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Case Intro Q1 Q2 Q3 04 Q5 Q5 The presenterer Spotted on Set 4 Ame, Ata, New Sam 1984 www.why you will be , ulu un VE FC Chapet Test For Analyse jimple ir manga larvatud bude real madre mere beautiful, vibrant and internationally known Banff tourist town. Research indicates that the Canmore market is well suited to both cross-country skis and bikes that competition is fairly limited % 4 The investment in assets (cash, inventory, equipment) required for the new $216,000 5 Minimum required return on investments 1696 6 Actual 2019 return on investment of the original location 22% 7 8 Management has provided the following income statement to the bank manager the expected Static Budget 19 9 Amount 10 Sales in Units 4.008 11 Sales 501 000 100% 122 Less: Variable Costs: 13 Cost of Goods Sold 217.000 4396 Sales Commissions 75 150 1596 15 Total Variable costs 292. 150 5896 16 Contribution Margin 208,850 4296 Less: Fixed Costs: 18 Advertising 20,000 19 Property Taxes 9,000 20 Rent 54,000 21 Salaries & Wages 108,000 Total Fixed Costs 191,000 2.3. Net Operating Income 17-850 24 2,5 Part A: (4 marks) Calculate the following performance measurements for the proposed Canmore expansion: 108,000 Assignments 22 Total Fixed Costs 191.000 23 Net Operating Income 17850 24 Calls 25 Part A (4 marks) Calculate the following performance measurements for the proposed Canmore expansion 26 Margin (see Chapter 11 notes 27 28 Turnover (use investment in assets in equation 29 ... 30 Return on Investment 31 32 Residual income 33 34 Part 8: Analysis (4 marks) Explain in your own words using case data. Marks will not be awarded for textbook definitions) a. If management is evaluated based on ROI, will the project be accepted (expansion into 35 Canmore)? Why or why not? 36 37 b. If management is evaluated based on residual income, will the expansion into Canmore be 38 accepted? Why or why not? 58 Q Search File Home Insert Formulas Data Review View Help Open in 9v v Calibri 11 v B I vv Av HO A38 fib. If management is evaluated based on residual income, will the expansion into B DOTCH VIDEOS D TOTTATOTTWOCOWNESCOTT F Canmore market is well suited to both cross-country skis and bikes that competition is fairly limited. 3 The investment in assets (cash, inventory equipment required for the new $ 216,000 5 Minimum required return on investments 1696 6 Actual 2019 return on investment of the original location 22% & Management has provided the following income statement to the bank manager the expected Static Budget 56 9 Amount 10 Sales in Units 4,008 11 Sales 501,000 100% 12 Less: Variable Costs 13 Cost of Goods Sold 217,000 4396 14 Sales Commissions 75 150 15% 15 Total Variable Costs 292,150 58% 16 Contribution Margin 208,850 42% 37 Less: Fixed Costs 18 Advertising 20,000 19 Property Taxes 9,000 20 Rent 54,000 21 Salaries & Wages 108,000 22 Total Fixed Costs 191.000 23 Net Operating Income 17.850 24 25 Part A: (4 marks) Calculate the following performance measurements for the proposed Canmore expansion 26 Margin (see Chapter 11 notes) 27 28 Turnover use investment in assets in equation) 29 30 Return on investment 31 32 Residual income 33 34 Part B. Analysis (4 marks) Explain in your own words using case data. Marks will not be awarded for textbook definitions) a. If management is evaluated based on ROI, will the project be accepted (expansion into 35 Canmore 2 Why or why not? Part B: Analysis (4 marks) Explain in your own words using case data. Marks will not be awarded for textbook definitions). a. If management is evaluated based on ROI, will the project be accepted (expansion into 5 Canmore)? Why or why not? 36 37 b. If management is evaluated based on residual income, will the expansion into Canmore be 38 accepted? Why or why not? 39 40 41 42 43 44 45 46 47 The investment in assets (cash, inventory, equipment) required for the new location is Minimum required return on investments Actual 2019 return on investment of the original location Management has provided the following income statement to the bank manager the expected net i next year. Static Budget % Amount Sales in Units 4,008 Sales 501,000 100% Less: Variable Costs: Cost of Goods Sold 217,000 43% Sales Commissions 75,150 15% Total Variable Costs 292,150 58% Contribution Margin 208,850 42% Less: Fixed Costs: Advertising 20,000 Property Taxes 9,000 Rent 54,000 Salaries & Wages 108,000 Total Fixed Costs 191,000 Net Operating Income 17.850 Part A: (4 marks) Calculate the following performance measurements for the proposed Can Question 5 - Cash Budget (30 marks) Mountain Sports has aquired an open line of credit up to a maximum of $350,000. It will be necessary to convince the bank manager of this new Canmore branch ability to repay its line of credit including any interest Management has provided the following list of assumptions to help in the preparation of the cash budget (note: you will need to use the projected income statement provided in Question 4 to complete the cash budget): 1. Beginning cash balance invested by owners 52,000 Quarter 1 Quarter 2 Quarter 3 Quarter 4 2. Sales by quarter (as % of total projected sales) 22% 27% 26% 25% 3596 3. Type of collections from customers: Cash Sales Credit Sales (accounts receivable) 65% Cash sales are collected in the quarter of the sale, all credit sales are collected in the quarter after the sale. 4. Merchandise purchases Merchandise purchases (cost of goods sold) are all paid in the quarter following purchase. (Quarter I purchases are bought in Quarter I but paid for in quarter 2) 5. Operating expenses All other operating expenses (all expenses except cost of goods sold) are paid on a monthly basis. 6. Required investment in equipment paid in cash in the first quarter 135,000 7,000 7. Quarterly income tax payments paid in cash 8. Minimum cash balance 22,000 9. Borrowing and Repayments: Any borrowing will take place on the first day of the quarter and any repayments are paid at the end of the quarter. All borrowing and payments are made in increments of $1.000. Interest on borrowing can be ignored. 9. Borrowing and Repayments Any borrowing will take place on the first day of the quarter and any repayments are paid at the end of the quartet All becoming payments are made in increments of S1000. Interest on borrowing can be ignored Required. Prepare a cash budget for the first year of operation in Cantere by quarter and in total Show clearly on year budget the quarters) in which borrowing will be needed and the quarter(s) in which repayments can be made, as requested by the company's bank Mountain Sports Cash Budget For the year ended December 31 Quarter Year Percent of Sales Estimated Sales 52.000 CASH BALANCE. Beginning Collections from customers Cash Sales Credit Sales CASH AVAILABLE Less: Cash Payments Merchandise purchases (Cois) Sales Com Advertising Property Taxes Rent salaries & Wages Equipment Purchase Income tax Installment Total Disbursements Cash Excess Deficiency) Financing (Note 1) Borrow Repayment of Principal shows negative) Net Financing Cash Balance, Ending Note 1: Financing Calculations Cash excess Deficiency) Minimum cash balance Amount to borrow repay Borrowing (Repayments) Rounded to increment of 1,000 Case Intro Q1 Q2 Q3 04 Q5 Q5 The presenterer Spotted on Set 4 Ame, Ata, New Sam 1984 www.why you will be , ulu un VE FC Chapet Test For Analyse jimple ir manga larvatud bude real madre mere beautiful, vibrant and internationally known Banff tourist town. Research indicates that the Canmore market is well suited to both cross-country skis and bikes that competition is fairly limited % 4 The investment in assets (cash, inventory, equipment) required for the new $216,000 5 Minimum required return on investments 1696 6 Actual 2019 return on investment of the original location 22% 7 8 Management has provided the following income statement to the bank manager the expected Static Budget 19 9 Amount 10 Sales in Units 4.008 11 Sales 501 000 100% 122 Less: Variable Costs: 13 Cost of Goods Sold 217.000 4396 Sales Commissions 75 150 1596 15 Total Variable costs 292. 150 5896 16 Contribution Margin 208,850 4296 Less: Fixed Costs: 18 Advertising 20,000 19 Property Taxes 9,000 20 Rent 54,000 21 Salaries & Wages 108,000 Total Fixed Costs 191,000 2.3. Net Operating Income 17-850 24 2,5 Part A: (4 marks) Calculate the following performance measurements for the proposed Canmore expansion: 108,000 Assignments 22 Total Fixed Costs 191.000 23 Net Operating Income 17850 24 Calls 25 Part A (4 marks) Calculate the following performance measurements for the proposed Canmore expansion 26 Margin (see Chapter 11 notes 27 28 Turnover (use investment in assets in equation 29 ... 30 Return on Investment 31 32 Residual income 33 34 Part 8: Analysis (4 marks) Explain in your own words using case data. Marks will not be awarded for textbook definitions) a. If management is evaluated based on ROI, will the project be accepted (expansion into 35 Canmore)? Why or why not? 36 37 b. If management is evaluated based on residual income, will the expansion into Canmore be 38 accepted? Why or why not? 58 Q Search File Home Insert Formulas Data Review View Help Open in 9v v Calibri 11 v B I vv Av HO A38 fib. If management is evaluated based on residual income, will the expansion into B DOTCH VIDEOS D TOTTATOTTWOCOWNESCOTT F Canmore market is well suited to both cross-country skis and bikes that competition is fairly limited. 3 The investment in assets (cash, inventory equipment required for the new $ 216,000 5 Minimum required return on investments 1696 6 Actual 2019 return on investment of the original location 22% & Management has provided the following income statement to the bank manager the expected Static Budget 56 9 Amount 10 Sales in Units 4,008 11 Sales 501,000 100% 12 Less: Variable Costs 13 Cost of Goods Sold 217,000 4396 14 Sales Commissions 75 150 15% 15 Total Variable Costs 292,150 58% 16 Contribution Margin 208,850 42% 37 Less: Fixed Costs 18 Advertising 20,000 19 Property Taxes 9,000 20 Rent 54,000 21 Salaries & Wages 108,000 22 Total Fixed Costs 191.000 23 Net Operating Income 17.850 24 25 Part A: (4 marks) Calculate the following performance measurements for the proposed Canmore expansion 26 Margin (see Chapter 11 notes) 27 28 Turnover use investment in assets in equation) 29 30 Return on investment 31 32 Residual income 33 34 Part B. Analysis (4 marks) Explain in your own words using case data. Marks will not be awarded for textbook definitions) a. If management is evaluated based on ROI, will the project be accepted (expansion into 35 Canmore 2 Why or why not? Part B: Analysis (4 marks) Explain in your own words using case data. Marks will not be awarded for textbook definitions). a. If management is evaluated based on ROI, will the project be accepted (expansion into 5 Canmore)? Why or why not? 36 37 b. If management is evaluated based on residual income, will the expansion into Canmore be 38 accepted? Why or why not? 39 40 41 42 43 44 45 46 47 The investment in assets (cash, inventory, equipment) required for the new location is Minimum required return on investments Actual 2019 return on investment of the original location Management has provided the following income statement to the bank manager the expected net i next year. Static Budget % Amount Sales in Units 4,008 Sales 501,000 100% Less: Variable Costs: Cost of Goods Sold 217,000 43% Sales Commissions 75,150 15% Total Variable Costs 292,150 58% Contribution Margin 208,850 42% Less: Fixed Costs: Advertising 20,000 Property Taxes 9,000 Rent 54,000 Salaries & Wages 108,000 Total Fixed Costs 191,000 Net Operating Income 17.850 Part A: (4 marks) Calculate the following performance measurements for the proposed Can Question 5 - Cash Budget (30 marks) Mountain Sports has aquired an open line of credit up to a maximum of $350,000. It will be necessary to convince the bank manager of this new Canmore branch ability to repay its line of credit including any interest Management has provided the following list of assumptions to help in the preparation of the cash budget (note: you will need to use the projected income statement provided in Question 4 to complete the cash budget): 1. Beginning cash balance invested by owners 52,000 Quarter 1 Quarter 2 Quarter 3 Quarter 4 2. Sales by quarter (as % of total projected sales) 22% 27% 26% 25% 3596 3. Type of collections from customers: Cash Sales Credit Sales (accounts receivable) 65% Cash sales are collected in the quarter of the sale, all credit sales are collected in the quarter after the sale. 4. Merchandise purchases Merchandise purchases (cost of goods sold) are all paid in the quarter following purchase. (Quarter I purchases are bought in Quarter I but paid for in quarter 2) 5. Operating expenses All other operating expenses (all expenses except cost of goods sold) are paid on a monthly basis. 6. Required investment in equipment paid in cash in the first quarter 135,000 7,000 7. Quarterly income tax payments paid in cash 8. Minimum cash balance 22,000 9. Borrowing and Repayments: Any borrowing will take place on the first day of the quarter and any repayments are paid at the end of the quarter. All borrowing and payments are made in increments of $1.000. Interest on borrowing can be ignored. 9. Borrowing and Repayments Any borrowing will take place on the first day of the quarter and any repayments are paid at the end of the quartet All becoming payments are made in increments of S1000. Interest on borrowing can be ignored Required. Prepare a cash budget for the first year of operation in Cantere by quarter and in total Show clearly on year budget the quarters) in which borrowing will be needed and the quarter(s) in which repayments can be made, as requested by the company's bank Mountain Sports Cash Budget For the year ended December 31 Quarter Year Percent of Sales Estimated Sales 52.000 CASH BALANCE. Beginning Collections from customers Cash Sales Credit Sales CASH AVAILABLE Less: Cash Payments Merchandise purchases (Cois) Sales Com Advertising Property Taxes Rent salaries & Wages Equipment Purchase Income tax Installment Total Disbursements Cash Excess Deficiency) Financing (Note 1) Borrow Repayment of Principal shows negative) Net Financing Cash Balance, Ending Note 1: Financing Calculations Cash excess Deficiency) Minimum cash balance Amount to borrow repay Borrowing (Repayments) Rounded to increment of 1,000