John Cubic owns a manufacturing company that produces large marble statues. In 2023, the firm delivered strong results, generating substantial profits that John reinvested in the firm. Since last year, the company has been working at capacity, and it has suffered from inefficiencies. In 2024, John budgeted for similar results but changed the pricing strategy and production process to reduce workload. He decided to increase the price of the statues, hoping to achieve the same profit by selling fewer of them. He also tried to reduce material costs by sourcing the marble from another quarry.  This is the budgeted income statement for 2024: In addition, John gives you the following information: The actual results, however, did not meet John’s expectations. These are the actual results: To facilitate your analysis, John also provides you with the following data: John is confused by the results and needs your help to figure out what went wrong. Important: enter favorable variances as positive numbers and unfavorable variances as negative numbers.

You are planning a special wedding three years from today. You don’t know who your spouse will be but you do know that you are saving $25,000 today and $35,000 one year from today for this purpose. You also plan to pay the final $45,000 of costs on your wedding day. At a discount rate of 7 percent, what is the current cost of your special wedding?

A project will produce an operating cash flow of $31,200 a year for 7 years. The initial fixed asset investment in the project will be $206,900. The net aftertax salvage value is estimated at $62,000 and will be received during the last year of the project’s life. What is the net present value of the project if the required rate of return is 11 percent?

Ngata Corp. issued 22-year bonds 2 years ago at a coupon rate of 10.2 percent. The bonds make semiannual payments. If these bonds currently sell for 108 percent of par value, what is the YTM?

A stock had returns of 17 percent, 17 percent, 13 percent, 17 percent, 19 percent, and 10 percent over the last six years. What is the geometric return for the stock?

Assume you have been investing $30,000 a year for the past 4 years into an investment brokerage account. Today, your portfolio is valued at $150,000. What rate of return was earned on your investment?

Sister Pools sells outdoor swimming pools and currently has an after-tax cost of capital of 11.6 percent. Al’s Construction builds and sells water features and fountains and has an after-tax cost of capital of 10.3 percent. Sister Pools is considering building and selling its own water features and fountains. The initial cash outlay for this project would be $90,000. The expected net cash inflows are $17,000 a year for seven years. What is the present value of the Sister Pools project?

Ava’s Market is considering opening a new location with an initial cost of $200,000. This location is expected to generate cash flows of $32,500, $88,500, $120,000, and $200,000 in Years 1 to 4. What is the payback period?

Which one of the following choices best fits the definition of a vertical acquisition? The purchase

Jetright Corporation has a target capital structure of 60 percent common stock and 40 percent debt. Its cost of equity is 10 percent, and the cost of debt is 6 percent. The relevant tax rate is 40 percent. What is Jetright’s weighted average cost of capital?