Sections 13.1 through 13.4 in Chapter 13 – The Capital Budgeting Process from the course textbook. Note, as mentioned in class, the error in the definition of “EBIT” on page 552 in Chapter 13 which should read “Earnings Before Interest and Taxes.” Also, in Example 13-3 at the bottom of page 556, leverage, λ, is erroneously called the “debt-equity ratio” whereas it should be called the “debt fraction” or the “debt-to-capital” ratio. 2. Answer Questions 5-12, 5-14, 5-16, 5-17, 5-46, 5-47 and 5-54 found
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things themselves." Francisco de Osuna, Third Spiritual Alphabet COURSE OBJECTIVES: By the end of this course you should be able to demonstrate greater competence in: * Doing short and long term financial planning and budgeting, strategic analysis and decision making under conditions of rapid change and uncertainty. * Applying the fundamental and practical principles of valuation to pricing and to real investment opportunities. * Gathering information, separating
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Budgeting Albert Salcido BUS 630 Managerial Accounting Professor John Kuhn August 13, 2012 Budgeting How do companies stay afloat while they are spending money and it appears that no money is coming in? Every year companies have dedicated departments that are looking at what is called a Master Budget for every part of the company. Many managers are retrieving records or historical data to help set the budget in their areas. “A budget is a quantitative plan for acquiring and using resources
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FnEc 220, Practice Test 2: Answer Sheet Name: _____________________________ I promise, on my honor, that I have neither given nor received improper aid on this test. __________________________________ Signature Part 1: 1. Increases because some fixed MOH ends up in inventory. 2. Unit-level, batch-level, product line, facility support 3. {utilities, indirect materials},{setup, material movement},{design, engineering}, {property tax, general
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Case 1 TEACHING NOTE KHF CORPORATION INTRODUCTION This case involves the evaluation of Kitty (Hawk Food), Inc., a restaurant food wholesaler in eastern North Carolina. The firm is experiencing difficulty paying trade debt and collecting trade receivables on time, which is causing cashflow difficulties and threatening the creditworthiness of the firm. The case should require 1 to 1 1/2 hours of outside preparation by students, and can be effectively discussed in a one-hour class. It is appropriate
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| | | Coke vs PepsiWeek 5 Case Study | | | | | | | | | | | | | | | | | | | | | | | | Artesia Stivison, Robert Higdem & Rocky Edmondson | Coke vs Pepsi Week 5 Case Study Question #1 Question #2 Question #3 Question #4 Can you make poor investment decisions and be profitable? What evidence do you see from the companies’ results that indicate how well they made investment decisions (capital budgeting). A company can make poor investment
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Case #19 Target Corporation Synopsis and Objectives . Scovanner, Target Corporation’s CFO, is preparing his thoughts prior to the November 2006 meeting of the Capital Expenditure Committee (CEC) as he considers the pros and cons of a variety of capital-investment proposals. During that meeting he will join other Target senior executives, including the CEO, to consider the merits of 10 capital-project requests (CPR), five of which are expected to require extra attention from the committee
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INDIAN RIVER CITRUS COMPANY CASE DISCUSSION QUESTIONS Question 1 Define the term "incremental cash flow." Since the project will be financed in part by debt, should the cash flow statement include interest expenses? Explain. Question 2 Should the $100,000 that was spent to rehabilitate the plant be included in the analysis? Question 3 Suppose another citrus producer had expressed an interest in leasing the lite orange juice production site for $25,000 a year. If this were true (in fact
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Homework assignment Alberto Pietrobon Homework assignment, question 1 Economies of Scale means that when the production of a product increases, the fixed costs are divided by the th number of units produced, therefore the average unit price decreases (Ross; Corporate Finance, 6 ed, p 825). Moreover, by producing large quantities a firm will also buy supplies in large bulks, and will obtain discounts for that reason. In other words, more a firm produces, less the cost for the single units is
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most of these decisions is the process of valuation, which will be emphasized throughout the course. Topics include criteria for making investment decisions, valuation of financial assets and liabilities, relationships between risk and return, capital structure choice, payout policy, the effective use and valuation of derivative securities (futures, options), and risk management. 1 COURSE MATERIALS Textbook The textbook for the course is: Corporate Finance (plus MyFinanceLab), Jonathan
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