Question 1
all three pages are the same, i just wanted to scan the clearest page possible. Stock Valuation at Ragan Engines (Chapter 9 in textbook, p.298) Note: You may use either Excel or Word for this case. Please provide a typed case. Also, please note that while the substance of your report is key, the organization and presentation of the report are also important. Concisely address the 5 questions on pages 298 and show your work (e.g., please show the formulas you are using and the numbers used in the formulas). Hints: Use the formula, r g D P ? = 1 0 , where D1 = D0(1+g) You need to estimate the growth rate, so first solve for g using the formula discussed in class. That is, g = Retention ratio x ROE In question #2, when calculating the industry average EPS, use the EPS figures without accounting write-offs to get a more representative figure. Also, you can find the industry growth rate using the same growth formula shown above (using the industry retention ratio and industry ROE). Note that, when finding the estimated stock price in #2, you will first need to find the present value of the early stream of high growth dividends. Then use the constant growth rate formula (i.e., growing perpetuity formula) to find the present value of the later dividends which grow at the industry average growth rate (assumed to be a constant growth rate). Refer to the non-constant growth example in the chapter 9 powerpoints. For question #4, you must calculate the percentage of the stock?s value that is attributable to growth opportunities. To do this, first calculate the value of the firm?s stock if there was no growth, i.e., a perpetuity, with g = 0. Then compare this value to the stock value you calculated earlier in question #2 to get the proportion of the stock?s value not attributable to growth opportunities. The rest would be the proportion that is due to growth opportunities. Follow the assumptions in question #2, and use the industry average required return. For question #5, use the growth rate formula (g = ROE x retention ratio) and solve for ROE (using the assumptions from question #2).,Case #1: Stock Valuation at Ragan Engines (Chapter 9 in textbook, p.298) Note: You may use either Excel or Word for this case. Please provide a typed case, one per group. Also, please note that while the substance of your report is key, the organization and presentation of the report are also important. Concisely address the 6 questions on pages 298-299 and show your work (e.g., please show the formulas you are using and the numbers used in the formulas). Hints: Use the formula, r g D P ? = 1 0 , where D1 = D0(1+g) You need to estimate the growth rate, so first solve for g using the formula discussed in class. That is, g = Retention ratio x ROE In question #2, when calculating the industry average EPS, use the EPS figures without accounting write-offs to get a more representative figure. Also, you can find the industry growth rate using the same growth formula shown above (using the industry retention ratio and industry ROE). Note that, when finding the estimated stock price in #2, you will first need to find the present value of the early stream of high growth dividends. Then use the constant growth rate formula (i.e., growing perpetuity formula) to find the present value of the later dividends which grow at the industry average growth rate (assumed to be a constant growth rate). Refer to the non-constant growth example in the chapter 9 powerpoints. For question #4, you must calculate the percentage of the stock?s value that is attributable to growth opportunities. To do this, first calculate the value of the firm?s stock if there was no growth, i.e., a perpetuity, with g = 0. Then compare this value to the stock value you calculated earlier in question #2 to get the proportion of the stock?s value not attributable to growth opportunities. The rest would be the proportion that is due to growth opportunities. Follow the assumptions in question #2, and use the industry average required return. For question #5, use the growth rate formula (g = ROE x retention ratio) and solve for ROE (using the assumptions from question #2).,how is the assignment going? when will it be done?,ok thank you, it is very important to follow the instructions i sent you reguarding the way the questions should be answered and the formulas that should be used.,thank you very much, but i also need you to show how you got each number and its formula.
Question 2
1. ?What great leaders have in common is that each truly knows his or her strengths?? (Rath & Conchie, 2008). List your top five strengths as determined by the StrengthsFinder 2.0. Do you agree with this assessment? Why or why not? For example, which of the five describes you best? Is there one that surprised you? Are you currently in a job that utilizes your strengths? Explain. 2. Re-read the section of Strengths-Based Leadership that addresses the four basic needs of followers. Evaluate yourself on how well you provide each of these to your followers (even better, also ask an employee or a co-worker to evaluate you). Which come easily to you and which do you need to improve on in order to meet your followers? needs? Practically speaking, how can you do this? 3. In the Additional Resources section of the book, strategies for leading in a way that meets followers? four basic needs are presented. (Note: You only need to read the pages that address your top five strengths.) Do any of these suggestions resonate with you? Which strategies do you believe would make the biggest impact if you implemented them at work? 4. According to Rath and Conchie, how are team members typically selected? Why is this problematic? What do leaders need to understand to build an effective team? Use the chart on page 24 (How the 34 themes sort into the four domains of leadership strength) to identify what you bring to a team. For example, do your strengths fall primarily into one category or are they spread out over several? Are you actively and consistently using your strengths on your team? Explain. Is your team balanced (i.e., are all four domains covered or are everyone?s strengths in the same one or two categories)? Discuss. Remember, individuals don?t need to be well-rounded, but teams do. use a 12-point Times New Roman font and single-spacing (with double-spacing between paragraphs). Essay should focus on the questions and concepts listed, while adhering to proper writing mechanics and APA formatting standards. Each essay should be approximately three to five pages long and all sources must be cited using APA format.
Question 3
(Analysis of Alternatives) Assume that Wal-Mart, Inc. has decided to surface and maintain for 10 years a vacant lot next to one of its discount-retail outlets to serve as a parking lot for customers. Management is considering the following bids involving two different qualities of surfacing for a parking area of 12,000 square yards. Bid A: A surface that costs $5.75 per square yard to install. This surface will have to be replaced at the end of 5 years. The annual maintenance cost on this surface is estimated at 25 cents per square yard for each year except the last year of its service. The replacement surface will be similar to the initial surface. Bid B: A surface that costs $10.50 per square yard to install. This surface has a probable useful life of 10 years and will require annual maintenance in each year except the last year, at an estimated cost of 9 cents per square yard. Calculate the present value of outflows for Bid A & B and then determine which bid should be accepted by Wal-Mart Inc. You may assume that the cost of capital is 9%, that the annual maintenance expenditures are incurred at the end of each year, and that prices are not expected to change during the next 10 years. (Round answers to 2 decimal places, e.g. 250,250.25. Hint: Use tables in text.) Present value of outflows for Bid A xxxx$? Present value of outflows for Bid B xxxx$? What bid should be accepted?
Question 4
The total of the individual customer account balances should equal the balance in accounts receivable, which is the control account master account nominal account contra account Activities between affiliated entities such as subsidiaries must be disclosed in the financial statements of a corporation as segment analysis significant relationships related-party transactions contingent activities Under international accounting standards, liabilities and owners' equity on the balance sheet usually appear in which order? (Points: 4) capital, noncurrent liabilities, and current liabilities current liabilities, noncurrent liabilities, and capital capital, current liabilities, and noncurrent liabilities noncurrent liabilities, current liabilities, and capital The SEC established integrated disclosures to (Points: 4) establish full disclosure demonstrate its legal authority to establish GAAP satisfy the form 10-K disclosure requirements control Management?s Discussion and Analysis Which of the following is not an acceptable way of reporting a company's comprehensive income? (Points: 4) on the face of the income statement in a separate statement of comprehensive income in the statement of changes in stockholders' equity in the statement of retained earnings The statement of cash flows is least likely to help external users to assess (Points: 4) a company's ability to generate positive future cash flows the amount of a company's future accrual-based sales revenue a company's ability to meet its obligations and pay dividends a company's need for external financing # 32. The following information relates to the Smith Company: 2010 cash dividends declared $400 unadjusted (reported) retained earnings, January 1, 2010 ? 2010 net income $480 error in 2009--understatement of ending inventory: error found in 2010 $150 unadjusted (reported) retained earnings, December 31, 2010 $1,400 what is the unadjusted January 1, 2010, balance in retained earnings? $1,170, $1,320, $1,470, $1,630. The Philip Company had the following information available for the fiscal year ended December 31, 2010: Net sales $1,600,000 Cost of goods sold 1,200,000 Merchandise inventory: January 1, 2010 200,000 December 31, 2010 400,000 Philip's inventory turnover for 2010 was 3 times 4 times 5.33 times 6 times Monroe Company reported the following information for the year ended December 31, 2010: Net income $600,000 Preferred dividends declared and paid 60,000 Common dividends declared and paid 80,000 Average common shares outstanding 90,000 Ending market price per share 40 Net sales 4,100,000 Monroe's earnings per share for 2010 was $6.67 $6.00 $5.11 $0.15 Morgan Company reported the following information for the year ended December 31, 2010: Net income $ 800,000 Preferred dividends declared and paid 100,000 Common dividends declared and paid 160,000 Average common shares outstanding 140,000 Ending market price per share 30 Net sales 7,400,000 Morgan's 2010 price/earnings ratio was 0.17 times 5.25 times 6.00 times 4.67 times,I do not see the answers to the questions
Question 5
A depreciable asset has an estimated 10 percent residual value. At the end of the assets estimated useful life, the accumulated depreciation would equal the original cost of the asset under which of the following depreciation methods? Answer Double-Declining Balance: Yes, Units-of-Production: No Double-Declining Balance: Yes, Units-of-Production: Yes Double-Declining Balance: No, Units-of-Production: Yes Double-Declining Balance: No, Units-of-Production: No Cruiser Video was involved in the following transactions during August concerning DVD players:August 1Beginning inventory10 @ $60,August 10Purchased 5 @ $64,August 15Sold 12 for $80 per unit,August 28Purchased 5 @ $66,Calculate the ending inventory of DVDs for Cruiser Video in August assuming the use of the LIFO method under a perpetual inventory system. Answer $522 $514 $510 $500 Sigma Corporation exchanged an asset with a book value of $10,000 and paid $1,000 in cash for a another asset from Phi Corporation with a book value of $10,300. The fair value of the given asset was $9,500 and the acquired asset was $10,500. Calculate the cost to be used to record the new asset for Sigma. Answer $11,000 $8,500 $9,500 $10,500 A firm experiencing inflation and increasing inventory will have the highest net income under the Answer average cost method. first-in, first-out method. last-in, last-out method. Cannot be determined without additional information A firm experiencing deflation and increasing inventory will have the highest cost of sales under the Answer average cost method. first-in, first-out method. last-in, last-out method. Cannot be determined without additional information Assume that on January 1, 2005, Weber Company issues bonds with a face value of $300,000 that pay 6 percent interest, semiannually (3 percent per period) and mature in 10 years. Assume that the market interest rate at the date of issuance is 10 percent (5 percent per semiannual period). What is the issue price of the bond? Answer $300,000 $226,265 $225,227 $210,111 On January 1, 2003, ABC Co. purchased a computer system with a four-year useful life and no residual value for $200,000. The machine was depreciated by an accelerated method for book and tax purposes. The machine s carrying amount was $80,000 on December 31, 2004. On January 1, 2005, ABC changed to the straight-line method for financial statement purposes. ABC s income tax rate is 30 percent. On its 2005 income statement, what amount should ABC report as the cumulative effect of this change? Answer $20,000 $14,000 $6,000 $0 Determine the second year depreciation for an asset purchased at the beginning of the first year for $100,000. Assume the asset has a 5-year useful life and a residual value of $10,000. Use the double-declining-balance method. Answer $18,000 $16,000 $24,000 $25,600 Superior Camera Shop began using the dollar-value LIFO method in 2006 when its ending inventory was costed at $50,000. The 2007 ending inventory at year-end prices was $54,000. Calculate Superior Camera Shop s ending inventory assuming 109 percent is an appropriate price index. Answer $54,000 $49,541 $49,500 $46,000 Assuming a company is using a periodic inventory system, when is it not an appropriate time to use the gross profit method of estimating the cost of inventory? Answer For the annual report For an interim balance sheet For a potential merger To determine a fire loss HCI, Inc. understated its ending inventory by $6,000 in 2006. Assume HCI, Inc. has a 25 percent income tax rate. Which of the following statements about the financial reports of HCI, Inc. for 2006 is correct? Answer Ending inventory will be overstated by $4,500. Ending inventory will be understated by $4,500. Cost of sales will be overstated by $1,500. Net income will be understated by $4,500. In an exchange of assets, Junger Co. received equipment with a fair value equal to the carrying amount of the equipment given up. Junger also contributed cash equal to 10% of the fair value of the exchange. If the exchange is not considered to have commercial substance, Junger should recognize -A loss equal to the cash (boot) given up. -A loss determined by the proportion of cash paid to the total transaction value. -A gain determined by the proportion of cash paid to the total transaction value. -Neither gain nor loss
