Question 1
Chapter 6 Question 15 Janicek Corp. is experiencing rapid growth. Dividends are expected to grow at 27% per year during the next three years, 17% over the following year, and then 7% per year indefinitely. The required return on this stock is 12%, and the stock currently sells for $65 per share. What is the projected dividend for the coming year? Question 25 Consider Pacific Energy Company and U.S. Bluechips, Inc., both of which reported earnings of $1,100,000. Without new projects, both firms will continue to generate earnings of $1,100,000 in perpetuity. Assume that all earnings are paid as dividends and that both firms require a 12% rate of return (ROI). (a) What is the current PE ratio for each company? (b) Pacific Energy Company has a new project that will generate additional earnings of $220,000 each year in perpetuity. Calculate the new PE ratio of the company. (c) U.S. Bluechips has a new project that will increase earnings by $440,000 in perpetuity. Calculate the new PE ratio for the firm. Chapter 7 Question 7 Pluto Planet, Inc., has a project with the following cash flows. YEAR CASH FLOWS ($) 0 -10,500 1 6,300 2 4,900 3 2,400 The company evaluates all projects by applying the IRR rule. If the appropriate interest rate is 9%, should the company accept the project? Question 10 Suppose the following two independent investment opportunities are available to Scott, Inc. The appropriate discount rate is 10%. YEAR PROJECT ALPHA PROJECT BETA 0 -1,200 -2,600 1 500 900 2 900 2,400 3 800 1,300 (a)Compute the profitability indexes for each of the two projects. (b) Which project(s) should the company accept based on the profitability index rule? Question 16 Mario Brothers, a game manufacturer, has a new idea for an adventure game. It can either market the game as a traditional board game or as an interactive CD-ROM, but not both. Consider the following cash flows of the two mutually exclusive projects for Mario Brothers. Assume the discount rate for Mario Brothers is 10%. YEAR BOARD GAME CD-ROM 0 -$320,000 -$550,000 1 $240,000 $310,000 2 $130,000 $280,000 3 $75,000 $195,000 (a) Based on the payback period rule, which project should be chosen? (b) Based on the NPV, which project should be chosen? (c) Based on the IRR, which project should be chosen? (d) Based on the incremental IRR, which project should be chosen?
Question 2
In this unit, you learned about the doctrine of respondeat superior, which states that an employer may be held liable for the actions of his/her employees. For this assignment, you will choose a peer-reviewed article to review regarding this doctrine as it relates to the healthcare industry. Use the databases within the CSU Online Library, or use another reputable source that contains peer-reviewed articles. The purpose of this assignment is for you to practice reviewing articles that contribute to the industry. The authors of these articles are researchers and professionals who have shared or experimented with ideas that demonstrate potential to improve the industry. As a professional in the industry, it is in your best interest to review the literature and trends. This provides you with the opportunity to read about what was successful and how it was accomplished. Plus, it allows you to analyze what was unsuccessful, how you can improve it or at least how you can avoid repeating the mistakes of others. Use these skills to contribute to research papers and other scholarly writings. If you have not already, hopefully, you will contribute to the industry by publishing an article and sharing with your community of peers. As you read the article you choose for this assignment, consider the following questions: How could the topic of this article apply to your personal or professional life? How could it apply to an organization you have observed? The article you choose must meet the following requirements: ? Be peer reviewed ? Relate to the concepts within this course ? Be at least ten pages in length The writing you submit must meet the following requirements: ? Be at least two full pages in length ? Identify the main topic/question ? Identify the author?s intended audience ? Summarize the article for page one ? Explain how the doctrine of respondeat superior was depicted in your article. Was it discussed in a positive or negative light? ? Explain if it is logical to judge an employer for the actions of an employee? Why or Why not?
Question 3
Q1) Seneca Foods is a regional producer of low-priced private-label snack foods. Seneca contracts with local supermarkets to supply good-tasting packaged snack foods that the retailers sell at significantly lower prices to price-sensitive consumers. Because Seneca?s production costs are low, and it spends no money on advertising and promotion, it can sell its products to retailers at much lower prices than can national-brand snack food companies, such as Frito-Lay. The low purchase prices often allow the retailer to mark this product up and earn a gross margin well above what it earns from brand products, while still keeping and selling price to the consumer well below the price of the brand products. Seneca has recently been approached by several large discount food chains who wish to offer their consumers a high-quality but much lower-priced alternative to the heavily advertised and high-priced national brands. But each discount retailer wants the recipe for the snack foods to be customized to its own tastes. Also, each retailer wants its own name and label on the snack foods it sells. Thus, the retailer, not the manufacturer, would be providing the branding for the private-label product. In addition, the retail chains want their own retailer-branded product to offer a full snack product line, just as the national brands do. Seneca?s managers are intrigued with the potential for quantum growth by becoming the prime producer of retailer-brand snack foods to large, national discount chains. As they contemplated this new opportunity. Dale Williams, the senior marketing manager, proposed that if Seneca enters this business, it can think of even higher growth opportunities. Seneca does not have to sell just to the discount chains that have approached it. Local supermarket chains may also be attracted to the idea of having their own brand of high quality but lower-priced snack products that could compete with the national brands, not just be a low-priced alternative for highly price-sensitive consumers. Perhaps Seneca could launch a marketing effort to regional supermarket chains around the country for a retail-brand snack food product line. Williams noted, however, that the local supermarket chains were not as sophisticated as the national discounters in promoting products under their own brand name. Each supermarket chain likely would need extensive assistance and support to learn how to advertise, merchandise, and promote the store-brand products to be competitive with the national-brand products. John Thompson, director of logistics for Seneca Foods, noted another issue. The national-brand producers used their own salespeople to deliver their products directly to the retailer?s store and even stocked their products on the retailer?s shelves. Seneca, in contrast, delivered to the retailer?s warehouse or distribution center, leaving the retailer to move the product to the shelves of its various retail outlets. The national producers were trying to dissuade the large discount chains from following their proposed private-label (retailer-brand) strategy by showing them studies that the apparently higher margins they would earn on the private label would be eaten away by much higher warehousing, distribution, and stocking costs for these products. Heather Gerald, the controller of Seneca, was concerned with the new initiatives. She felt that Seneca?s current success was due to its focus. It currently offered a relatively narrow range of products aimed at the high-volume snack food segments to supermarket chains in its local region. Seneca got good terms from its relatively few supplier because of the high volume of business it did with each of them. Also, the existing production processes were efficient for the products and product range currently produced. She feared that customizing products for each discount or supermarket retailer, plus adding additional products so that they could offer a full product line, would cause problems with both suppliers and the production process. She also wondered about the cost of providing new services, such as consulting and promtoins, to the supermarket chains and of developing some of the new items required for the proposed full product line strategy. Heather was attracted to the growth prospects offered by becoming the preferred supplier to major discount and supermarket chains. But she was not as optimistic as Dale Williams that these retailers truly believed that selling their own private-label foods would be more profitable than selling the national brands. Perhaps they were only using Seneca as a negotiating ploy, threatening to turn to private labels to increase their power in setting terms with the national manufacturers. Once production geared up, how much volume would these retailers provide to Seneca? How could Seneca convince the large retailers about the profitability associated with the new private-label strategy? Gerald knew that Seneca?s existing cost systems were adequate for their current strategy. Most expenses were related to materials and machine processing, and these costs were well assigned to products with the conventional standard costing system. But the new strategy would seem to involve a lot more spending in areas other than purchasing materials and running machines. She wished she knew how to provide input into the strategic deliberations now under way at Seneca, but she didn?t know how to quantify all the effects of the proposed strategy. REQUIRED: a) How can activity-based costing help Heather Gerald assess the attractiveness of the proposed policy? b) Assuming that Seneca starts to supply new customers-large discounters and supermarkets outisde its local region-what ABC systems would be helpful to guide the profitability of the strategy and assist Seneca managers in making decisions? *NOTE: Make sure to think about the totality of Seneca?s operations, including its relationships with both supplier and customers. (i) Discuss how ABC can be used to manage and controls costs for Seneca's manufacturing operations. The ?whale curve? and some of those concepts can apply to this company. (ii) ABC can be used to measure profitability: internal to the companyand external by modeling the customer. (iii) Finally, use ABC to manage the company?s relationship with suppliers.
Question 4
The facts for your Tax Research Assignment III are as follows: Joe Bon Joni is a self-employed rock star who is and hires you as his new CPA. He explains that in 2013 he spent $10,000 on special ?flashy? clothes and outfits for his rock concerts. Joe would like to deduct the cost of these clothes as work-related because the clothes are not acceptable to his sense of fashion. He would like to know under what circumstances he can deduct the cost of these work clothes. Please research the relevant tax law and write Joe a brief memo of no more than two pages, in which you communicate the results of your research. Use the format for communicating research findings discussed on pages 20-22 of chapter 2 of your textbook for your memorandum. Identify relevant statutory, regulatory, and judicial authorities and discuss how these authorities affect your conclusion concerning the deductibility of Joe?s clothing expenses. He likes to do his own reading of the tax law, so he would like you to provide him with the relevant citations in your memo. If you do a really good job, he may send his rock star buddies your way to do their taxes ? that could help you earn a really good living! Your research assignment will be graded using the following criteria: 1. Recognition of the important facts and issues 2. Correct conclusion 3. Clarity of writing 4. Proper use of relevant sources to support your conclusion and analysis. 5. Proper citation of relevant sources 6. Proper format, spelling & grammar
Question 5
Town of Jupiter 2009 Comprehensive Annual Financial Report General Instructions Note: for some of these questions, you will find helpful information in the Notes to the Financial Statements, Combining and Individual Fund Financial Statements, and the Statistical Section. Review all of these sections to find the information you need. Specific Requirements 1. Internal service funds a. Does the Town of Jupiter use internal service funds? Identify internal service funds used by the Town of Jupiter, and describe what transactions are accounted for in EACH of those funds. b. Explain where internal service funds are reported in the government-wide financial statements and where they are reported in the fund financial statements. 2. Enterprise funds a. Indentify the MAJOR enterprise funds used by the Town of Jupiter, and describe what transactions are accounted for in EACH of those funds. b. Identify the NONMAJOR enterprise funds used by the Town of Jupiter, and describe what transactions are accounted for in EACH of those funds. c. Looking at the proprietary fund statements, answer the following questions: i. How does the enterprise fund financial statement presentation differ from the government-wide presentation of enterprise funds? ii. Which major enterprise fund has the largest amount of Net Assets, and what is the amount? iii. For the EACH Enterprise Fund, for what purposes are Net Assets Restricted and what is the amount of each restriction? iv. For all enterprise funds in total, what are the three largest operating revenues and what is the amount for each? v. For EACH major enterprise fund, what is the operating income (loss)? vi. For EACH major enterprise fund, what is the net cash provided by (used for) operating activities? 3. Fiduciary funds a. List each of The Town of Jupiter?s fiduciary funds and explain what is accounted for in EACH fiduciary fund? b. List the TWO largest additions to each fiduciary fund and explain the deductions to each fiduciary fund. 4. Review the Statistical Section at the end of the CAFR and answer the following questions: a. How would you describe the trend in Net Expense for Governmental Activities over the six-year period from Fiscal Year 2004 through Fiscal Year 2009? Is the trend favorable or unfavorable to the Town of Jupiter? b. Compare amounts for Net Expense to the amounts for General Revenues and Other Changes in Net Assets for Governmental Activities over the six-year period from Fiscal Year 2004 through Fiscal Year 2009. Given what you see in these comparisons, is The Town of Jupiter doing a good job of keeping expenses in line with revenues? Are the revenue amounts reasonable given the expenses being incurred by The Town of Jupiter? c. Between FY 2000 and FY 2009, what was the percentage increase in the net assessed value of property? d. For FY 2009, what was the DIRECT tax rate used to calculate the property taxes levied by the Town of Jupiter? How does that rate compare to the rate in FY 2000? e. Who were the four largest principal property taxpayers in the Town of Jupiter in FY 2009? f. For FY 2009, what percent of the tax levy was not collected as of September 30, 2009? g. How would you describe the trend in Outstanding Debt per capita and as a percentage of personal income? h. Identify any Overlapping Debt and briefly explain each. i. What was the per capita personal income in The Town of Jupiter during FY 2005? j. Who were the four largest employers in the town in FY 2009? (2 points) k. Identify the Function/Program with the largest change in number of employees from FY 2000 through FY 2009 l. How would you describe the trend in building permits issued by the Town of Jupiter from FY 2002 through FY 2009? m. How would you describe the trend in average daily water consumption in the Town of Jupiter from FY 2002 through FY 2009?),ok,You did not answer some of the questions as requested. For example, a. Does the Town of Jupiter use internal service funds? Identify internal service funds used by the Town of Jupiter, and describe what transactions are accounted for in EACH of those funds. Internal balances brings into interfund receivables and payables. some of the answers are incomplete, some of the questions ask to list or identity the Funds and describe them.
