Question

# Please Explain part 1,2,3

Thanks

**Part 1**

**Using the table below, describe the types of budgets. In your description, include:**

** • The objective of the budget**

** • How the budget assists an organization in managing its financial activities**

** • What types of data need to be included in that specific budget**

**Type of Budget**

**Description**

Cash Flow

Operating

Sales

Static

Financial

**Week Three Financial Exercises **

**Part 2**

**Complete** the following problems using the following ratios:

Sales level at which operating income is zero

o If sales above breakeven, then profit

o If sales below breakeven, then loss

o Fixed expenses = total contribution margin

Total sales = total expenses

Break Even Point: ** Unit Sold** = Fixed expenses + Operating Income / Contribution Margin

*per unit* Break Even Point: ** Sales $** = Fixed expenses + Operating Income / Contribution Margin

*Ratio*

Calculate the break even number of units if the fixed expenses are $7,000 and the contribution margin is $14 per unit.

*Answer:*

Calculate the break even sales dollars if the fixed expenses are $7,000 and the contribution ratio is 40%.

*Answer:*

Calculate the break even number of units with a target profit of $120,000 if the fixed expenses are $15,000 and the

contribution margin is $60 per unit.

*Answer:*

**Week Three Financial Exercises **

**Part 3**

**Complete the following problems:**

How much will you have saved after 6 years by contributing $1,200 at the __end__ of each year if you expect to earn 11%

On the investment?

*Answer:*

A business owner plans to deposit his annual profits in an investment account earning a 9% annual return.

If the owner starts with their first deposit today for $22,000 and expects to make the same profit for the next 7 years, how

Much will be saved for retirement at that point?

*Answer:*

An investor plans to invest $500 a year and expects to get a 10.5% return. If the investor makes these contributions

at the end of the next 20 years, what is the present value of this investment today

*Answer:*

What is the present value (PV) of a 12-year lease arrangement with an interest rate of 7.5 percent that requires annual

payments of $4,250 per year with the first payment being due now?

*Answer:*

A recent college graduate hopes to have $200,000 saved in their retirement account 25 years from now by

contributing $150 per month in a 401(k) plan. The goal is to earn 10% annually on the monthly contribution.

Will they have the $200,000 at the end of the 25 years?

*Answer:*

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