Question 1
For Michael I. Please see attachment, it is clearer. White Industries started their operations on January 1, Year 1 and recorded $400,000 in warranty expense during the year. Warranty expense was the only difference between the company's pretax financial income and its tax return income of $900,000. White will be required to pay these warranties at a rate of $100,000 per year beginning in Year 2. Although White fully expects to earn in excess of $100,000 in Year 2 and Year 3, the company believes it is more likely than not that it will incur a loss after Year 3. The enacted tax rate is 25% in current and future periods. What will White record as its income tax expense in Year 1? A. $100,000 B. $125,000 C. $175,000 D. $225,000 Erika?s Surf Shop had taxable income in Year 2 of $500,000 and pretax financial income of $600,000. The company had a cumulative $200,000 difference between its taxable income and pretax financial statement income at December 31, Year 1. These differences were solely related to accelerated depreciation methods used for income tax purposes. The enacted tax rate increased to 30 percent in Year 2 compared to an enacted rate of 20 percent in the prior year. At December 31, Year 2, the company would record a deferred tax expense of: A. $40,000 B. $50,000 C. $90,000 D. $150,000 For the year ended December 31, Laramie Industries has a depreciation expense per its tax return greater than its financial statement tax expense, and had recorded warranty expense (associated with a one-year guarantee on its products) in its financial statements. Pretax income is less than tax return income as a result of these reconciling items. As a result of these transactions, Laramie will display: A. A current deferred tax asset and noncurrent deferred tax liability B. A noncurrent deferred tax asset and a current deferred tax liability C. A net current tax asset D. A net noncurrent tax asset
Question 2
Format: The report is to be 7-to-8 pages, double-spaced with 1-inch margins, 10-to-12 point type, and posted as rtf or Word document. Use APA format for references. The cover page, references, and appendixes are not part of the page count. The organization of the report is to include: Introduction: A brief, one-to-two paragraph introduction that succinctly states the issues or problems you will discuss in the report. Do not restate the facts presented in the case. Assume that your audience knows the facts of the case. What are the major issues and management problems challenging Chabros International Group? Choose two (2) of the following: Strategy/mode of entry; organizational structure; marketing strategy; sourcing strategies/logistics; international and local staffing policy. What motivated Chami to expand Chabros? operations internationally? What strategy did he follow: International, multinational, global or transnational? What strategies/options were available to Chabros to overcome the financial crisis? Which strategy/option would you recommend? Why? If you decide to follow a market development growth strategy, into which new country would you expand? Rank the candidate countries. Explain how you derived your ranking. If you decide to follow a market penetration growth strategy, which country where Chabros is already present would you further penetrate? Would Morocco be a good country to expand into? Conclusions and Lessons Learned: What insights does this case give you into the connection between the cultural context and making business decisions and the factors that influence a country?s business practices? What can the company you chose for your Team Report #2 learn from this case study on the issues you identified? Are there examples of ?best practice? you can point to from case studies discussed in Discussions this semester?
Question 3
1. How would you evaluate the capital budgeting method used historically by AES? What's good and bad about it? 2. If Venerus implements the suggested methodology, what would be the range of discount rates that AES would use around the world? 3. Does this make sense as a way to do capital budgeting? 4. What is the value of the Pakistan project using the cost of capital derived from the new methodology? If this project was located in the U.S., what would its value be? 5. How does the adjusted cost of capital for the Pakistan project reflect the probabilities of real events? What does the discount rate adjustment imply about expectations for the project because it is located in Pakistan and not the U.S.?,i have attached the case study too..thank you for your help..really appreciated..,actually i need to do paper on "globalizing the cost of capital and capital budegeting on AES" and the page limit is 5-6 pages.,Can you please do a paper for my case of "globalizing the cost of capital and capital budegeting on AES' where the page limit is 5-6 pages or u can do one or two pages more..I would be really greatful. Could not figure out how to do paper on this case study..' thanks
Question 4
Problem 9-9: Schedules of Expected Cash collections and Disbursements You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the company?s operations: a. The cash balance on December 1 is $40,000. b. Actual sales for October and November and expected sales for December are as follows October November December Cash sales $ 65,000.00 $ 70,000.00 $ 83,000.00 Sales on account $ 400,000.00 $ 525,000.00 $ 600,000.00 Sales on accounts are collected over a three-month period as follows: 20% collected in the month sales, 60% collected in the month following sales, and 18% collected in the second month following sale. The remaining 2% is uncollectible. c. Purchases of inventory will total $280,000 for December. Thirty percent of a month?s inventory purchases are paid during the month of purchase. The accounts payable remaining from November?s inventory purchases total $161,000, all of which will be paid in December. d. Selling and administrative expenses are budgeted at $430,000 for December. Of this amount, $50,000 is for depreciation. e. A new web server for the Marketing Department costing $76,000 will be purchased for cash during December, and dividends totaling $9,000 will be paid during the month. f. The company maintains a minimum cash balance of $20,000. An open line of credit is available from the company?s bank to bolster the cash position as needed. Required: 1. Prepare a schedule of expected cash collections for December. 2. Prepare a schedule of expected cash disbursements for merchandise purchases for December. 3. Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month.
Question 5
Problem Inputs: Size of planned debt offering = $10,000,000 Anticipated rate on debt offering = 11% Maturity of planned debt offering = 20 Number of months until debt offering = 7 Settle price on futures contract (% of par) = 95.53125% Maturity of bond underlying futures contract = 20 Coupon rate on bond underlying futures contract = 6% Size of futures contract (dollars) = $100,000 Create a hedge with the futures contract for Zinn Company?s planned June debt offering of $10 million. What is the implied yield on the bond underlying the future?s contract? Value of each T-bond futures contract = Number of contracts needed for hedge = rounding = Value of contracts in hedge = Implied semi-annual yield = Implied annual yield = b. Suppose interest rates fall by 300 basis points. What is the dollar savings from issuing the debt at the new interest rate? What is the dollar change in value of the futures position? What is the total dollar value change of the hedged position? Change in interest rate on debt offering (basis points) = -300 New interest rate on debt = Value of issuing at new rate interest = Dollar value savings or cost from issuing debt at the new rate = New yield on futures contract = New value of each futures contract Value of all fo the futures contract at new yield = Dollar change in value of the futures position = Total dollar value change of hedge = c. Create a graph showing the effectiveness of the hedge if the change in interest rates, in basis points, is: -300, -200, -100, 0, 100, 200, or 300. Show the dollar cost (or savings) from issuing the debt at the new interest rates, the dollar change in value of the futures position, and the total dollar value change. Change in rate Dollar change in cost/savings of issue Dollar change in value of futures position Total dollar value change of hedge Base -300 -300 -200 -100 0 100 200 300 What is this? By Business Expert Manal Elkhoshkhany, MBA Purchase Cost Now $2.19 CAD (was ~$3.99) This answer includes Plain text response Attached file(s): Brainmass - 317191.xls You can trust BrainMass.com Your info is private and secure The web's best academic assistance Our users get better grades,The Zinn company plans to issue $10,000,000 of 20-year bonds in June to help finance a new research and development laboratory. The bonds will pay interest semiannually. It is now November, and the current cost of debt to the high-risk biotech company is 11%. However, the firm's financial manager is concerned that interest rates will climb even higher in coming months. The following data are available: Futures price: Treasury Bonds- $100,000; pts- 32nds of 100 Delivery mo Open High Low Settle Change Open Interest December 94-28 95-13 94-22 95-05 +7 591,944 Mar 96-03 96-03 95-13 95-25 +8 120,353 June 95-03 95-17 95-03 95-17 +8 13,597
