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I need help ASAP please Thank you The following scenario, War Eagle Brewery Scenario 2, applies to the next 4 questions: The War Eagle Brewery
I need help ASAP please
Thank you
The following scenario, War Eagle Brewery Scenario 2, applies to the next 4 questions: The War Eagle Brewery has had to turn away customers at times due to stockouts, so they plan to double Inventory levels from $50,000 to $100,000 for the coming year 2019 in an attempt to reduce lost sales and lost customers. They expect this change to increase Sales by 10% from $1,000,000 to $1,100,000 and increase COGS by 10% from $600,000 to $660,000. They also expect Net A/R to increase by 10% from $75,000 to $82,500. Cash-on-Hand remains the same at $50,000, Fixed Assets remains the same at $325,000, and Pre-Paid Expenses are still zero. The only change in Total Overhead (Operating Expenses), which were $150,000 in 2018, is that they will increase as a result of higher inventory carrying costs on the extra $50,000 in Inventory being carried in 2019. The average inventory level for 2019 is projected to be $100,000. Assume there is no interest or taxes, so EBIT and Net Income will be the same. Also, assume that the inventory carrying cost is 25%. Financial ratio formulas are as follows: Gross Profit = Sales - COGS Total OH = Fixed OH + Variable OH Total Current Assets = Inventory + Net A/R + Cash on Hand + Pre-paid Expenses Total Assets = Total Current Assets + Fixed Assets Net Income = Gross Profit - Total OH Cost Profit Margin % = 100* Net Income / Sales Asset Turnover % = 100 * Sales / Total Assets ROA % = 100* Net Income / Total Assets Inventory Turns = COGS / Average Inventory Question 42 5 pts What will the Total Overhead (Operating Expenses) be in 2019 under War Eagle Brewery Scenario 2? $12,500 $100,000 $125,000 $150,000 O $162,500 Question 43 5 pts What is the projected Net Income for 2019 in War Eagle Brewery Scenario 2? $250,000 $277,500 $400,000 $427,500 $440,000 Question 44 5 pts What is the projected ROA for 2019 in War Eagle Brewery Scenario 2? 48.8% 49.8% 50.8% O 51.8% 0 52.8% Question 45 5 pts What level of Inventory Turns is expected in 2019 in War Eagle Brewery Scenario 2? O 6.6 O 7.6 O 8.6 O 9.6 O 10.6Step by Step Solution
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