Gulf States Manufacturing has the following data from year 1 operations, which are to be used for developing year 2 budget estimates: Sales revenues (17,500 units) $ 1,575,000 Manufacturing costs Materials $ 281,000 Variable cash costs 383,000 Fixed cash costs 153,000 Depreciation (fixed) 189,000 Marketing and administrative costs Marketing (variable, cash) 196,000 Marketing depreciation 47,000 Administrative (fixed, cash) 188,000 Administrative depreciation $ 17,000 Total costs $ 1,454,000 Operating profits $ 121,000 All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $15,050 will be replaced in year 2 with new equipment that will incur an annual depreciation charge of $21,500. Sales volume and prices are expected to increase by 7 percent and 3 percent, respectively. On a per-unit basis, expectations are that materials costs will increase by 5 percent and variable manufacturing costs will decrease by 2 percent. Fixed cash manufacturing costs are expected to decrease by 3 percent. Variable marketing costs will change with volume. Administrative cash costs are expected to increase by 3 percent. Inventories are kept at zero. Gulf States operates on a cash basis.

Onsider the following subscription behavior information from genie, a web site that provides tools for constructing a family tree (ancestor search). subscriptions cost $9.99 per month, but you are charged for the entire year at the time of purchase. there is a one-year minimum term when you sign up for the service. once purchased, subscriptions are set to renew automatically unless the subscriber cancels them. when a membership renews, it renews for a one-year term and again you are charged for the entire year. there are no variable costs associated with providing this service to an individual customer, but genie does engage in customer relationship activities that they believe will increase customer retention. these customer relationship activities cost genie about $10 per year per customer. based on a sample of 1000 customers that joined genie five years ago, near the time when the company was founded, they were able to determine how many of those customers remained subscribers in the second year, third year etc. based on this information, genie calculated the average annual retention rate to be 20%. genie uses an annual discount rate of 8%. a. last year, genie spent $10,000 placing advertisements on google. genie management believes that these advertisements were responsible for about 300 new subscribers. would you recommend to genie management that they purchase more google ads? b. suppose a newly-introduced loyalty program increases the number of customers that remained to 30%. does this new data change your answer to 9.a? c. do you have any hesitations or concerns about making recommendations to management based on your above estimate of customer lifetime value?

Suppose that a paving company produces paved parking spaces (q) using a fixed quantity of land (t) and variable quantities of cement (c) and labor (l). the firm is currently paving 1,000 parking spaces. the firm's cost of cement is $3 comma 600.003,600.00 per acre covered (c) and its cost of labor is $35.0035.00/hour (w). for the quantities of c and l that the firm has chosen, mp subscript upper c baseline equals 60mpc=60 and mp subscript upper l baseline equals 7mpl=7. is this firm minimizing its cost of producing parking spaces?

The five steps to financial success a. five money myths b. five foundations