...Course Project Part 1 Task 1: Assessing loan options for AirJet Best Parts, Inc. (1) EAR of National First Bank loan is 10.25%. APR = 3.25 (Prime Rate) + 6.75 M = 2 (Compounded semiannually) Formula: EAR = (1+APR/M)^M – 1 Solution: 0.1025 = (1+.10/2)^2 – 1 EAR of the Regions Best Bank loan is 13.99%. APR = 13.17 M = 12 (Compounded monthly) Formula: EAR = (1+APR/M)^M – 1 Solution: 0.1399 = (1+.1317/12)^12 – 1 (2) I recommend using National First Bank because the APR and the EAR are lower than Regions Best, which will result in paying back less interest over the course of the loan. (3) The monthly payment amount of the loan is $147,357.20. I agree with this decision because APR and EAR would be lower than National First resulting in paying back less interest over the duration of the loan. I got this answer with the following information and formula in Excel: PV= $6,950,000 r= 8.6% =PMT(rate,nper,PV,FV) m= 5 (years) Task 2: Evaluating Competitor’s Stock (1) The competitor I chose is Raytheon and the rate of return assuming the dividend growth rate is 5% would be 7.57%. Raytheon’s latest dividend amount was obtained from Yahoo Finance and used with the following formula. g = 5% R = ? D1 = 2.2 (dividend amount) P0 = $85.28 (stock price) Formula: R = D1/P0 + g Solution: R = 2.2/85.28 + .05 = .0757 = 7.58% (2) Current share price of Air Jet Best Parts, Inc. is $23.06. Rate of return is...
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...BUSN379 Course Project Part 1 Task 1: Assessing loan options for AirJet Best Parts, Inc. 1. Regions Best (1+ .1317/12)^12 -1 =0.14 EAR = 14% National First (1+ (6.75+3.25)/2)^2 -1 =.1025 EAR = 10.25% 2. Based on my calculations I would choose the National First loan because the EAR is only 10.25%. The EAR for the Regions Best loan is 14%. The ideal EAR for the company would be the smallest rate. 3. (1+8.6/12)^12 -1 = 8.95%. Monthly payment 8.95% of $6,950,000 = $622,025. By taking a smaller amount loan will save them money that they will need to pay back in the end. If they don’t borrow enough they may end up closing because they ran out of money to get their feet off the ground. It all comes down to saving money now and taking that chance of starting quickly, or spending money now to get the factory set up and make money later. Task 2: Evaluating Competitor’s Stock 1. Lockheed Martin Corporation as of May 12, 2012 Price: 85.21 Dividend: 4.00 Rate of Return 4*(1+.05)/85.21 + .05 =.1204 =12.04% 2. Current Share Price Rate of Return = 12.04% 1.50*(1+.01) / (.1204-.01) =$13.72 3. Preferred Stock Price 1.5 / .1204 =$12.46 I would assume that the stockholder would want the current price to be higher than the preferred price because that would mean the stock is doing better than projected to be...
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...Approach * Subject Matter Knowledge * Key Staff and Other Resources * Past Performance * Cost Written Proposal Format and Instructions Your written proposal must have a minimum of 20 pages but not exceed 25 pages in length and include the items below: * 1 Page Business Professional Cover Letter addressed to the bid contact, including your overall cost estimate (bid) for the project. * Technical Approach should be at least 5-7 pages and include a description of your management plan for the overall project. Hint: Use of PM concepts apply here! * Resumes should be summarized for the key staff that you are proposing indicating their past experience, skills and education relative to the bid selection (at least 3-5 – one page each). * 3 Past Performance references. Each reference must include a point of contact and contact information in addition to a brief description of the work performed by your company. * Description of a proposed teaming partner and/or subcontractors and explanation of how they will contribute to the project * Your proposed bid should include evidence your company capabilities, as well as...
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...comparing the interest rates Regions Best of 8.6% and National First Bank of 10%, Region Best offers lower interest payments Task 2 1 Using the dividend growth the rate of return for Raytheon with a dividend growth rate of 5% is : 2.31 dividend after one year applying 5% growth 100.96 current stock price 0.022880349 division of D1/current price 0.05 growth factor 7.29% Raytheon return 2 The current share price of AirJet Best Parts, Inc. using the rate of return from Raytheon of 7.29%with the constant growth rate of 1% and dividend per share paid on the stock was $1.50 is: Po=Do*(1+g)/R-g Po=(1.50*1.01)/(.0729-.01) 24.08585056 24.08585056 current price of one share 3 Preferred is paid first, less risky Common stock can be traded, price could go up more Dividend can go up on common but is fixed with preferred Task 3 1 The coupon rate that AirJet Best Parts should use to sell the bonds at par value is 6.92%. INTEREST RATE what is the yield PMT 37.5 (7.5% semiannual) PV (1062.00) Interest Solve Periods 40 (20 years semiannual) Future Value 1000...
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...Listed you will find data retrieved from AJ DAVIS department store. It includes data from five variables. I will discuss three individual variables and three pairing. The 1st individual variable I will discuss is Location: Frequency Distribution: Location Frequency Urban 1 22 Rural 2 13 Suburban3 15 The pie chart and frequency distribution indicates that majority of AJ DAVIS credit customer resided in the urban area, at 44%. However, the rural and suburban area accounts for over a quarter of the credit holders. This shows that although the major of credit customer resident in urban areas, it is important to cater to the rural and suburban customer as well. This will maintain current credit customers and can increase the number of credit customers in the store chain. The 2nd individual variable I will discuss is Income: Descriptive Statistics Mean 43.74 SD 14.63963 Variance 214.3188 As shown in the descriptive statistics, the mean income is 43.73,000 for credit customers. Credit holders for AJ DAVIS income range from 20,000 to 69,000. The highest frequency of income is 30,000-39,000. The 3rd individual variable I will discuss is Size: Descriptive Statistics Mean 3.42 Median 3 Mode 2 Mean household size for credit customers is 3.42. The highest frequency in household size is 2. This indicates that AJ DAVIS credit customer may shop for multiple people at their visits to the department...
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... Year Cash Flow 15% Rate of Return Present Value 0 $(3,000,000.00) 1 $1,100,000.00 $956,521.74 2 $1,450,000.00 $1,260,869.57 3 $1,300,000.00 $1,130,434.78 4 $950,000.00 $826,086.96 Less Investment $(3,000,000.00) $3,450,866.74 1. IRR % IRR= 22.38% 2. NPV NPV= $3,450,866.74 3. Should the company accept this project and why? I believe the company should look into this. The IRR is greater than the Required Rate of Return and the overall NPV is a gain. There does not appear to be a loss in this asset. 4. Explain how depreciation will affect the present value of the project. Depreciation would cause the project's PV to go up. This would be a good thing when considering the amount of taxes the company would save. 5. Provide examples of at least one of the following as it relates to the project: a. Sunk Cost - costs that are non-recoverable and shouldn't be used when considering an investment decision. An example of this would be AirJet has already purchased delivery trucks to deliver parts to vendors/customers. This cost would not be taken into consideration because it has no affect on the purchase of a new machine. This was a purchase that was done prior to any decisions made about buying the new machine. b. Opportunity Cost - This is the most valuable alternative that is given up if a particular investment is undertaken. Most of the time, these costs...
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...Task 1: Assessing loan options for Coca Cola. The company needs to finance $8,000,000 for a new factory in Mexico. The funds will be obtained through a commercial loan and by issuing corporate bonds. Here is some of the information regarding the APRs offered by two well-known commercial banks. Bank APR Number of Times Compounded National First Prime Rate: 3.25% + 7.75%= 11% Monthly Regions Best 12.57% Semiannually 1. Assuming that Coca Cola is considering loans from National First and Regions Best, what are the EARs for these two banks? (15 pts) Bank EAR National First 11.57% Regions Best 12.97% See Excel attachment for calculations 2. Based on your calculations above, which of the two banks would you recommend and why? Explain your rationale. (15 pts) Based on the calculations above I recommend Coca Cola obtain a loan from National First Bank. Although the decision can be based on the APR, the EAR is the most accurate interest rate because it takes into account compounding and expresses the true interest paid on the loan. The EAR for Regions Best Bank is 12.97% while National First Bank has an EAR of 11.57%, because National First Bank has the lower interest rate of the two it is the more logical choice since their loan option will charge less interest for the life of the loan. 3. Coca Cola has decided to take a $6,980,000 loan being offered by Regions Best at 8.4% APR for 7 years. What is the annual payment amount on this loan? Show your calculations...
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...The following report presents a detailed statistical analysis of AJ DAVIS department store customers. Data was collected from a sample of 50 AJ DAVIS credit customers for the purpose of learning more about the customers of AJ DAVIS. The first variable considered is Location, a categorical variable. The three subcategories are Urban, Suburban and Rural. The frequency distribution and pie chart are included. Measures of central tendency and descriptive statistics are not calculated due to the categorical nature of the variable. Frequency Distribution: LOCATION | FREQUENCY | Urban | 22 | Suburban | 15 | Rural | 13 | The largest number of customers belong to the Urban Location category (44%), followed by those in the Suburban Location category (30%). The least number of customers belong in the Rural Location category (26%). The next individual variable considered is Household Size, meaning the number of people living in the household. Size is a quantitative variable. The measures of central tendency and variation along with other descriptive statistics have been calculated for this variable. Descriptive Statistics: AJ DAVIS Customer Data - Household Size Total Variable Count N N* CumN Percent CumPct Mean SE Mean TrMean StDev C1 50 50 0 50 100 100 3.420 0.246 3.341 1.739 Sum of Variable Variance CoefVar Sum Squares Minimum Q1 Median ...
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...Keller Graduate School of Management Business Economics GM545 Online Graduate Course Summer Session A, July 2010 Project Part 1 16 July 2010 Exercise 1: Everyone’s Gasoline Problem One of the most classic application examples of supply and demand is the gas/petroleum market. Gas prices are established through basic supply and demand, when demand rises and supply falls, prices rise quickly; and just the converse when supply increases and demand falls, prices decrease (although rare in modern day occurrence). Fluctuations in gas prices are also the result of multiple industry factors including uncertainty in the economy, economic demands for oil and the price per barrel of oil. Speculation and forecasting also lend a hand in continuously moving market equilibrium. Intermediaries in the market, such as gas wholesalers, can also have a profound impact on the market through price increases, charging higher premiums for service and handling. Multiple influences affect the price of gas, some direct, others indirect. One such case of an indirect influence on price is natural disasters. The hurricanes in the Gulf of Mexico region have impacted gas prices on more than one occasion, more recently Hurricane Katrina. The devastation that rocked the nation impacted the supplies of crude oil and gas productions leading to a shortage. This shortage was felt almost immediately as prices per gallon of gas skyrocketed. (Chevron Corporation 2005-2008) Government regulations and taxation...
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...Keller Graduate School of Management Business Economics GM545 Online Graduate Course Summer Session A, July 2010 Project Part 2 7 August 2010 Exercise 1: Chapter 15, Question 14 (textbook page 424) National income and output are used in economic studies to estimate the value of goods and services produced in an economy—a snapshot of a country’s economic activity. A system of national accounts is employed to account for and record economic changes. National income is calculated using a variety of different methods. Some of the more popular methods include GDP (Gross Domestic Product), GNP (Gross National Product), NNP (Net National Product), NNI (Net National Income) PI (Personal Income) and PDI (Personal Disposable Income), among many others. [ (Investopedia ULC 2010) ] National income statistics provide us with a numerical comparison of one country’s economic situation with another country’s economic situation. Easily economic growth of countries can be compared over time or at a particular snapshot in time. National income accounts also provide government agencies and private businesses with a tool for economic planning and budgeting. What’s more is this information provides a comparison with the standard of living from one country to another. Many issues arise with accounting for the true national income of any country. Certainly there is a concern for double-counting, for example the outputs of one business are the inputs of another business. If both are accounted...
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...Cover Page Course Project Part II Military Retirement Ceremony Keller Graduate School of Management PROJ 595 – Project Risk Management Phillip Thatcher October 24, 2014 Edward Yerington TABLE OF CONTENTS Project Risks for Planning a Military Retirement Ceremony Course Project Part I ………………………………………………………………………………………….3,4,5,6,7,8,9 Introduction……………………………………………………………………………………………………………………………10 Decision Tree Analysis……………………………………………………………………………………………………………11 Discussion of Decision Tree…………………………………………………………………………………………………..12 Fault Tree……………………………………………………………………………………………………………………………….13 Discussion of Fault Tree………………………………………………………………………………………………………..14 Conclusions…………………………………………………………………………………………………………………………….15 Works cited…………………………………………………………………………………………………………………………….16 Introduction The Project Manager or the Commanding Officer of this project is responsible for the implementation of the Project Risk Management Plan. A formal detailed plan is required for these large complex and high-risk projects. These projects require a specified treatment plan to monitor and control risk. However, for smaller less complicated projects the risk plan is usually combined into the daily operations of the project tasks. In which I will assign to the appropriate sections. Such was the case for the planning a Military Retirement Ceremony. This report will discuss how risk were identified, prioritized and monitored for the project of planning...
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...Course Project Part 1 GM545 Business Econcomics (Fall Session A 2010) November 9, 2010 Ethical Issues in Business Ethics is an everyday occurrence in the corporate world as well as one's personal life. Business ethics is the same as normal ethics. In both cases, ethics is knowing what is right or wrong, and/or learning what is right or wrong in the environment in which one is involved. An ethical issue may not have a concrete answer; therefore a person's decision may depend on that person's situation. This may happen because "ethics is a broad and murky area and the workplace is full of ethical dilemmas and issues" (Orinsi, 1999). Therefore, employees feeling the pressure to perform may resort to unethical decisions in order to meet the goals that they feel are unreasonable. This can happen at any level of management (Orinsi, 1999). I work in a industry full of healthful living and fitness plans, one of the most recent corporate ethical dilemas I believe is reasonable to discuss, centers around Susan G. Komen (SGK) for the Cure and chosing cause-marketing partner, Kentucy Fried Chicken (KFC). Questions have been raised by various media, including The Washington Post and The Huffington Post (one specifically about pesticides and their link to corn, chickens and cancer) to which Andrea Rader' SGK's director of commnications, responded with dollar amounts of SGK's contributions to research and education. (Stengel, 2010) In the majority of its responses to the media...
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...Course Project Part 2 PROJ592 Proj. Cost and Schedule Control Leon Constructions, LLC (Construction of Residential Complex) Angel Carrasquilla D40123142 Keller Graduate School – MSc Project Management 1. Executive Summary Leon Constructions LLC, is a construction company that specializes in the residential and commercial building construction in Florida. The company normally constructs residential and commercial buildings for sell for a bigger profit, or leasing the spaces for other companies. And this project is one that the have taken in order to make a more suburn area in the state of florida, specifically in North Lauderdale. The scope of this project involves site and land development, design, construction and final finishing of this building. The Company would use an integrated approach to the construction approach and methodology. The approach, methodologies and techniques used in this project emphasize upon the following key points: * Effective site planning, land development and site preparation * Timely and good quality construction of the building meeting the design specification * The building should meet all the business related objective such as: * cost and quality objective * Schedule and resource objective as mentioned in the project charter * Timeline for this project * All statutory laws and regulations, guidelines and standards This project will meet all the statutory guidelines and regulations and would be reviewed...
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...PART II: – THE CHANGE ANALYSIS – IMAGES OF CHANGE This part of the project is presenting to readers an analysis of the images of change found in the two companies – Royal Philips Electrical and BMW. A review of the said companies is made and comparison based on their change stories. The image of change possessed by any manager is determined by how best he/she is able to plan, direct and control the organization's resources (human, finances, materials/equipment and time) in the best possible way. Rodger Dean Duncan (2013), maintained that managers of change should be gardeners as he presented it in a sub-heading “ Be a Gardener, Go for Growth; A first tendency of many business people is to fix things. But successful leaders invest energy in growing rather than fixing. They know the organization is a living organism with many interrelated elements capable of extinction or growth. Successful leaders are gardeners, they create a nurturing environment and they cultivate with care.'' The above quotation has given us a clear picture of how managers of change should look like and what they need to do in order to keep the organizations in continuous growth. Therefore, it is necessary to present a critical analysis of change images in organizations which may apply to any situation of management and not limited to any specific organization. 2.1 Review of the changes in each of the case study organizations: 2.1.1 Royal Philips Electronics Company: ...
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...MATH533: Applied Managerial Statistics Course project – part A I. Introduction. AJ DAVIS is a department store chain, which has many credit customers and wants to find out more information about these customers. A sample of 50 credit customers is selected with data collected on the following five variables: 1. Location (Rural, Urban, Suburban) 2. Income (in $1,000’s) 3. Size (Household size) 4. Years (the number of years that the customer has lived in the current location) 5. Credit balance (the customers current credit balance on the store’s credit card, in $) II. Individual variables. 1. Location Tally for Discrete Variables: Location Location Count Percent Rural 13 26.00 Suburban 15 30.00 Urban 22 44.00 N= 50 [pic] Interpretation: Look at the table and the pie chart above, we can see the location of AJ Davis’ customers is distributed in 3 areas: rural, urban and suburban. The majority of customer live in urban areas with 44%. Suburban areas with 30% of customers are the second and rural areas have the least amount of customers with 26%. 2. Income. Descriptive Statistics: Income ($1000) Total Variable Count Mean StDev Minimum Q1 Median Q3 Maximum Income ($1000) 50 43.74 14.64 21.00 30.00 43.00 55.00 67.00 Variable Range Income ($1000) 46.00 [pic] Interpretation: Based on the table and histogram, we have some comments as follow. The range of customer’s...
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