...1. (6) Marian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $4000 at the end of each of the next three years. The opportunity requires an initial investment of $1000 plus an additional investment at the end of the second year of $5000. What is the NPV of this opportunity if the cost of capital is 2% per year? Should Marian take it?NPV = \frac{4000}{1.02}+\frac{4000}{1.02^{2}}+\frac{4000}{1.02^{3}}-\frac{5000}{1.02^{2}}-1000 = 5,729.69 Since the NPV>0 , Marian should take it. 2. (7) Your factory has been offered a contract to produce a part for a new printer. The contract would last for three years and your cash flows from the contract would be $5 million per year. Your upfront setup costs to be ready to produce the part would be $8 million. Your cost of capital for this contract is 8%. (a) What does the NPV rule say you should do? NPV = PV\,of\,cash\,flows-initial\,investment = 4,885,484.94>0 I should accept the contract. (b) If you take the contract, what will be the change in the value of your firm?The change will be $4,885,484.94 in favor 3. (10) FastTrack Bikes, Inc., is thinking of developing a new composite road bike. Development will take six years and the cost is $200,000 per year. Once in production, the bike is expected to make $300,000 per year for ten years. The cash inflows begin at the end of year 7. (a) Assuming the cost of capital is 10%: i. Calculate the NPV of this...
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...INTRO TO FINANCE CHAPTER 2 SUMMARY 1. The Balance Sheet Also known as Statement of Financial Position Lists the firm’s assets and liabilities The Balance Sheet Identity: Assets = Liabilities + Stockholders’ Equity Current Assets: - Cash or other market securities (short-term low-risk investments that can be easily sold and converted to cash) - Account Receivable (amounts owed to firm by customers who purchased on credit) - Inventories (raw materials, work-in-progress, finished goods) - Other assets (items such as pre-paid expenses like insurance) Long-term Assets: - Net property, plant and equipment (real estates or machinery that produce tangible benefits for more than one year) shows the book value of these assets (acquisition costs less accumulated depreciation) - Goodwill and Intangible Assets (brand names and trademarks, patents, customer relationships), suffers from amortization or impairment charge (value lost over time) - Others such as property held for sales, investments in long-term securities Stockholders’ Equity The difference between the firm’s assets and liabilities An accounting measure of the firm’s net worth Book Value is inaccurate as - Assets are mainly valued based on their historical cost rather than their true value today - Many of the firm’s valuable assets are not captured on the balance sheet (such as expertise, customer...
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...Why is Financial statements important to business? - a financial statements is important to control and manage our finances well inbusiness or family, without financial statements, then we will find it hard to know where the adverse financial or beneficial to us. Many ways can be done to make the financial statements. One of the simplest is to set up a monthly accounting report and details of current routine and out of our finances. Even that for beginners. Financial statements play a significant role in a collective bargaining agreement (CBA), that is, a mechanism that allows employers and employees to reach an agreement regarding rights and duties of workers. For example, a labor union delegate may show available cash balance to top management and explain that the corporation may not experience liquidity needs if benefits were increased by a certain amount. At regular period public companies must prepare documents called financial statements. Financial statements show the financial performance of an company. They are used for both internal-, and external purposes. When they are used internally, the management and sometimes the employees use it for their own information. Managers use it to plan ahead and set goals for upcoming periods. When they use the financial statements that were published, the management can compare them with their internally used financial statements. They can also use their own and other enterprises’ financial statements for comparison with macroeconomical...
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...Officer of Digby Company, I am proud to present a report on the status of our company to the Board of Directors. Here at the Digby Company, our strategy strives to provide our customers with the best products to increase our overall revenue growth and stock to satisfy our shareholders. Throughout eight years, Digby has used an aggressive strategy of investing heavily into R&D, production, and marketing. Because of our strategic decisions, we were able to take control of 40.36% of the market share, completely dominating our competitors in every segment. Our stock price has increased over 1000%, and our sales revenue has increased by 268%. We as a company have increased our S&P from CCC in our first year to AAA in year seven. Our finance, R&D, and production departments have been the major factors in the success of our company. We must also give credit to the hard-working employees that have devoted so much time and effort into building Digby into what it is today. Without their dedication, our company’s strategy would have been unsuccessful. As Digby moves forward as a company, we will continue to follow our strategy of investment and growth to expand our assets. To reach our ever-growing demand, we will continue to invest in R&D, production, and marketing to stay above our competitors. Research and Development Through our financing strategies, we were able to invest into R&D to develop the best products possible for our customers. We focused our R&D on...
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...Decision making is the process of choosing among alternative courses of action for the purpose of attaining a certain goal. In this paper I am going to scrutinise a number of courses offered in four different disciplines within a business school and identify how these courses relate with decision making. The conclusions are presented in tabular form. IVEY Business School and The University of Pennsylvania were my source of information. There school of Business offers many different courses all of them lying under or comprising of the different disciplines that are found in business school. Some of these include: i. Business, Economics and Public Policy Course Relation to Decision making Focus Computerized support Intro to Business Economics Explores the economics and politics of public policy to provide the student with an analytic framework. Policy issues relating to taxation, social security, low-income assistance. High Financing and Managing Government Covers cost-benefit evaluations which influence decision making. Role of public policy in affecting the efficiency of markets and the distribution of resources in society. High. Economic Analysis of Law Teaches students how to think as an economist about legal rules and evaluate alternative legal rules. Interpretation of legal rules Moderate Behavioural Economics, Markets, and Public Policy Applies insights from psychology to the study of economic phenomena and decision making. How psychology plays out in markets, where...
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...FIN 620, Fall 2006 CASE QUESTIONS DR. KISS Please allow these questions to serve as a guide when you prepare your case write-up in accordance with the syllabus or other instructions. Table of Contents Page Case: Name and Number, Bruner 5e Note Number I. C12- Best Practices—WACC No Questions II. C2- Bill Miller & Value Trust 2 III. C5- Financial Detective, 2005 Contained in Case IV. C7- Body Shop Intl* Contained in Case, but see page 3 V. C6- Krispy Kreme Doughnuts, Inc. 4 VI. C17- The Investment Detective* Contained in Case VII. C28- Intro. to Debt Policy & Value* No Questions, but review M & M Theory on debt and value of the firm. VIII. HBS Case- “Leveraged Betas and the Cost of Equity No Questions IX. C16- The Boeing 7E 7* 5 X. C26- Jet Blue Airways, IPO Valuation* 6 XI.a C35- Merton Electronics 7 XI.b C36- Carefour S. A.* 8 XI.c C44- Palamon Capital Partners* 9 XII. GM Dividend Policy Negotiation (Information to be provided by Dr. Kiss) * Note: Excel Spreadsheets containing some of the exhibits from the case are available for this case at www.mhhe.com/bruner5e FIN 620, CASE QUESTIONS DR. KISS Please allow these questions to serve as a guide when you prepare your case write-up in accordance with the syllabus or other instructions Case 2- Bill Miller & Value Trust Suggested Questions for Your Preparation of the...
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...Summer 2012 Undergraduate Program Office C140 PBB (319) 335-1037 http://tippie.uiowa.edu/undergraduate/ Finance 2011-12 This form is a planning tool only. To confirm specific graduation requirements, consult your degree audit on ISIS. I. General Education* (22-32 sh) Rhetoric Interpretation of Literature (req: completion of rhetoric) World Languages** Historical Perspectives International and Global Issues Values, Society, and Diversity Natural Sciences (lab not required) Social Sciences (excluding 6E:1, 6E:2) sh grade 4 3 0-10 3 3 3 3 3 Subtotal (I) ________ IV. Finance Major Requirements (20 sh) Required Major Courses* 6F:110 Financial Information Tech (coreq: 6F:100) (grade: S/F) 6F:111 Investment Management (prereq: 6F:100, coreq: 6F:110) 6F:117 Corporate Finance (prereq: 6F:100, coreq: 6F:110) 6A:120 Financial Acct and Reporting** (prereq: 6A:2) Choose three additional electives from the following: 6F:102 Principles of Risk Mgt & Insurance (coereq: 6F:100) 6F:103 Property and Liability Insurance (prereq: 6F:102); or 6F:104 Corp Fin Risk Mgt (prereq: 6F:102, coreq 6F:110); or 6F:105 Life and Health Insurance (prereq: 6F:102); or 6F:106 Employee Benefit Plans (prereq: 6F:102) 6F:108 Topics in Finance I (SP 09 or later, prereq: 6F:100) 6F:109 Topics in Finance II (prereq: 6F:100) 6F:112 Applied Equity Valuation (prereq: 6F:100) (req: 2.80 UI GPA). See Finance Department for special permission. sh grade 2 3 3 3 3 3 *If you entered UI prior to Summer 2011, check...
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...Organizational Theory, Design, and Change Jones 6th Edition Test Bank Click here to download the solutions manual / test bank INSTANTLY!!! http://solutionsmanualtestbanks.blogspot.com/2011/10/organizational-theory-d esign-and-change_18.html ----------------------------------------------------------------------Organizational Organizational Organizational Organizational Theory, Theory, Theory, Theory, Design, Design, Design, Design, and and and and Change Change Change Change Jones Jones Jones Jones 6th 6th 6th 6th Edition Edition Edition Edition Test Test Test Test Bank Bank Bank Bank -------------------------------------------------------------------------***THIS IS NOT THE ACTUAL BOOK. YOU ARE BUYING the Test Bank in e-version of the following book*** Name: Organizational Theory, Design, and Change Author: Jones Edition: 6th ISBN-10: 0136087310 Type: Test Bank - The test bank is what most professors use an a reference when making exams for their students, which means there’s a very high chance that you will see a very similar, if not exact the exact, question in the test! - The file is either in .doc, .pdf, excel, or zipped in the package and can easily be read on PCs and Macs. - Delivery is INSTANT. You can download the files IMMEDIATELY once payment is done. If you have any questions, please feel free to contact us. Our response is the fastest. All questions will always be answered in 6 hours. This is the quality of service we are providing and we hope to be your...
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...Understanding the Concepts Trina Gray Strayer University Intro to Finance Professor Michael Hamuicka March13, 2013 Understanding the Concepts Understanding the concepts of business is to know how the world works as defined by mathematical formulas and other representations of cause and effect in the physical world. Using ratios to be able to observe the world reason and draw accurate and rational conclusions. To understand how small businesses differ than large businesses it’s based on the current situation and future possibilities using profit seeking activities to convert factors of production into goods and services for customers in the market to achieve the business objectives. Liquidity is the ability to meet obligations when they are due. To measure your liquidity or your company’s success by meeting its short term obligation current assets to current liabilities Current asset include inventory product you sell and accounts receivable are your credit accounts Converting balances to cash Inventory turnover ratios can tell you how fast or slow the inventory is selling. Accounts receivable ratios can tell you if your customers are paying you or not. You need more assets than liabilities on your balance sheet at all times. How much cash a business generates and how much cash from core operations. The company will struggle to succeed if it has less money. Finical ratios are tools used for internal and external evaluations of the business performance Its effectiveness...
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...PROBLEMES ECONOMIQUES CONTEMPORAINS Exam final: 4-5 questions de cours Chap 1 : Partage de la VA Chap 2 : Inégalités et pauvreté Chap 3 : Problèmes liés à l'environnement (20/01/12) CHAPITRE 1 : PARTAGE DE LA VALEUR AJOUTEE (VA) INTRO : Le problème du partage de la VA, est un problème où sont mis en exergue le rôle des agents économiques et surtout leurs rapports de force précisément nous étudierons les rapports de force entre 3 types d'acteurs : apporteurs de capital (AC) ou capitalistes, les dirigeants, et les exécutants. La lutte pour le partage de la VA va nous permettre de concevoir un mécanisme de détermination du montant des rémunérations des agents économiques (pas de rémunération à la productivité marginale). Nous aboutirons à un constat : les rémunérations dépendent des rapports de force entre les acteurs. D'autres éléments rentreront en ligne de compte, le fonctionnement du marché financier, le rôle de la BCE, l’état de crise d'un pays, tous ces éléments peuvent modifier les inégalités de partage de la VA. I. La richesse Le PIB est l'indicateur le plus utilisé pour mesurer la richesse d'un pays. Il existe plusieurs méthodes (méthodes de production (Y), revenu...) Parfois le PIB augmente pour des causes négatives = externalités négatives A) Définitions *VP (valeur de la Y d'un pays) : il s'agit du montant de ce qui a été effectivement produit (en valeur monétaire) durant 1 année (incluant les variations de stock) *Ci (consommations intermédiaires)...
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...to class with a one to two page memorandum that summarizes your analysis. You may team up with one or two classmates and hand in one memorandum for the group. (I.e., I will accept a memorandum with up to, but not more than, three names on it.) Stern School of Business New York University Cases in Corporate Finance Marciano Tony Course Syllabus TENTATIVE I. Course Materials A. Packet I (Required): 1. Syllabus 2. Assignments 3. Cases 4. Readings B. Text (Very Highly Recommended but probably have it already): Brealey Myers Allen, Principles of Corporate Finance, McGraw Hill. (BM) You may already have this text. C. There will be some miscellaneous handouts during the course. AND THERE ARE FILES ON BLACKBOARD WHICH CONTAIN SPREADSHEETS FOR THE CASES WE WILL ANALYZE IN THE COURSE. EACH SPREADSHEET CONTAINS ONE OR MORE OF THE EXHIBITS IN THE CASE. THIS WILL MAKE IT EASIER FOR YOU TO SPEND TIME ON THE ANALYSIS, RATHER THAN PUNCHING IN NUMBERS. II. Course Objectives This course will use the case method to study the practical aspects of important topics in corporate finance. We will apply some of the concepts and techniques learned in intro...
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...Graduate Research Paper: Mahle Group Debra S. Tacconi BUS 640: The Financial Environment Dr. Alfred Kahl June 01, 2015 Table of Contents Abstract ............................................................................................................................... 3 Introduction ......................................................................................................................... 4 Literature Review................................................................................................................ 4 Analysis............................................................................................................................... 5 Principle 1: Money has a time value ....................................................................... 5 Principle 2: There is a risk return trade off ............................................................. 7 Principle 3: Cash Flows are the Source of Value.................................................... 8 Principle 4: Market Prices Reflect Information .................................................... 10 Synthesis............................................................................................................................ 11 Principle 1: Money has a time value ..................................................................... 11 Principle 2: There is a risk return trade off........................................................... 11 Principle...
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...Memorandum To: DeLaune/Simonov From: Courtney Lancaster Date: October 15, 2013 Subject: History of the Auditing Profession Similar to all aspects of the accounting profession, the auditing focus in the business world has evolved considerably over its history. The main drive behind the changes has been new legislation and a strict enforcement standard which more times then not was influenced by the fraudulent activity delivered by corporate management. By the creation of oversight policies and standard setting entities, these countless scandals have shaped the accounting and auditing profession into what we know today. In 1986 the state of New York passed legislation in which the credentials regarding a Certified Public Accountant were formally acknowledged and recognized, thus creating the accounting profession itself. In 1913 the United State of America ratified the 16th amendment leading to the creation of income tax causing a spike in demand for accountants. While these changes in legislation were coming about and the profession itself was growing rapidly there was still no entity in the US that regulated the profession. In 1917 the first step to set a standard for the profession was put into action. The Federal Reserve Board and Federal Trade Commission requested that American Institute of Accountants produce a bulletin for a standardization of auditing procedures. A publication titled “Uniformed Accounting” was released shortly after as a first set of published...
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...The purpose of the prospectus is to ensure that the company gives to the public a certain amount of information about its financial position when it is first floated and whenever it subsequently offers its shares and debentures to the public. It must fully and fairly disclose the relevant facts so the risk of investment can be assessed (Vanessa, 2011). Prospectus is a way to give the public a clear understanding of newly listed companies, the investing public should take time to read before investment. The providing of prospectus can also reduce the risk of fraud of companies as they need to disclose their companies’ information fully and fairly. From the Companies Ordinance, prospectus means any prospectus, notice, circular, brochure, advertisement, or other document which offering any shares or debentures of a company to the public for subscription or purchases, or calculated to invite offers by the public to subscribe or purchase shares or debentures. If the shares or debenture are offered to any section of the public, whether selected as members or debenture holders or as clients of the person making the offer or invitation, or in any other manner, it is to be regarded as an offer or invitation to the public(s 48A(1)). Thus, whether the document technically constitutes an offer or invitation to the public, it will fall within the prospectus provisions. The provision relating to prospectuses apply as the shares or debentures had been offered to the public by the...
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...This Module is a Masters level module in Financial Management and Control. It introduces students to the interaction of accounting and finance with management in the strategic ‘where are we now, where do we want to be, how do we get there, and where are we now’ learning loop. This module concentrates on answering four key questions: • Where do companies get their sources of financial information for performance evaluation, • How do they evaluate financial performance, plan business strategies and make financial decisions • What they should do in order to effectively control and manage the financial resource, • How do they report the results and performance to all interested parties. It ought to go without saying that Masters level work will involve a significant amount of work on your part. Simply attending class sessions will not get you through this module. There needs to be a lot of student interaction with the material and a process of development through the module. My advice is to attend all the class sessions (experience shows that those who do not severely disadvantage themselves – i.e. FAIL) and to make use of the teaching staff as much as possible, but also to see ‘class’ as a way of bringing things together; a time or focus. The vast majority of the workload for this module must be outside of class contact time. You ought to be reading widely to get to grips with the methodology and techniques of the subject. You will find a mix of numerical...
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