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PPA 602 FULL COURSE

September 27, 2015

PPA 602 FULL COURSE IS AVAILABLE AT $160 ONLY !

 

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Week 1:

Capital Budget
Analyze the following scenario: River County is planning several capital acquisitions for the coming year. These include the purchase of two new garbage trucks at $150,000 each, one new bulldozer at $240,000, three new riding lawn mowers at $16,000 each, and construction of an activity center in the part for $650,000. The expected lifetime of the various capital items is 10 years for the garbage trucks, 8 years for the bulldozer, 5 years for the lawn mowers, and 40 years for the activity center. Prepare a capital budget for the items to be acquired, showing their estimated lifetimes, and their per unit and total costs.
Clearly label the calculations for the required components of the capital budget using Excel. Use formulas to show the interrelationships and format the cells to insert a comma if there is more than three numbers and round to the nearest whole number. Explain your budget to the county council.: Public Financial Management

Submit to your instructor your two-to-three page Word document (not including the title and reference pages) and your Excel worksheet. Your paper should be formatted according to APA style as outlined in the approved APA style guide, and you must cite at least two scholarly sources in addition to the textbook.

Week 2:

Problem 1 is a variation on the break-even problem. It asks you to calculate the maximum amount that MMWC can spend per person per week on food. In other words, what is the largest variable cost that MMWC can afford to pay and still cover all of its fixed costs?

         From the problem set you know the Unit Revenue (P) is $32 per week. To find out how many people MMWC can feed in a week (Q), you have to do a little work. The problem set says that MMWC can prepare 9,600 meals per day. But its contract calls for it to deliver two meals per day per person. This means that MMWC can feed 4,800 people on any given day.  Note that each person eats 14 meals per week, so MMWC can feed only 4,800 people per week. Fixed costs (FC) are $36,000 per week.

 

 Problem 2 asks you to take the information from problem 1 along with some additional data on the seasonality of MMWC’s fixed costs and add the fact that the lowest food supply bid was $.50 below the break-even level that was calculated in problem 1. The budget below was derived from the problem-set facts as follows.

         Quarterly revenue equals the number of people served per week (4,800) times the number of weeks in a quarter (13) times the amount that Millbridge pays MMWC for each person-week ($32). Thus quarterly revenue = $1,996,800

         Quarterly fixed expenses: The problem set tells us that fixed costs vary by quarter. They are $38,000 per week in the winter (1st quarter), $34,000 per week in the second quarter, $35,000 in the third quarter and $37,000 in the fourth quarter. The calculations forquarterly fixed costs involves multiplying the weekly fixed costs per quarter by the number of weeks in a quarter. For the first quarter that is $38,000 13, or $494,000.

         Quarterly variable food costs are calculated by multiplying the number of people fed (4,800) by the number of weeks in a quarter (13) bythe cost of the food ($24.50 – $.50  $24.00). This is equal to $1,497,000.

 

 

 

Problem 3 is a capital budgeting problem. You were asked to decide whether MMWC should spend $625,000 for some new kitchen equipment. The equipment will allow MMWC to prepare 10,400 meals per day. This is an increase of 800 meals per day. That

Mead Meals on Wheels Center 4

 

 

 

means that MMWC can feed 400 more people per week with the addition of the equipment.

 

            Each person that MMWC feeds generates gross revenues of $32. Offsetting this is the marginal (variable) cost of providing them with food. We know from the director’s instructions to use the new food bid that the marginal cost of food is $23.25 per person per week. ($24.50 – $1.25). So, each additional person that MMWC feeds results in a marginal “cash flow” (the excess of marginal revenue over marginal expenses) of $32 – $23.25, or $8.75 per person per week. Because the new equipment will let you feed 400 additional people per week, purchasing the equipment generates $3,500 ($8.75 per person times 400 people) worth of cash flow each week.

            To find out if this is enough to justify the purchase of the equipment, you need to do a net-present-value analysis. Buying the equipment gives MMWC $3,500 of cash flow per week for 260 weeks (5 years times 52 weeks per year). This is an annuity. The case tells you that your interest cost is 12% per annum, approximately .23% per week (12% interest per annum divided by 52 weeks in a year). (If you did not use a spreadsheet to solve the problem, you probably did the calculations on a quarterly basis. In that case, the periodic interest is 3% per quarter [12% divided by 4 quarters per year] and the number of periods is 20, i.e., 5 years * 4 quarters per year).

 

 

 

 

Problem 4 asks you to prepare an incremental budget for the coming year. Let’s review what has happened:

 

Weekly people fed—up to 5,200 from 4,800, an increase of 400 per week

Revenue per person-week—unchanged at $32 per person per week

Food cost per person-week—$23.25, down from $24.00

Quarterly depreciation—up by $28,125 to account for the new equipment

Quarterly interest payments—up by $18,750 because of the equipment loan

First quarter fixed costs—up by $2,000 per week because of actual experience

Other quarterly fixed costs—unchanged

Week 3:

Volume, Risk, and Price Variances

 

Analyze the variances in the following scenario:

 

You are the nursing administrator for a medical group that expects a severe outbreak of the flu this winter. You hire additional staff to treat the patients and administer shots. Your special project budget was for 1,000 hours of part-time nurses’ services at $40 per hour, for a total cost of $40,000. It was expected that these nurses would administer 400 flu shots and treat 1,600 flu patients. The medical group typically charges $50 for a flu shot and $80 for treating a flu patient. Actually, the group had 1,200 patients who received the flu shot and 1,400 who had the flu and received treatment. On average, it was able to collect $55 per flu shot and $70 per flu patient.

 

Compute the volume, mix, and price revenue variances. How did things turn out for the group considering just revenues? How did they turn out from a profit perspective? Use either theapproach from chapter 8 or from Appendix 8-A to solve. Clearly label the calculations of the required variances using Excel. Use formulas to calculate the three variances and format the cells to insert a comma if there is more than three numbers and round to the nearest whole number. Explain the meaning of the variances in a two page Word document.

 

Week 4:

FIFO and LIFO

Analyze the following scenario: The Hospital for Ordinary Surgery uses pharmaceuticals for its patients. It started the year on January 1, with an inventory of 1,000 doses of an antibiotic drug that cost $17 per dose. On January 2, it purchased another 300 does for $21 each. From January 3 through June 30 it used 800 doses. On July 1, it bought 500 more doses at $23 each. From July 2 through the end of the year it used 400 doses. What is the inventory value at the end of the year, assuming FIFO? What is the value assuming LIFO? Clearly label the calculations of the inventory amounts using Excel. Use formulas to calculate the FIFO and LIFO inventories and format the cells to insert a comma if there is more than three numbers and round to the nearest whole number.

Explain the advantages and disadvantages of FIFO and LIFO inventory methods and evaluate the best inventory method is best for this scenario.

Submit to your instructor your two to three page Word document (not including the title and reference pages) and your Excel worksheet. Your paper should be formatted according to APA style as outlined in the approved APA style guide, and you must cite at least two scholarly sources in addition to the textbook.

 

Week 5:

Using the financial statements from the Major Medical Center Case Study at the end of chapter 14, analyze the following: •Review the auditor’s opinion letter and analyze any concerns. •Review the financial statements. Analyze any unusual items and examine the balance sheet, operating statement, and cash flow statement. •Review the notes and analyze any causes for concern. •Calculate the following ratios using Excel: common size, current, quick, days of cash on hand, receivables turnover, average collection period, fixed asset turnover, total asset turnover, debt, debt to equity, times-interest-earned, operating margin, total margin, ROA, and RONA. •Evaluate Major Medical Center’s financial status.sheet, operating statement, and cash flow statement?

Week 6:

 

Complete and submit to your instructor your choice of one of the listed assignments. Select one of the following choices:

1. Choice one - your role is as a public official elected at the local city level, 50,000 to 250,000 population. After reviewing the course concepts you will identify several issues that directly connect to the written assignment. In addition to reading the assigned text materials to develop knowledge about the concepts, a thorough master’s level education requires the development of effective research skills. In this assignment you will work to develop a rich resource of academic sources to support your paper.
Prepare a 15- to 20-page double spaced paper (excluding the title and reference page) on the following topic:
You have a $10 million dollar budget allocated to you by the city manager and can get up to 100% matching federal funds if you meet the federal standards. You have been asked by the mayor to determine how to allocate the budget to best support the needs of the city. These include but are not be limited to supporting capital requirements, operational requirements, and subsidizing non-profit organizations or used as economic incentives to bring new private concerns into the city.
Prepare a report for the mayor and city council on your proposed expenditure plan assessing the key course objectives including fund accounting and financial controls, control and management of public expenditures, government financial reporting requirements, analyzing financial statements and budgets to make appropriate administrative decisions, and applying budgets as disciplinary process.

2. Choice two - your role is as a consultant with ten years experience in the public financial management industry. After reviewing the course concepts you will identify several issues that directly connect to the written assignment. In addition to reading the assigned text materials to develop knowledge about the concepts, a thorough master’s level education requires the development of effective research skills. In this assignment you will work to develop a rich resource of academic sources to support your paper.
Prepare a 15- to 20-page double-spaced paper (excluding the title and reference page) on the following topic:
You are in the role of a consultant with ten years experience in the public financial management industry. A group of 20 civic leaders are considering forming a new task force and have asked you to prepare a proposal on whether they should build a facility in an area within 30 miles of the downtown center of your 500,000 population city for $100 million dollars.
Prepare a report for the mayor and city council on your proposed expenditure plan assessing the key course objectives including fund accounting and financial controls, control and management of public expenditures, government financial reporting requirements, analyzing financial statements and budgets to make appropriate administrative decisions, and applying budgets as disciplinary process.

3. Choice three - your role is as the chief operating officer of a large non-profit hospital or agency with ten years experience in the public financial management industry. After reviewing the course concepts you will identify several issues that directly connect to the written assignment. In addition to reading the assigned text materials to develop knowledge about the concepts, a thorough master’s level education requires the development of effective research skills. In this assignment you will work to develop a rich resource of academic sources to support your paper.
Prepare a 15- to 20-page double-spaced paper (excluding the title and reference page) on the following topic.
You are in the role of a chief operating officer. A board of directors has requested that you prepare a summary of the issues involved in a $50 million expansion. Because of local political and uncertain national financial policy of the to-be-elected national officials they may have to scale the expansion back to $25 million.
Prepare a report for the mayor and city council on your proposed expenditure plan assessing the key course objectives including fund accounting and financial controls, control and management of public expenditures, government financial reporting requirements, analyzing financial statements and budgets to make appropriate administrative decisions, and applying budgets as disciplinary process.

4. Choice four - your role is as the chief operating officer of a large government agency with ten years experience in the public financial management industry. After reviewing the course concepts you will identify several issues that directly connect to the written assignment. In addition to reading the assigned text materials to develop knowledge about the concepts, a through master’s level education requires the development of effective research skills. In this assignment you will work to develop a rich resource of academic sources to support your paper.
Prepare a 15- to 20-page double-spaced paper (excluding the title and reference page) on the following topic.
You are in the role of a chief operating officer of a large government agency. Your supervisors have requested that you prepare a summary of the issues involved in a potential reduction in U. S. Federal budget that will affect your agency by 40%.
Prepare a report for the mayor and city council on your proposed expenditure plan assessing the key course objectives including fund accounting and financial controls, control and management of public expenditures, government financial reporting requirements, analyzing financial statements and budgets to make appropriate administrative decisions, and applying budgets as disciplinary process.

5. Choice five - your role is as the chief administrative officer of a large non-profit health relief organization. After reviewing the course concepts you will identify several issues that directly connect to the written assignment. In addition to reading the assigned text materials to develop knowledge about the concepts, a thorough master’s level education requires the development of effective research skills. In this assignment you will work to develop a rich resource of academic sources to support your paper.
Prepare a 15- to 20-page double-spaced paper (excluding the title and reference page) on the following topic.
You are in the role of a chief administrative officer for a large non-profit health relief organization. A board of directors has requested that you prepare a summary of the issues about how to solve the health needs of an African country. Your organization has limited funding and will need to obtain subsidized medicine from major pharmaceutical companies. They also have the opportunity to get non-generic, non USDA approved, alternative stem cell derived medication from foreign sources.
Prepare a report for the mayor and city council on your proposed expenditure plan assessing the key course objectives including fund accounting and financial controls, control and management of public expenditures, government financial reporting requirements, analyzing financial statements and budgets to make appropriate administrative decisions, and applying budgets as disciplinary process.

 

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