...Guillermo Furniture Store Recommendation Guillermo Furniture Store (Guillermo) is a small business that deals in handmade custom furniture that is created by the sole proprietor Guillermo Navallez and his employees. Guillermo is located in Sonora, Mexico, an area that has become both a tourist attraction and a place for some people to call home. Guillermo is facing the liquidation of the store if the decision maker does not analyze all possible alternatives and accept the recommendation of a final decision (University of Phoenix, 2010). This paper will examine a few alternatives that have been suggested for the success of the enterprise. A recommendation of a final decision for Guillermo has been included, in addition to, the justification for the recommendation. A pro forma cash flow budget for the company has been included as a guide for the next five years beginning with year 2012 and ending with year 2016. Alternatives Applying the principles of finance to any situation can result in a more informed decision that is made from a suggested recommendation. Capital Market Efficiency, Time Value of Money, Signaling, Behavioral, and Risk Return Trade-off are financial principles that the decision maker can focus on before accepting a final recommendation about the firm’s capital structure (Emery, Finnerty, & Stowe, 2007). Final recommendation Pro forma cash flow budget 2012-2016 ...
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...LEARNING TEAM CHARTER – TEAM “A” |Course Title |FIN/571 Foundations of Corporate Finance | | | | | | | | | | | Team Members/Contact Information |Name | |Phone | |Time zone and | |Email | | | | | |Availability during the Week | | | | | |xxx-xxx-xxxx | |(e.g., AZ “Mtn Time”, Mon-Sat 9-11pm) | | | |Dana Cannon | |202-327-4911 | |Text anytime | |danacannon2003@yahoo.com | |Kirkland Browne | |516-996-3792 | |Text anytime | |Elqsverse9@gmail.com | |Philippe Biboum | |704-287-7416 | |Text anytime | |biboum2002@hotmail.com | |Kevin Mobley | |704-564-0122 | |Text anytime...
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...Case Brief The Issue Whether the state of Nevada should judicially adopt the doctrine of strict liability? If so, was there a defect in the manufacture of the Squirt bottle that caused the plaintiff’s injuries? The Rule Of The Law Public policy demands that manufacturer, distributor, retailer, in other words, all in the chain of distribution must be held strictly liable for marketing a bottle of beverage in a condition dangerous for user for injuries resulting from such use, although the seller has exercised all precaution. Section 402A of the Restatement (Second) of Torts, which states that who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if the seller is engaged in the business of selling such a product, and it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold. This rule applies although the seller has exercised all possible care in the preparation and sale of his product, and the user or consumer has not bought the product from or entered into any contractual relation with the seller. (Page 96, Legal Environment, Online Commerce, Business Ethics, and International Issues...
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...The Value of Stock According to today’s investors, the stock market is simply the pairing of a buyer and a seller. An investor must first understand the meaning of a stock and that it is simply a small part of ownership of a company. Several options are offered to an investor such as bonds and stock (preferred or common). Bonds are a more secure option for an investor. With a bond, the investor has a contract with the company that in a certain time period the investors’ interest grows. If the company does not due well the investor still receives a return in principle and interest. Common stock is simply a security that represent ownership of a company. Common stock holders are at the bottom of the priority ladder when it comes to ownership structure of a company. Preferred stock holders are in between the ownership ladder. Preferred stock is a stock that entitles the stock holder/investor to a fixed dividend but unlike common stock holders, they do not have voting rights when selecting board members. Investors now believe that attitudes and the approach to investing have changed as now people see it more of a sport. Another noticeable change is that current investors are now starting to participate more in the way they manage their stocks and that is due mostly to it being attached to their retirement plans. With now more information being available to the individual investors, they are able to make a more educated decision in how they...
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...Week 4 Study Guide: Business Valuation Readings and Key Terms • Ch. 5 of Fundamentals of Corporate Finance o Time value of money o Time zero o Future value (fv) o Principal o Simple interest o Compounding o Compound interest o Discounting o Discount rate o Present value (pv) o Rule of 72 • Ch. 6 o Annuity o Perpetuity o Ordinary annuity o Present value of an annuity (PVA) o Amortization o Future value of an annuity (FVA) o Annuity due o Annual percentage rate (APR) • Ch. 7 o Total holding period return o Expected return o Variance (σ2) o Standard deviation (σ) o Normal distribution o Portfolio o Diversification o Coefficient of variation (CV) o Covariance o Diversifiable and nondiversifiable risk o Market portfolio o Market risk o Beta (β) o Capital asset pricing model (CAPM) o Security market line (SML) • Ch. 8 o Coupon payments o Face value or par value o Coupon rate o Opportunity cost o Par value bonds o Discount bonds o Premium bonds o Yield to maturity o Effective annual rate (EAY) o Realized yield o Interest rate risk o Yield curve • Ch. 9 o Bid price o Offer (ask) price o Dividend yield o Common stock o Preferred stock Content Overview • Time value of money ...
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...University of Phoenix Corporate Finance FIN/571 June 27, 2011 Guillermo Store Concept This paper will provide data about the financial concepts of the Guillermo Furniture Store. Upon the completion of viewing the scenario, the student will present the financial concepts that are represented in the scenario and how they relate to the readings in Chapter Two of the text. Located in Sonora, México the Guillermo furniture store is owned by Guillermo Narvaez. The store was established in the late 1990s. Guillermo’s is known for its one-of-a-kind, handmade pieces. Unfortunately for Guillermo, in recent months two competitors have caused a decline in business. Guillermo now finds itself in competition with two other companies in an industry that they once were on top of. One competitor, an international company, uses the most modern technology to create the parts for its furniture. This company stays ahead of Guillermo because this process is cheaper, faster and much smarter. Next there was the high cost of labor, Guillermo has to be able to afford the expensive wood and make the payroll when it is time for employees to be paid. Working against these problems will result in a profit loss. Guillermo faces the concept of self-interest. This principle says that, “when all else is equal, all parties to a financial transaction will choose the course of action most financially advantageous to themselves (Emery, Finnerty, & Stowe, 2007).” Guillermo demonstrates this...
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...Interpreting Financial Results Lisa Edwin FIN/571 March 9, 2015 Arnold Harvey Interpreting Financial Results Businesses in the United States creates financial documents in order to explore how each part of the company is doing and in return make changes to any department that’s not doing well financially. For instance if accounts payable is high compared to previous years then it will determine that the company isn’t paying their debts. The comparison shows the failure and the success of the company. It also helps with improvements as well. Best Buy is one the world’s largest company in home improvement. Best Buy is heavily traded on the stock market along with its competitors such as Amazon. The question is has Best Buy maintained financial throughout the years? Let’s take a look at the various ratios and compare the last three years. A ratio is the method of finding the value of a company by comparing the book value of a firm to its market value (Investopedia.com, 2014). Market Value Ratios tells the equity of the business. The greater the ratio the greater the capital (Investopedia.com, 2014). ROE = Net Income + Net Sales + Total Assets Net Sales Total Assets Total Equity 2012 1,277M + 49,747M + 17,849M 0.03 + 2.79 + 2.45 = 5.27% 49,747M + 17,849M + 7,292M 2013 (1,231M) +50,705M + 16,005M 0.02 + 3.17 + 3.67 = 6.86% 50,705M + 16,005M + 4,366M 2014 (441M) + 39,827M + 16,787M .011 + 2.37 + 4.52 = 6.90% ...
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...Text Problem Sets - Week Two Vaughan Thompson FIN/571: Corporate Finance April 22, 2013 Text Problem Sets: FIN/571 - Week Two Chapter Five Question # 4 Define the following terms: bond indenture, par value, principal, maturity, call provision, and sinking fund. Bond indenture. Bond indenture is a legal contract for a publicly traded bond. The structure of this contract outline incentives explicitly by detailing responsibilities, constraints, penalties, and oversight required. For example, contracts may specify interest and principal payment timing and amounts. Par value. Par value denotes face value or designated value of a bond or stock. Par value of a bond is typically $1,000 and the sum investors pay upon issue. It is also the sum received when they redeem the bond matures. Conversely, stock par value is frequently set at $1. In this case, par value is an accounting tool that shows no connection to the stocks’ market value. Principal. The term “principal” refers to a sum of money one borrows or invests. The face amount of a bond - the value printed on a stock or bond, or a debt balance. Principal does not encompass finance charges. Principal also describes an investor represented by a broker who executes trades on that investor’s behalf or an investor who trades for his or her own benefit. Principal also refers to a party affected by an agent’s decisions in a principal-agent relationship. Maturity. Maturity is the end of a bond’s life. In finance, maturity (or...
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...Business Structures The purpose of this paper is to identify the different business structures and explain the advantages and disadvantages of each. Each business structure has their own legal and tax implications. It is important to understand the variances of each structure to operate a business. The different structures are the following: general corporation, S corporation, limited liability corporation, sole proprietorship, and partnership. Corporation Corporations are the most complex business structures. There are three types; general corporations, s. corporations, and limited liability corporations. “Corporations are a separate legal entity owned by stockholders” (Films Media Group, 2011). The advantages of corporations are the limited liability, the advantage to produce capital, and corporate tax rates. S corporations are usually better for small businesses that want the tax savings, but they have a stricter operational process. An LLC is not a corporation but has some of the same advantages of an S corporation with fewer restrictions. LLCs are becoming more popular because they are easier to obtain. A famous disadvantage of corporations is double taxation; which occurs when the corporation shows profits and when shareholders are paid. Corporations are also costly and highly regulated. Sole Proprietorship Sole proprietorships can be an economical way to start a business. This is business structure that owners prefer when they want absolute authority. An immense...
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...Guillermo Furniture Store Analysis Fin571 Guillermo Furniture Store Analysis Guillermo Furniture Store (Guillermo) is a manufacturer of furniture located in Sonora, Mexico and is the largest industrial furniture manufacturer in the area. Guillermo has investment opportunities but must consider past and current choices. Guillermo Navallez, the owner of Guillermo’s Furniture store, has been experiencing a slowdown of business, primarily due to the increase in competition. Due to the changes in the operating environment, Guillermo must find an alternative investment opportunity. Regardless of the opportunities available, the value of each is determined by the net present value they offer. This paper, which will include the evaluation of finance concepts from the readings, will identify which alternative is necessary to improve business. It will include an evaluation of possible changes and demonstrate how capital budget analysis can provide the necessary information for the best possible return on investment. However, due to the competition Guillermo is in a situation, which requires an evaluation of processes and find ways to compete. With more competitors in the market, the labor costs have increased but at the same time, the competitors have introduced techniques that lower production costs. These changes have decreased Guillermo's profit margins significantly, but Guillermo can use capital budgeting to increase the profit margins. The geographical location of...
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...Financial Principles and Concepts Nicole Ruthig FIN/571 December 10, 2012 Gurpreet Atwal Financial Principles and Concepts Financial concepts can be used when a company is considering various options. Which options cost more and which options will result in higher gains are two of the financial factors that affect decisions. In the University of Phoenix (n.d.) scenario, Guillermo’s Furniture Store has several options to consider which can help bring the revenues back to the company. This paper explains and relates three basic principles and concepts to the scenario. Financial Principles When it comes to corporate finance, there are many principles that are important. These include the principles of self-interested behavior and risk-return trade off. How they relate to the scenario involving Guillermo’s Furniture Store vary based on the principles and concepts themselves but they relate in one way or another. Guillermo, the owner of the furniture store is faced with many options once his sleepy little town expands (University of Phoenix, n.d.). The main financial principle that is described in the furniture store scenario is the behavioral principle. In this principle, people look to others for guidance based on what similar companies have done recently (Emery, Finnerty, & Stowe, 2007). Guillermo knew of his options to either be bought out or acquire another company based on what other companies in the area had done, he was following the behavioral...
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...Week 4 Learning Team Reflection Anitra Stephens, April Bates, Calvin Beidleman, Nikki Torres, Raymond Wentler, Sean Lechman, Russell Wall FIN/571 April 13, 2015 Gurpreet Atwal Week 4 Learning Team Reflection Introduction Stock valuation is needed to ensuring the value of an organization’s stock and worth in the industry. There are various measuring methods that organizations can use to determining and establishing the value. Some of the methods and the reason for valuation have been identified below. Stock types and bonds: The stock valuation video covered the different types of stocks and well as bonds. There are common stocks and preferred stocks. Preferred stocks are considered to be a hybrid between a common stock and a bond. This form of stock will have no maturity and can be sometimes redeemable. A common stock is when an individual purchases a share of an organization and they own that share until they want to sell their share for the market value. A debt or a bond is another form of investment that private investors can use. A bond is a contract which has a set time period, as well as set cash flows. Once the bond is matured then the investor will receive their set return amount, although investors who have bonds will receive their return on investment before the stockholders. Assumptions and Indexes: Assumptions made on the valuation of a stock or company’s value in the future are crucial when determining the future value of a company based on its revenues. Many...
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...Working Capital Management Bryan Alley, Gabriella Goodfield, Juliano Klein, Shamsuddin Mehri, Chinwe Nwogene FIN/571 September 14th, 2015 Christopher Kubik Introduction In the assigned video, the owners of Finagle A Bagel describe the path to success for the business. The purpose of opening the bagel store was to expand it to its maximum potential capacity. In this week’s reflection, the team will briefly overview and describes some of the important concepts of working capital, the financing strategies, and cash flow management of Finagle A Bagel to stay competitive at market. Finagle a Bagel Working Capital “The management of current assets, such as money owed by customers who purchase on credit, inventory, and current liabilities, such as money owed to suppliers, is called working capital management” (Parrino, Kidwell, & Bates, 2012, p. 3). Alan Litchman and Laura Trust stated that in order to understand working capital, it all started with a great bank relationship and choosing a good bank. Choosing the wrong bank could be the start of ruining a business. So, the couple started with a good bank, in addition knowing their customers and their tastes and demands. Fulfilling the customer demand and satisfying their tastes will sell their products. The sales will give them cash flow. This very cash flow gives the owners the chance to pay off their debts. The owners, Mr. Litchman and Ms. Trust, decide to open the business they decide to take on debts. Over time they have used...
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...Fin571 Week 5 Problem Sets Lamar September 19, 2010 FIN/571 University of Phoenix Denny Frischkorn Week 5 Text Problem Sets Exercises Chapter 17 B1: (Choosing Financial... Save Paper Eco561 Week 1 quantity supplied on a fixed supply curve, during the pre-Superbowl weeks, there is a spike in the demand and quantity supplied as consumers are readying for the big... Save Paper International Corporate Finance/Fin Gm571 Week 3 The current credit terms dictates 15% upon purchase and 85% the following week (Emery, Finnerty, & Stowe, 2007). As valuable a customer who LS is to Murray, LS... Save Paper Week 2 Checkpoint Xeco212 iPad within hours, and retailers werent replenished for weeks because the demand was too high for production. So when they did this, they didnt have a significant... Save Paper Hca230 Week 1 Assignment HCA230 Week 1 Assignment Today Managed Care is the most predominant form of insurance in the United States. Insurances such as PPO, POS, and HMO plans are all... Save Paper Two Weeks With The Queen courage and prejudice expressed in a very realistic way that we can relate to. Two Weeks with the Queen gives the reader a sense of reality. In the beginning... Save Paper Week 5 Qnt/561 show that the production rate at the Scranton Plant has changed from 200 per week. The Two Sample Test of Hypothesis The two- sample hypothesis testing... Save Paper TraInIng In Acc point around which a learning organization may develop. The training program...
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...Financial Concepts in a Changing Business Michael Magons FIN/571 April 9, 2012 Beatrice Jones Financial Concepts in a Changing Business Guillermo Navalles’s furniture store is facing some new competition and has choices to make (University of Phoenix, 2012). These choices include competing with the new firm, absorbing or being absorbed by other firms, or changing from mainly manufacturing to distribution. Changing technologies and changes in the labor force influence decisions Guillermo needs to make to improve his business. Financial concepts associated with these types of changes are discussed here. Guillermo is compelled to make decisions about how he runs his company because of his own financial self-interest (Emery, Finnerty, & Stowe, 2007). The opportunity cost for Guillermo’s firm has changed since the arrival of new competition, and he must decide how to change his variable costs to maintain the prosperity of his company. His options include altering labor costs through automation or changing from a manufacturer to a distributor with more outsourcing (University of Phoenix, 2012). He is also displaying the behavioral principle because he is considering either copying the competition or adopting a business model that works for other furniture firms. Copying the behavior of another could work for Guillermo. The comparative advantage principle can also work with Guillermo because he can offer a patented coating that is flame retardant and...
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