterly. The company usually maintains a minimum cash balance of $45,000, borrows notes payable if needed, and puts any excess cash into marketable securities. The average tax rate is 30%. Marketable securities are sold before funds are borrowed when a cash shortage is faced. Ignore the interest on short-term borrowings. Interest on the long- term bonds of $9,000 is paid in March, but is allocated over each month for accounting purposes. Taxes are paid in March, but are allocated over each month for accounting purposes. The Dividend payment is made at the end of March. In addition, the company is projecting the purchase of a new piece of manufacturing equipment in March for $50,000 that will be cash on delivery. Required - part 1: Prepare a monthly pro forma income statement and cash budget, and a quarter-ended income statement; make sure to include a sales forecast, production schedule, schedule of cost of goods sold, schedule of cash receipts, schedule of cash payments, net cash flow schedule, and the cash budget. All supporting schedules should include all three months of the quarter. s-vc= cm Required - part 2: Based on the date prepared in part 1, prepare a balance sheet as of the quarter-ended date. Make sure to include a schedule that identifies the calculation of accounts receivable, inventory, and accounts payable balances for each month and for the quarter-ended period. As of the year ended December 31, 2011, the Smith-John balance sheet was as follows: Smith-John, Inc., Balance Sheet as of December 31, 2011 ASSETS Current Assets: Cash Marketable Securities Accounts Receivable Inventory Total current assets Fixed assets, net Total Assets $ $ 15,000 218,000 322,525 555,525 800,000 1,355,525 LIABILITIES & EQUITY Current Liabilities: Accounts payable $ Tax & interest payable Notes payable Total current liabilities Long-term debt Total liabilities 125,002 125,002 400,000 525,002 Equity: Common stock Retained earnings Total equity 400,000 430,523 830,523 Total Liab's & Equity $ 1,355,525 BUS303 - Business Finance - Comprehensive Problem This problem builds upon each of the different modules to a logical analysis and conclusion, emphasizing the most important aspects of business finance through the completion of each of the four modules. Following is a brief description of each of the modules and the course objectives that are covered with the module. Module One - this module will emphasize the student's grasp of the formation of financial statements and the development of analytical measures to assess the financial condition of the business firm. (CO 1.2, 2.1) Module Two - this module will focus upon the development of pro forma financial statements given various planning assumptions. (CO 1.4) Module Three - this module will require the student to apply working capital analysis techniques and assess the cost of debt to a business firm. (CO 2.2, 3.2, 3.3, 3.4) Module Four - this final module will encompass the application of time-value of money concepts to the business firm's decisions related to the firm's overall cost of capital. (CO 4.1, 4.4) General Guidelines: The proper, and professional, presentation of solutions associated with this comprehensive problem are part of the overall grading of each module. Because all analytic work is to be completed in Excel, but the solution submission is to be in Word, you must become familiar with importing schedules from Excel into Word in a professional manner. Please see the instructions contained in the Getting Started folder in Blackboard. Each module is due as indicated in the Learning Activities folder for the particular week and is to be uploaded into the Assignment as shown in the Grade Center. Module Four Part A Smith-John Widgets, Inc. has received an offer from two major manufacturing companies for the latest product offering. Based on the length of the contracts he has asked you to evaluate the offers using discounted cash flow methods by applying the time value of money concepts. The two offers are outlined as follows: Offer A: This potential customer will pay the net profit, discounted at 8%, for the purchase of the product given the sales level as follows for the next five years: Sales Year 1 $ 750,000 Year 2 $ 937,500 Year 3 $ 1,125,000 Year 4 $ 1,350,000 Year 5 $ 1,485,000 The cost of sales are assumed to be consistent at 75% of revenues and there will be additional operating expenses to support this customer of $185,000 the first year, rising by 20% each year thereafter. The present value will be discounted at 8%. Offer B: This potential customer will pay Smith-John based on the assumed gross profit of the customer, less a special marketing fund charge of $32,000 per year. The assumed gross profit under the proposed contract would begin at $775,000 for the first year, increasing by 30% each year thereafter. This contract would pay the funds today and would not be discounted. Because of current production capacity, Smith-John can only accept one of the offers. Required: Make as comparison of each of the offers and then indicate which one has the higher value and, thus, should be accepted. Part B Because of the increased demand for its product, Smith-John Widgets, Inc. is in the process of expanding the production capacity. Current plans call for a possible expenditure of $500 thousand on the project. The funds for this project can be obtained by either increasing the borrowing level, issuing new Preferred Stock, or issuing new Common Stock. The current tax rate is 35%. The current capital structure, showing the current yield on the debt and the current market price for the preferred and common stock, is as follows: Debt Yield / Dividend Amount 9.0% $ 400,000 Price Preferred Stock $ 2.30 $ 100,000 $ 72.00 Common Equity $ 0.85 $ 500,000 $ 45.00 The Chief Financial Officer has decided to issue new debt, issue additional Preferred Stock, and sell additional Common Stock shares. The flotation cost for the Preferred Stock will be $2.50 and for Common Stock it will be $3.00. The new capital structure will be as follows should this plan be implemented: Debt Yield / Dividend Amount 7.5% $ 600,000 Price Float Cost Preferred Stock $ 2.30 $ 200,000 $ 72.00 $ 2.50 Common Equity $ 0.85 $ 700,000 $ 45.00 $ 3.00 Required: Step 1 - Calculate the cost of capital for debt, preferred stock, common equity in the form of retained earnings, and the weighted average cost of capital, prior to the new plan being implemented. Note that the growth rate for the common stock dividend is 9% and the dividend presented above is the current dividend. Step 2 - After the issuance of debt, preferred and common stock, calculate the cost of capital for debt, new preferred stock, new common stock, and the weighted average cost of capital, given the execution of the new financing plan to add $500 thousand in new capital. BUS303 - Business Finance - Comprehensive Problem - Module Three This problem builds upon each of the different modules to a logical analysis and conclusion, emphasizing the most important aspects of business finance through the completion of each of the four modules. Following is a brief description of each of the modules and the course objectives that are covered with the module. Module One - this module will emphasize the student's grasp of the formation of financial statements and the development of analytical measures to assess the financial condition of the business firm. (CO 1.2, 2.1) Module Two - this module will focus upon the development of pro forma financial statements given various planning assumptions. (CO 1.4) Module Three - this module will require the student to apply working capital analysis techniques and assess the cost of debt to a business firm. (CO 2.2, 3.2, 3.3, 3.4) Module Four - this final module will encompass the application of time-value of money concepts to the business firm's decisions related to the firm's overall cost of capital. (CO 4.1, 4.4) General Guidelines: The proper, and professional, presentation of solutions associated with this comprehensive problem are part of the overall grading of each module. Because all analytic work is to be completed in Excel, but the solution submission is to be in Word, you must become familiar with importing schedules from Excel into Word in a professional manner. Please see the instructions contained in the Getting Started folder in Blackboard. Each module is due as indicated in the Learning Activities folder for the particular week and is to be uploaded into the Assignment as shown in the Grade Center. The final upload to Blackboard will include the Excel file and the Word document. Make sure to include your name in cell A1 in the Excel file, along with the section of your class, and the Word document should be professionally prepared and use the guidelines in the School of Business Writing Manual. Module Three - 40 points Part A: Based on the pro forma projections for the first quarter, as provided in Module Two, Mr. Smith would like to know the breakeven point for the firm in terms of units to sell and the sales dollars for each month, on average, and for the quarter. He is considering making some changes to the pricing and fixed cost structure and would like to know how much flexibility he has. Required: Based on the fixed costs from the pro forma income statement and the selling price ($215 per thousand) and variable costs per unit ($133 per thousand), calculate the current breakeven point for the firm using the data from the 1 st quarter pro forma schedules. The fixed costs are classified as selling and administrative costs and the interest expense of $9,000 for a quarter. You have been provided with the proper solution for the income statement from module two which will be used in this module (in Blackboard). Part B: Smith-John Widgets, Inc. has been running smoothly and, based on the pro forma projections that had been developed, the bank has provided the needed short-term borrowings that have helped smooth the company's cash requirements. The company is now looking at better ways to manage the balances of material inventory and, in particular, with managing the material ordering process. Currently, the average material inventory for the company has been based on 60% of the next month's sales for supply, which resulted in a high level of material inventory and few orders per year. However, based on information received in a seminar for small businesses Mr. John would like to see the policy changed to be based on the EOQ model. The current cost structure of the company has yielded the following inventory and order cost data: Inventory Costs: Carrying cost $ Ordering cost $ 0.010 37.000 per unit per order $ 10.00 per thousand Using the information from the first three months of the year, January through March, the company has determined the following details regarding inventory costs and average balances: Based on data from 1st quarter, 2012 Total quantity of material units required per quarter 761,634 Safety stock, in units Average inventory, in units (including safety stock) Number of orders placed per quarter Inventory carrying cost Inventory ordering cost 10,000 86,163 5 861.63 185.00 $ $ Required: Prepare an analysis of the company's current inventory costs and develop a recommended ordering cycle based on the application of an EOQ model. Note: Instead of using the sales units in the calculation formula, please use the material units in the calculation of the EOQ - simply replace the sales units in the formula with the quantity of material units as shown above. Make sure to include in your report the updated information as follows: 1) cost breakdown of inventory costs, including carrying and ordering costs (you should calculate the inventory carrying cost, then the ordering cost, then present the total cost); 2) the average inventory level; 3) the number of orders to place each quarter; 4) and the number of units to order with each order placed, per your recommendation. Part C: Currently, Smith-John does not offer early payment discounts to its customers. Mr. Smith is considering offering a cash discount to customers as a means to improve collections. He is considering the following alternatives: Discount rate If paid within Net due date Case 1 2.3% 8 days 45 days Case 2 2.5% 5 days 40 days Case 3 1.0% 15 days 55 days Case 4 1.5% 10 days 60 days Required: Prepare a report giving Mr. Smith the cost, as a percentage, to the company of each of the proposed cash discount alternatives as presented, based on the cost of not taking a discount formula. Part D: In addition to the outstanding a long-term loan of $400,000 the company also has a short-term line of credit provided by the bank. Mr. Smith is negotiating with several new lending sources for additional loans and possibly an increase in borrowings. In meeting with several of these sources, Mr. Smith has received the following offers for financing: Case 1 Amount of loan Rate per year Compensating balance Annual interest amount Term in years Discounted? Installments? 500,000 7.5% 0.0% 37,500 1.0 Yes Case 2 Case 3 Case 4 800,000 8.0% 15.0% 64,000 1.0 700,000 9.1% 0.0% 63,700 1.0 600,000 ???? 0.0% 52,500 1.00 Qtrly Required: Calculate the effective interest rate for each of these financing offers. Based on your analysis, identify for Mr. Smith which would be the better alternative based solely on the effective interest rate of the financing offer. Make sure to display your calculations in case Mr. Smith has any specific questions. Note: The final solution for this module should be provided in a Word document with the proper identification of the module and part, along with a description of the information that is provided. For a part that requires a specific narrative discussion make sure to be thorough and accurate, referencing the appropriate data that you will include from your Excel spreadsheet file. Both the Excel file and the Word file are to be uploaded with the assignment in Blackboard