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the money!” said Cuba Gooding Jr’s in movie “Jerry Maguire”. That’s what financial statements do. It shows where a company’s money came from, where it went, and where it is now. There are four main financial statements - balance sheets, income statements, cash flow statements and statements of shareholders’ equity. * Balance sheets show what a company owns and what it owes at a fixed point in time. * Income statements show how much money a company made and spent over a period of time.
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From Sheet of Accounting Theory Difficulties in Segment Reporting * Base of Segmentation: in case of complex business, it’s difficult to select a base for organization as well as difficult to compare. * Allocation of Common Costs: Common costs are likely to be allocated, bringing segment information into question * Pricing Inter-segment Transaction: No specific method for inter-segment pricing, different method use for cost, cost plus market price and negotiable price. * Costs of
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Marriott have developed a financial strategy with 4 main decisions. Manage rather than own hotel assets. The first measure is simply to be more involved in the management of theirs hotel. It means for the company to have more control on how the money is used but also to have more responsibilities concerning the employees and especially the customers. The company is able to monitor and control its resources and expenses. By having more control, Marriott can try to improve its efficiency and its
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30% per year. What is the Black-Scholes value of the option you have identified in part a? Step 1: find d1 and d2 d_1=(ln(50/50)+(0.03+〖0.30〗^2/2)×8/12)/(0.30×√(8/12))=0.2041 d_2=0.2041-0.30×√(8/12)=-0.0408 Step 2: find N(d1) and N(d2) Using the cumulative normal table obtain N(d1) = N(0.20) = 0.5793 and N(d2) = N(-0.04) = 0.4841 Step 3: calculate the call option value c=$50×0.5793-$50×e^(-0.03×(8/12) )×0.4841=$5.2393 (d) What is the time value of the option you have identified in part
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date. Some describe the balance sheet as a "snapshot" of the company's financial position at a point in time. For example, the amounts reported on a balance sheet dated December 31, 2011 reflect that instant when all the transactions through December 31 have been recorded. (2012, Averkamp) Because the balance sheet informs the reader of a company's financial position as of one moment in time, it allows someone—like a creditor—to see what a company owns as well as what it owes to other parties as
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Present Value of a Single Cash Flow Where: cash flow at time t. time periods. the effective rate over a single period. Not to be reproduced without the permission of the authors. 1-2 Calculation Example: Present Value of a Single Cash Flow Question: What is the present value of $100 received in 5 years when interest rates are 8% pa? Answer: Not to be reproduced without the permission of the authors. 1-3 Future Value of a Single Cash Flow Where: cash flow now. time periods
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Objective: maximize firm value, increase stock price Decisions: Investment, Working Capital, Financing, Distribution Principal (shareholders) Agent (Manager): Career Concern, Empire Building, Private Benefits of Control, Shirking Current Assets – Current Liabilities = Net working capital (Current = less than a year) Financial leverage: use of debt to acquire assets Average tax rate: total taxes paid / total taxable income. Marginal tax rate: amount of tax payable on the next dollar earned
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traded item on the global market, and gold is the most sought after and valued metal that always holds its value. Prior to 1931 gold was used as a form of back up for the value of currency. Many nations used gold as the foundation for their currency. However, now world currencies are no longer backed by gold reserves. Currencies are traded globally and now hold their strength in their trading value, yet gold is still a commodity that is traded in its own market. The gold standard was abandoned, first
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has been further spread by the bad labor market of 09-10 o Inflation rate • High inflation means that prices on average are rising rapidly while a low inflation rate means that prices on average are rising slowly. 0 means essentially the same over time. Retired people lose the most because what they have saved buy less. High inflation helps those who have borrowed. Creates uncertainty o Productivity growth • The aggregate output per hour of work that a nation produces in total goods and services
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