Answer:
e. outsourcing.
Explanation:
Based on the information provided within the question it seems that what Zappos is doing is called outsourcing. This is the act of when a company hires a third party company to undertake all the responsibilities of a certain task or division of the contracting company. Which in this situation Zappos is outsourcing all of their distribution responsibilities and tasks to UPS who are most likely better equipped to handle this and in a cheaper manner.
How much free cash flow did Wells generate is $1,770
First step is to Determine the Operating income (EBIT)
Sales $8,250
Less Operating costs excluding depreciation ($4,500)
Less Depreciation ($950)
Operating income (EBIT)$2,800
($8,250-$4,500-$950)
Now let determine How much free cash flow did Wells generate using this formula
FCF = EBIT(1 -Tax rate) + Depreciation- Required capital expenditures -Required addition to net operating working capital
Let plug in the formula
FCF = $2,800×(1-0.35)+$950 -$750 -$250
FCF = $2,800×(0.65)+$950 -$750 -$250
FCF = $1,820 + $950 -$750 -$250
FCF = $1,770
Inconclusion How much free cash flow did Wells generate is $1,770
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Answer:
The value of the levered firm is $917.35 million
Explanation:
To calcuate the value of the levered firm under the Miller Model, we have to use the following formula:
Value of levered firm (VL) = Value of unlevered firm(VU) + [1- { (1-Tc) * (1-Te) / (1-Td) } ] * Value of Debt (D)
= $850 million + [1 - { (1-0.34) * (1-0.25) / (1-0.30) } ] * $230 million
= $917.35 million. Value of levered firm (VL)
Answer:
I currently work for a company that provides services to other businesses (B2B), and we work on a yearly contract base. Since it's a B2B we don't have a lot of customers, they are only 11, but each customer is very important to us.
The sales process and contracts for the next year are usually finished by November and at that time we must prepare a cost budget. The main problem we are currently facing is that we use some imported goods and since many tariffs have been increasing, there is a lot of uncertainty about future prices.
When you import goods and use the FOB destination, the seller is responsible for delivering the goods up to a port of entry, but we are responsible for the paperwork and applicable tariffs. Since tariffs increase during a few months and then decrease, and then increase again depending on the president's mood, our budget has a large percentage of "just in case".
Besides that problem with imports, our company also signs yearly contracts with most of the employees depending on the number of contracts and workers needed. We are very good at estimating overhead expenses, since experience is a great teacher in our specific case.
If we didn't have the problem with uncontrollable external factors (tariffs), prior jobs help us to determine budgets that are usually quite exact, our variance (either + or -) is usually less than 3%.