STRATEGIC FINANCIAL MANAGEMENT [PA2] PRACTICE EXAMINATION PA2 Before starting to write the examination, make sure that it is complete and that there are no printing defects. This examination consists of 19 pages. There are 4 questions. READ THE QUESTIONS CAREFULLY AND ANSWER WHAT IS ASKED. To assist you in answering the examination questions, CGA-Canada includes the following glossary of terms. Glossary of Assessment Terms Adapted from David Palmer, Study Guide: Developing Effective
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investment project is most likely to be accepted by the payback period rule and not accepted by the NPV rule if the project has a) b) c) d) e) a large initial investment with moderate positive cash flows over a very long period of time. a very large negative cash flow at the termination of the project. most of the cash flows at the beginning of the project. all projects approved by the payback period rule will be accepted by the NPV rule. The payback period rule and the NPV rule cannot be used to evaluate
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Magers for successful leadership upon Cook’s retirement. Thanks to Cook’s management the first half of 2000 was a modestly successful period, but the second half of this year will be a challenging period because of price reduction on 100 series. With excess capacity for all industry players and very similar products, price competition was always a threat for the industry. Several changes have been proposed by the company management to increase profit and improve long-run profitability. ANALYSIS Careful
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Assumptions Used Cash Flow Vulcan And Semi Automatic Finance Essay Delloyd Engineering Sdn Bhd (“Delloyd”) specializes in the production of precision metal castings that are components used in the automotive industry. The company is considering automating part of the production process by considering the purchase of the Vulcan Mold Maker, an automated molding machine. The company has proposed to allocate RM 1 Million towards investing into the new molding-machine proposal, and will make a decision
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14 Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $2,011,756. have a life of five years, and would produce the cash flows shown in the following table. Year Cash Flow 1 $569,998 2 -211,846 3 883,551 4 797,704 5 737,014 What is the NPV if the discount rate is 12.65 percent? (Enter negative amounts using negative sign e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25.)
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particularly in Basis of Consolidation, Judgements and estimation, Property, Plant and Equipment (PPE), Depreciation and Revenue recognition. Income Statement Analysis, Balance Sheet Analysis and Cash Flow Analysis are attached in the appendices. On Financial Analysis, ratios of operating management, investment management and profitability, and financial leverage and liquidity are analyzed. Methods of analysis include time series analysis and cross-sectional analysis. Calculation on margin ratios, return
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Table 1 Performance analysis of EPM for the past 3 years from 2006 to 2008 Table 2 Percentage of increase/decrease in the account balances Table 3 Increase of price of feed and production cost In late 2008, the operating cash was running low because of the problems in cash liquidity. From the abstract of account above, we found that the cost of sales was increasing from 2006 to 2008 and it is too close to the revenue amount. However, in 2007, the cost of sales increased while the revenue did not
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community. Table of Contents 1.0 Executive Summary 1.1 Objectives 1.2 Mission and Vision 1.3 Keys to Success 1.4 Start-up costs and funding 1.5 Company Ownwership 1.6 Products and Services 1.7 Market 1.8 Strategy 1.9 Management 1.10 Financials 1.11 Investor Considerations 1.12 Disclaimer 2.0 Company Summary 2.1 Start-up Summary 2.2 Start-up Funding 2.3 Company Ownership
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regard, these expenses represent an asset for the company and are recorded on the balance sheet. Effects of Capitalization on Key Figures The decision to capitalize or expense some items depends on management. As such, this choice will have an impact on a company's balance sheet, income statement and cash flow statement. It will also have an impact on a company's financial ratios. Here is what the decision will have an impact on: Net income - Capitalizing costs and depreciating them over time will show
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Financial Statement Analysis American Airlines (AMR) Abstract American Airlines (AAs), American Eagle, and American Connection currently provide scheduled service to 250 cities in 40 countries, with an average of over 3,400 daily flights. Together, these carriers operate a fleet of over 700 aircraft and are subsidiaries of the AMR Corporation. Though AMR was founded in 1982, the AAs brand has been a major player in air travel for over three quarters of a century (www
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