response of no more than 150 words for each the following questions: |Compare a review and an audit. What are the differences? What are the similarities? | |The accounting information is the target of the audit. It is a measure to check internal control and financial reporting of the company. | |This entails a plan of action and systematic steps to consistently audit a business. The audit is an objective process of evaluating the | |statements
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managing a group of differentiated businesses competing in different product market. This lesson addresses the following issues: 1. What is the company’s overall direction? (Stability? Growth? Or retrenchment?) 2. What businesses should a corporation compete in? (Portfolio analysis/ management) 3. How can these businesses can be managed so they create “synergy” – that is more value by working together than if they were freestanding units The Corporate Level Strategies A. Stability Strategy:
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often, however, firms find it difficult to sustain growth because they become risk averse and, as a result, opt for incremental product and service improvements instead of major initiatives, according to a study by a Wharton marketing professor. George S. Day, who also serves as co-director of Wharton’s Mack Center for Technological Innovation, says companies can avoid lackluster growth by better understanding the risks inherent in different levels of innovation and achieving a balance between —
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Pioneer Petroleum Cases Analysis The Problem: Pioneer Petroleum Corporation (PPC) has two major problems that are interfering with the goal of the firm to maximize shareholder wealth. The first is that PPC has been calculating their weighted average cost of capital incorrectly, by incorrectly calculating their after tax cost of debt and their cost of equity. This miscalculation has subjected PPC to more risk and has hurt the company’s ability to make appropriate investment decisions. This has
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Strategic Initiative Paper: Starbucks Starbucks Corporation (Starbucks) is known as one of the selling leaders of roasted and specialty coffee in the retail industry. Starbucks has been focusing on creating a detailed strategic and financial plan that will aid the company in surpassing its competitors. The purpose of this paper is to investigate Starbuck’s actions upon creation of strategic and financial plans, the strategic initiatives associated with this plans, and the impact initiatives have
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Each business or corporation has an evaluation of performance of the company to see how the business is functioning and the investments. Evaluation of performance includes the company assets, profit, cash flow, investments, and sales. Calculating each one for a business tells the managers of the company what direction to go and what needs to take place of becoming a successful and functional business. Evaluating the company comes with different risk to take on when running a corporation, so the company
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Cost of Equity Equity market risk premium of 5% is reasonable. According to the Exhibit 6, the U.S. stock return minus Treasury bond yields for each period varies. Since each period has different standard error, it will be better to take the weighted average of the data, then EMRP is approximately 5.9% or lets say 6.0%. Comparing to the EMRP that Midland would use in the calculation of WACC which is 5%, the historical data reflects a higher EMRP. But from the market risk premium survey results, we see
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future sustainably of the business. Business Structure There are several types of business structure but choosing the most appropriate one would depend on your business market, target market, business plans, visions, objectives, goals. The four main types of structures are sole proprietorship, partnership, corporation and limited liability company (LLC). Sole proprietorship is the most basic, inexpensive and hassle free structure to establish. In this structure one individual is responsible for
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Effects of Operating Leverage on Business Risk: (if all other things held constant) the higher a firm’s Operating Leverage, the higher its business risk. This is because in lower economical cycles, the firm will still be incurring its fixed cost. However, remember that higher risk usually commands for a higher return on investment. Financial leverage is the use of debt to finance the activities of a business. Financial risk is the additional risk put on the shareholder when management decides
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I: Dixon Corporation’s problem In October 1979, Dixon Corporation (Dixon), a specialty chemical company in US, is considering the purchase of a sodium chlorate plant located in Collinsville, Alabama. The Collinsville plant is now managed by American Chemical Corporation (American), one of largest diversified chemical companies in US. Acquisition of the Collinsville plant fit well with Dixon’s strategy of supplying chemicals to paper and pulp industry. Dixon and American had reached an agreement
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