Question 1
Which of the following is NOT a key element in strategic planning as it is described in the text? a. The mission statement. b. The statement of the corporation?s scope. c. The statement of cash flows. d. The statement of corporate objectives. e. The operating plan. . Which of the following assumptions is embodied in the AFN formula? a. All balance sheet accounts are tied directly to sales. b. Accounts payable and accruals are tied directly to sales. c. Common stock and long-term debt are tied directly to sales. d. Fixed assets, but not current assets, are tied directly to sales. e. Last year?s total assets were not optimal for last year?s sales. . Which of the following is NOT one of the steps taken in the financial planning process? a. Assumptions are made about future levels of sales, costs, and interest rates for use in the forecast. b. The entire financial plan is reexamined, assumptions are reviewed, and the management team considers how additiional changes in operations might improve results. c. Projected ratios are calculated and analyzed. d. Develop a set of projected financial statements. e. Consult with key competitors about the optimal set of prices to charge, i.e., the prices that will maximize profits for our firm and its competitors. A company expects sales to increase during the coming year, and it is using the AFN equation to forecast the additional capital that it must raise. Which of the following conditions would cause the AFN to increase? a. The company previously thought its fixed assets were being operated at full capacity, but now it learns that it actually has excess capacity. b. The company increases its dividend payout ratio. c. The company begins to pay employees monthly rather than weekly. d. The company?s profit margin increases. e. The company decides to stop taking discounts on purchased materials. Which of the following statements is CORRECT? a. Perhaps the most important step when developing forecasted financial statements is to determine the breakdown of common equity between common stock and retained earnings. b. The first, and perhaps the most critical, step in forecasting financial requirements is to forecast future sales. c. Forecasted financial statements, as discussed in the text, are used primarily as a part of the managerial compensation program, where management?s historical performance is evaluated. d. The capital intensity ratio gives us an idea of the physical condition of the firm?s fixed assets. e. The AFN equation produces more accurate forecasts than the forecasted financial statement method, especially if fixed assets are lumpy and economies of scale exist. Which of the following statements is CORRECT? a. Since accounts payable and accrued liabilities must eventually be paid off, as these accounts increase, AFN as calculated by the AFN equation must also increase. b. Suppose a firm is operating its fixed assets at below 100% of capacity, but it has no excess current assets. Based on the AFN equation, its AFN will be larger than if it had been operating with excess capacity in both fixed and current assets. c. If a firm retains all of its earnings, then it cannot require any additional funds to support sales growth. d. Additional funds needed (AFN) are typically raised using a combination of notes payable, long-term debt, and common stock. Such funds are non-spontaneous in the sense that they require explicit financing decisions to obtain them. e. If a firm has a positive free cash flow, then it must have either a zero or a negative AFN. Which of the following statements is CORRECT? a. Any forecast of financial requirements involves determining how much money the firm will need, and this need is determined by adding together increases in assets and spontaneous liabilities and then subtracting operating income. b. The AFN equation for forecasting funds requirements requires only a forecast of the firm?s balance sheet. Although a forecasted income statement may help clarify the results, income statement data are not essential because funds needed relate only to the balance sheet. c. Dividends are paid with cash taken from the accumulated retained earnings account, hence dividend policy does not affect the AFN forecast. d. A negative AFN indicates that retained earnings and spontaneous capital are far more than sufficient to finance the additional assets needed. e. If assets and spontaneously generated liabilities are not projected to grow at the same rate as sales, then the AFN method will provide more accurate forecasts than the projected financial statement method. Which of the following statements is CORRECT? a. The sustainable growth rate is the maximum achievable growth rate without the firm having to raise external funds. In other words, it is the growth rate at which the firm's AFN equals zero. b. If a firm?s assets are growing at a positive rate, but its retained earnings are not increasing, then it would be impossible for the firm?s AFN to be negative. c. If a firm increases its dividend payout ratio in anticipation of higher earnings, but sales and earnings actually decrease, then the firm?s actual AFN must, mathematically, exceed the previously calculated AFN. d. Higher sales usually require higher asset levels, and this leads to what we call AFN. However, the AFN will be zero if the firm chooses to retain all of its profits, i.e., to have a zero dividend payout ratio. e. Dividend policy does not affect the requirement for external funds based on the AFN equation. Which of the following statements is CORRECT? a. When we use the AFN equation, we assume that the ratios of assets and liabilities to sales (A*0/S0 and L*0/S0) vary from year to year in a stable, predictable manner. b. When fixed assets are added in large, discrete units as a company grows, the assumption of constant ratios is more appropriate than if assets are relatively small and can be added in small increments as sales grow. c. Firms whose fixed assets are ?lumpy? frequently have excess capacity, and this should be accounted for in the financial forecasting process. d. For a firm that uses lumpy assets, it is impossible to have small increases in sales without expanding fixed assets. e. Regression techniques cannot be used in situations where excess capacity or economies of scale exist. Last year Wei Guan Inc. had $425 million of sales, and it had $270 million of fixed assets that were used at 65% of capacity. In millions, by how much could Wei Guan's sales increase before it is required to increase its fixed assets? a. $265.46 b. $194.52 c. $256.31 d. $201.38 e. $228.85 Last year Handorf-Zhu Inc. had $850 million of sales, and it had $425 million of fixed assets that were used at only 80% of capacity. What is the maximum sales growth rate the company could achieve before it had to increase its fixed assets? a. 22.25% b. 27.75% c. 23.25% d. 27.00% e. 25.00% Fairchild Garden Supply expects $600 million of sales this year, and it forecasts a 15% increase for next year. The CFO uses this equation to forecast inventory requirements at different levels of sales: Inventories = $30.2 + 0.25(Sales). All dollars are in millions. What is the projected inventory turnover ratio for the coming year? a. 2.76 b. 2.79 c. 2.59 d. 4.05 e. 3.40 Clayton Industries is planning its operations for next year, and Ronnie Clayton, the CEO, wants you to forecast the firm's additional funds needed (AFN). Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Dollars are in millions. Last yr's sales = S0 $350 Last yr's accounts payable $40 Sales growth rate = g 30% Last yr's notes payable $50 Last yr's total assets = A*0 $580 Last yr's accruals $30 Last yr's prof margin = M 5% Target payout ratio 60% a. $120.9 b. $139.6 c. $130.9 d. $143.9 e. $175.6 Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 90%, which the firm's investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions. Last yr's sales = S0 $300.0 Last yr's accounts payable $50.0 Sales growth rate = g 40% Last yr's notes payable $15.0 Last yr's total assets = A0 $500.0 Last yr's accruals $20.0 Last yr's profit margin = M 20.0% Initial payout ratio 10.0% New payout ratio 90% a. $65.9 b. $67.2 c. $68.5 d. $55.1 e. $54.4 Which of the following statements concerning risk management is NOT CORRECT? a. Risk management can reduce the volatility of cash flows, and this decreases the probability of bankruptcy. b. Risk management makes sense for firms directly engaged in activities that involve commodities whose values can be hedged, and it doesn't make much sense for most other firms. c. Companies with volatile earnings pay more taxes than more stable companies due to the treatment of tax credits and the rules governing corporate loss carry-forwards and carry-backs. Therefore, our tax system encourages risk management to stabilize earnings. d. Risk management can reduce the likelihood of low cash flows, and therefore reduce the probability of financial distress. e. Risk management involves identifying events that could have adverse financial consequences and then taking actions to prevent and/or to minimize the damage caused by these events. An investor who sells an option to offset a stock position he/she holds is said to be selling a(n) a. Call option. b. Put option. c. Out-of-the-money option. d. Naked option. e. Covered option. Which of the following statements is CORRECT? a. Put options give investors the right to buy a stock at a certain exercise price before a specified date. b. Call options give investors the right to sell a stock at a certain exercise price before a specified date. c. Options typically sell for less than their exercise value. d. LEAPS are very short-term options that have begun trading on the exchanges in recent years. e. Option holders are not entitled to receive dividends unless they choose to exercise their option. Which of the following statements is most CORRECT? a. One advantage of forward contracts is that they are default free. b. Futures contracts generally trade on an organized exchange and are marked to market daily. c. Goods are never delivered under forward contracts, but are almost always delivered under futures contracts. d. Forward contracts are generally standardized instruments, whereas futures contracts are generally tailor-made for the 2 parties of the contract. e. Essentially there are no differences between forward and futures contracts, except that forward contracts are used only for financial assets while futures contracts are used only for commodities. Which of the following events is likely to decrease the value of call options on the common stock of GCC Company? a. An increase in GCC's stock price. b. An increase in the exercise price of the option. c. An increase in the amount of time until the option expires. d. An increase in the risk-free rate. e. GCC's stock price becomes more risky (higher variance). A 6-month call option on Meyers Inc.'s stock has a strike price of $45.00 and sells in the market for $8.25. Meyers' current stock price is $49.00. What is the option premium? a. $4.70 b. $3.50 c. $4.25 d. $5.15 e. $4.35 . If the inflation rate in the United States is greater than the inflation rate in Britain, other things held constant, the British pound will a. Appreciate against the U.S. dollar. b. Depreciate against the U.S. dollar. c. Remain unchanged against the U.S. dollar. d. Appreciate against other major currencies. e. Appreciate against the dollar and other major currencies. In Japan, 90-day securities have a 4% annualized return and 180-day securities have a 5% annualized return. In the United States, 90-day securities have a 4% annualized return and 180-day securities have an annualized return of 4.5%. All securities are of equal risk, and Japanese securities are denominated in terms of the Japanese yen. Assuming that interest rate parity holds in all markets, which of the following statements is most CORRECT? a. The yen-dollar spot exchange rate equals the yen-dollar exchange rate in the 90-day forward market. b. The yen-dollar spot exchange rate equals the yen-dollar exchange rate in the 180-day forward market. c. The yen-dollar exchange rate in the 90-day forward market equals the yen-dollar exchange rate in the 180-day forward market. d. The yen-dollar exhange rate in the 180-day forward market equals the yen-dollar exchange rate in the 90-day spot market. e. The relationship between spot and forward interest rates cannot be inferred. Today in the spot market $1 = 1.82 Swiss francs and $1 = 130 Japanese yen. In the 90-day forward market, $1 = 1.84 Swiss francs and $1 = 127 Japanese yen. Assume that interest rate parity holds worldwide. Which of the following statements is most CORRECT? a. Interest rates on 90-day risk-free U.S. securities are higher than the interest rates on 90-day risk-free Swiss securities. b. Interest rates on 90-day risk-free U.S. securities are higher than the interest rates on 90-day risk-free Japanese securities. c. Interest rates on 90-day risk-free U.S. securities equal the interest rates on 90-day risk-free Japanese securities. d. Since interest rate parity holds interest rates should be the same in all three countries. e. Interest rates on 90-day risk-free U.S. securities equal the interest rates on 90-day risk-free Swiss securities. If one U.S. dollar buys 1.46 Canadian dollars, how many U.S. dollars can you purchase for one Canadian dollar? a. 0.7123 b. 0.5548 c. 0.6849 d. 0.5685 e. 0.6781 If one British pound can purchase $1.90 U.S. dollars, how many British pounds can one U.S. dollar buy? a. 0.4947 b. 0.6105 c. 0.4053 d. 0.5263 e. 0.4579 Suppose the exchange rate between U.S. dollars and Swiss francs is SF 1.41 = $1.00, and the exchange rate between the U.S. dollar and the euro is $1.00 = 0.50 euros. What is the cross rate of Swiss francs to euros? a. 2.9046 b. 3.0738 c. 2.8200 d. 2.3970 e. 3.1584 Suppose that currently, 1 British pound equals 1.98 U.S. dollars and 1 U.S. dollar equals 1.40 Swiss francs. How many Swiss francs are needed to purchase 1 pound? a. 2.3008 b. 3.1046 c. 2.5225 d. 2.8274 e. 2.7720 A currency trader observes the following quotes in the spot market: 1 U.S. dollar = 1.21 Japanese yen 1 British pound = 2.25 Swiss francs 1 British pound = 1.65 U.S. dollars Given this information, how many yen can be purchased for 1 Swiss franc? a. 1.0471 b. 1.0382 c. 0.8873 d. 0.9494 e. 0.6832 A currency trader observes the following quotes in the spot market: 1 U.S. dollar = 10.875 Mexican pesos 1 British pound = 3.955 Danish krone 1 British pound = 1.65 U.S. dollars Given this information, how many Mexican pesos can be purchased for 1 Danish krone? a. 5.3083 b. 3.6750 c. 5.6259 d. 3.4935 e. 4.5370 Stover Corporation, a U.S. based importer, makes a purchase of crystal glassware from a firm in Switzerland for 39,960 Swiss francs, or $24,000, at the spot rate of 1.665 francs per dollar. The terms of the purchase are net 90 days, and the U.S. firm wants to cover this trade payable with a forward market hedge to eliminate its exchange rate risk. Suppose the firm completes a forward hedge at the 90-day forward rate of 1.682 francs. If the spot rate in 90 days is actually 1.665 francs, how much will the U.S. firm have saved or lost in U.S. dollars by hedging its exchange rate exposure? a. $242.57 b. $259.55 c. $208.61 d. $213.46 e. $269.25 A product sells for $750 in the United States. The spot exchange rate is $1 to 1.25 Swiss francs. If purchasing power parity (PPP) holds, what is the price of the product in Switzerland? a. 956.25 b. 890.63 c. 1,040.63 d. 1,021.88 e. 937.50 From the lessee viewpoint, the riskiness of the cash flows, with the possible exception of the residual value, is about the same as the riskiness of the lessee's a. equity cash flows. b. capital budgeting project cash flows. c. debt cash flows. d. pension fund cash flows. e. sales. A lease versus purchase analysis should compare the cost of leasing to the cost of owning, assuming that the asset purchased a. is financed with short-term debt. b. is financed with long-term debt. c. is financed with debt whose maturity matches the term of the lease. d. is financed with a mix of debt and equity based on the firm's target capital structure, i.e., at the WACC. e. is financed with retained earnings. Curran Contracting is issuing new 18-year bonds that have warrants attached. If not for the attached warrants, the bonds would carry an 11% annual interest rate. However, with the warrants attached the bonds will pay an 8% annual coupon. There are 30 warrants attached to each bond, which have a par value of $1,000. What is the implied value of each warrant? a. $9.63 b. $6.39 c. $7.01 d. $8.78 e. $7.70 Herring Inc. is considering issuing 15-year, 7.5% semiannual coupon, $1,000 face value convertible bonds at a price of $1,000 each. Each bond would be convertible into 25 shares of common stock. If the bonds were not convertible, investors would require an annual nominal yield of 10%. What is the straight-debt value of the bond at the time of issue? a. $904.79 b. $613.96 c. $694.75 d. $912.86 e. $807.84 Ellis Enterprises is considering whether to lease or buy some necessary equipment it needs for a project that will last the next 3 years. If the firm buys the equipment, it will borrow $4,600,000 at 8% interest. The firm's tax rate is 35% and the firm's before-tax cost of debt is 8%. Annual maintenance costs associated with ownership are estimated to be $300,000 and the equipment will be depreciated on a straight-line basis over 3 years. What is the annual end-of-year lease payment (in thousands of dollars) for a 3-year lease that would make the firm indifferent between buying or leasing the equipment? (Suggestion: Delete 3 zeros from dollars and work in thousands.) a. $2,437 b. $2,312 c. $2,604 d. $2,083 e. $2,541 Carolina Trucking Company (CTC) is evaluating a potential lease for a truck with a 4-year life that costs $40,500 and falls into the MACRS 3-year class. If the firm borrows and buys the truck, the loan rate would be 9%, and the loan would be amortized over the truck's 4-year life. The loan payments would be made at the end of each year. The truck will be used for 4 years, at the end of which time it will be sold at an estimated residual value of $12,000. If CTC buys the truck, it would purchase a maintenance contract that costs $1,500 per year, payable at the end of each year. The lease terms, which include maintenance, call for a $10,000 lease payment (4 payments total) at the beginning of each year. CTC's tax rate is 35%. What is the net advantage to leasing? (Note: MACRS rates for Years 1 to 4 are 0.33, 0.45, 0.15, and 0.07.) a. $1,026 b. $1,111 c. $1,248 d. $1,058 e. $1,121 Bev's Beverages is negotiating a lease on a new piece of equipment that would cost $80,000 if purchased. The equipment falls into the MACRS 3-year class, and it would be used for 3 years and then sold, because the firm plans to move to a new facility at that time. The estimated value of the equipment after 3 years is $25,000. A maintenance contract on the equipment would cost $2,500 per year, payable at the beginning of each year. Alternatively, the firm could lease the equipment for 3 years for a lease payment of $23,600 per year, payable at the beginning of each year. The lease would include maintenance. The firm is in the 20% tax bracket, and it could obtain a 3-year simple interest loan, interest payable at the end of the year, to purchase the equipment at a before-tax cost of 8%. If there is a positive Net Advantage to Leasing the firm will lease the equipment. Otherwise, it will buy it. What is the NAL? (Note: MACRS rates for Years 1 to 4 are 0.33, 0.45, 0.15, and 0.07.) a. $1,213 b. $1,332 c. $1,497 d. $1,482 e. $1,257 Emerson Electrical Engineering Inc. is issuing new 20-year bonds that have warrants attached. If not for the attached warrants, the bonds would carry an 11% interest rate. However, with the warrants attached the bonds will pay a 9% annual coupon. There are 31 warrants attached to each bond, which have a par value of $1,000. The exercise price of the warrants is $25.00 and the expected stock price 10 years from now (when the warrants may be exercised) is $50.77. What is the investor's expected overall pre-tax rate of return for this bond-with-warrants issue? a. 11.79% b. 12.41% c. 14.52% d. 10.8% e. 10.67% Quaid Co.'s common stock sells for $34, pays a dividend of $2.10, and has an expected long-term growth rate of 6%. The firm's straight-debt bonds pay 10.8%. Quaid is planning a convertible bond issue. The bonds will have a 20-year maturity, pay a 10% annual coupon, have a par value of $1,000, and a conversion ratio of 25 shares per bond. The bonds will sell for $1,000 and will be callable after 10 years. Assuming that the bonds will be converted at Year 10, when they become callable, what will be the expected return on the convertible when it is issued? a. 12.86% b. 13.63% c. 11.32% d. 12.35% e. 11.96%
Question 2
Instructions: In this scenario-based activity, you will need to review the scenario presented to you, your role in the process, and then read the information regarding key players that have been chosen to participate in this activity. Be sure to view the grading rubric at the bottom prior to proceeding to the activity, which you will submit to the DropBox. Scenario Scenario Summary In this scenario-based exercise, you are a new District Sales Manager (DSM) for a large Fortune 500 consumer goods company. One of your job responsibilities is to participate in the recruiting process. Specifically, the DSM visits local universities to interview prospective entry-level sales applicants. A detailed job description on the consumer goods salesperson job is provided in Exhibit 1. Your assignment is to visit the placement center of a smaller, local university to interview 10 prospective candidates. The 10 interviews will represent a single-day interviewing schedule at the placement center. The candidates have already had one initial interview. Since another DSM has already selected seven candidates for the second interview, you will select the remaining three candidates from a set of six r?sum?s that the placement center has forwarded for your review. Your Role/Assignment Your task is, therefore, to select three sales candidates to fill the placement interview schedule. You are provided with a set of six r?sum?s (see below). Generally, the personnel office recommends that DSMs stress six candidate characteristics that it considers important when recruiting and selecting high-quality consumer goods salespeople. In perceived order of importance, these attributes are: 1. Initiative and goal-directedness; 2. Decision-making and priority-setting abilities; 3. Communication skills and persuasiveness; 4. Leadership and teamwork capacity; 5. Willingness to take ownership and responsibility of customer accounts; and 6. Problem-solving ability and creativity. In general, the personnel office indicates that sales representatives are expected early on to be self-starters and to manage their territory and accounts on their own without a lot of supervision and feedback from the home office. The DSM is encouraged to consider these six attributes when evaluating the applicant r?sum?s. It is up to each DSM to develop his or her own evaluation model based on the job description and these known character attributes for success in consumer goods sales. As this week?s lecture states, ?Frequently, the reason for poor interviewing is the lack of planning and preparation. A sales manager should develop a very detailed list of objectives and questions for each candidate being interviewed. Also, the interviewer must do some careful listening, observation, and note-taking, so that when the interview process is over, he or she can recall important details to help make an appropriate selection.? K E Y P L A Y E R S Jack Bernard Back to top blank Jack was early for his first interview and demonstrated a high energy level and enthusiasm for the prospective job. He was dressed in a suit with shirt and tie and very personable. He greeted the interviewers politely and shook hands with both interviewers before taking a seat for the interview. He immediately started a conversation about the recent World Series outcome and took control of the conversation. He appeared nervous and was fidgeting and moving about in his seat during the interview. Jack Bernard's Resume Jack Rochelle Biden Back to top Mary Rochelle was prompt and professional at her first interview. She was polite, courteous and reserved, but well spoken and appeared comfortable in the interview situation. She was professionally dressed in a suit and at ease conversing with the interviewers. She stuck to the subject of the interview and followed the interviewers? leads in the conversation by responding directly to their questions. Rochelle Biden's Resume blank Mary Ellison Back to top blank Mary was a couple of minutes late for the interview, but apologized that she?d had some trouble finding parking. She was dressed in pants and a sweater and looked neat and tidy. She was flustered due to being late and it took her a few minutes to settle into the interview and calm down. She was obviously nervous, but once she calmed down, she presented herself very well and was able to relate her previous work experience to the current opening with professionalism and enthusiasm. Mary Ellison's Resume Rochelle Anna Wise Back to top Anna Anna arrived just on time for the interview dressed in a dress and heels. She was wearing a lot of jewelry and make up, but conducted herself professionally. Her communication skills were very strong and she smiled and conversed comfortably with the interviewers. She appeared to listen very carefully to what was said and understood the questions and responded very well with relevant answers that demonstrated an ability to think clearly in a pressure situation. She shook hands with both interviewers at the end of the meeting and thanked them for their time. She asked when she could expect to hear from them and when a decision would be made. Anna Wise's Resume blank George Brown Back to top blank George made an excellent first impression with the interviewers. He was smooth, professional, well groomed, and intelligent in his answers. He related his experiences as a student and volunteer, appeared to be studious, and had very much enjoyed attending university. He demonstrated that he?s comfortable with people and seems to enjoy politics and volunteer work, as he?d spent time at university working as a Pledge Advisor for the President of Finance, and has been active as a parliamentarian and on a scholarship committee. He is well traveled and has diverse interests in cooking, skiing, and literature, which he enjoyed talking about. George Brown's Resume George Ernest Swift Back to top Ernest Ernest was quite overbearing in the first interview. He is obviously ambitious and wants to get into management in the future. He spoke confidently of his sales experience and was able to quote achievements to back up his resume. He was professionally dressed and groomed and shook hands firmly with the interviewers upon both entering and leaving the meeting. Most of his discussion assumed that he?d be the successful candidate and he asked if he?d be able to skip some of the training, as he?s got a lot of experience and didn?t feel that he?d need it. Ernest Swift's Resume blank Y O U D E C I D E Activity Read the YOU DECIDE scenario, and using the information provided, prepare a 2-to-3-page report outlining your recommendations for the three candidates to be interviewed again. Please use APA format for your report (see Doc Sharing). Your report should contain the following. The criteria that you used to select the three candidates. Your justification of how the recommended candidates best fit your selection criteria. Note! icon Submit your assignment to the Dropbox located on the silver tab at the top of this page. You Decide Assignment - Grading Rubric Breakout Formatting (APA) - 25% Overall (Instructor?s discretion) - 25% Content - 50%: Developed a set of reasonable selection criteria based on readings from the text, lecture, and You Decide scenario (25%) Discussed skill sets or tools each candidate would bring to the position as a new sales representative (10%) Recommended three most suitable candidates for second interviews based on the described selection criteria and provided a clear justification (15%) Rating Basis Points Possible Points Awarded Superior Content and Subject: Easily identifiable, clear, well thought out. Meets or exceeds page or word length requirement. Structure: Apparent, understandable, and applicable. Examples/Sources: Examples used. Integration of external sources. Analysis: Interesting and novel. Provides different perspectives. Mechanics: APA format excellent. No major errors. 90-100 Achieving Content and Subject: Somewhat concrete, but may be slightly unclear. Meets or exceeds page or word length requirement. Structure: Generally clear and appropriate. Examples/Sources: Examples used to support most points. Analysis: Evidence often related to content. Maybe not very clear. Mechanics: APA format above average. Sentence structure, grammar, and diction strong. Some (minor) spelling errors; may have one run-on sentence or comma splice. 80-89 Average Content and Subject: Fairly easy to read and understand. Meets page or word length requirement. Structure: Overall, clearly visible with minor shortfalls. Examples/Sources: Examples used to support most points. Arguments sometimes lack supporting evidence. Limited use of external sources. Analysis: Cited references appear intermittently with no analysis or further discussion. Mechanics: APA format may contain intermittent problems in structure, grammar, and punctuation. 70-79 Below Average Content and Subject: Often unstructured and vague. Not totally applicable to content requirements. Structure: Mostly unclear and difficult to visualize. Examples/Sources: Very few examples used to support points. Analysis: External references not used or very limited with no analysis or further discussion. Mechanics: APA format not followed. Numerous mistakes in sentences, paragraph formatting, spelling, and grammar.
Question 3
Can you help by reviewing the question and my answer, and correcting/explaining. Please show the calculations for NVP and IRR, the methodology. Q: BobCo. is trying to decide between the following two mutually exclusive projects: Cash Flows Year Project I Project II 0 -$18,000 -$12,000 1 $8,500 $6,500 2 $9,000 $6,000 3 $9,500 $7,000 The only requirement the company has is that any project that is accepted must produce a minimum rate of return of 11%. Calculate payback period, discounted payback period, IRR and NPV, as well as any other measures which would be helpful. Fill in the following table with your results: Year Project I Project II Payback (yrs.) Discounted Payback (yrs.) IRR NPV What should the company do and why? My answer so far: Year Project I Project II Payback (yrs) 2.0526 2.0714 Discounted Payback (yrs) 2.4373 2.249 IRR 22.90% 28.40% NPV $3,909.00 $3,844.00 Both projects payback within the three years identified and both exceed the minimum desired rate of return requirement of 11%. Were they not mutually exclusive, both would be feasible. However, they are mutually exclusive projects, and while it is tempting to select the project with the higher internal rate of return, it is more appropriate that we choose the project with the higher net present value and earlier payback, Project I.,Rachel: Here's another question, I'll pay again and separately for the service. Could you please review this question and take a look at my answer, recalculate, solve and show all the calculations Bob's car lot will sell a used car for $3,000 with no money down. The buyer must agree to weekly payments of $40 for two years, starting one week after the car is bought. What is the EAR of this loan? Answer: PV = 3,000 = C*((1 - 1/((1 + .26/52)^104))/(.26/52)) C = $37.06,Rachel: I do not see that you have added anything to the spreadsheet I provided. I gather that by making no changes you may agree with my answer, but wanted you to do it and show me. I do not see your calculations for the NVP and the IRR, which is what I was looking for.
Question 4
Please read the case study and related documents: ?Case Study ? Omega Beta Enterprises? ?Omega Beta ? Current Internal Controls Review? ?Omega Beta ? User Requirements? ?MYOB Product Comparison Chart? Then answer the following assessment questions: Question 1: Based on the Omega Beta Internal Controls Review, what features of the new AIS will need to be in place to manage the ?Major Weaknesses? observed in the Sales function? Answer: Q.2 Which of the 3 selected MYOB systems would you recommend to the management of Omega Beta and why? Answer: Q.3 (a) List the types of conversion approaches Omega Beta can use to implement the new system. (b) Which approach would you recommend Omega Beta use? Explain your answer. Answer: Q.4 How could the Omega Beta Accountant ensure that new (AIS) business transactions are valid in accordance with legislative requirements? Answer: Q.5 Software vendors, such as MYOB, provide extensive on-line Help documentation with their software, covering all functions of the software. What are the advantages for Omega Beta in also developing their own user documentation for their staff? Answer: Q.6 What issues do you think Omega Beta will face when it comes to correctly converting its existing payroll process from the old methods to the new AIS system? Answer: Q.7 At what point should the management of Omega Beta accept that the new system complies with organisational and statutory requirements? Answer: Q.8 Describe 3 ways the new AIS could add value to Omega Beta by providing more accurate and timely accounting information. Answer: Q.8 Describe 3 ways the new AIS could add value to Omega Beta by providing more accurate and timely accounting information. Answer: Q.9 The implementation has been signed off and the CEO of Omega Beta has just received the first ?live? Balance Sheet and Profit & Loss Report from the new AIS. The CEO now asks you, acting as the Accountant: a) why reporting procedures need to be continuously reviewed? and b) how compliance with existing procedures might be monitored and how variations can be identified? Answer:,hi Professor, My apology I dont get it what you mean. But, I wont mind to pay extra, i can't separate the questions above because its a case study...I am working something else as well different questions, and the questions above really I need a hand to tutor me. I do hope you will accept it Sir. Thank you! Kind Regards, Josephine,Please let me know how much extra payment so you can help me to solve questions soo ...Again, Thank you!,Thank you Professor, You are my hero! (:,I am agree with the charges already but the deadline I am not agree with atleast 15th August 2012 @ 5pm Australian time is fine. Please not 16th Aug. because the due submission of my assignment is 15th...Please reply Sir, if you can adjust aswell. Thank you!,Thank you too Sir!,There are five major weaknesses observed in the sales function on the Alpha Internal Control: 1. Accurate database of customers- No- (Authorising party-Sales Clerk) ? Major weakness leads to poor delivery accuracy/ marketing 2. Check on credit rating? Yes, (Athorising party -Credit Officer)? Major weakness- no written authorities recorded 3. Cross-checked delivery docket and invoice Check of cancelled dockets ? No, (Authorising party -Sales person)- Major weakness- no proof deliveries have been made 4. Independent check of invoices- No, (Authorizing party- Sales Manager)- Major Weakness- no check on validity of complaints 5. Process in place for returned goods- No,( Authorising party- Salesperson)- Major weakness- no check on validity of complaints. (Professor, I have contribution answers but I need your opinion or revise it for me. what features of the new AIS will need to be in place to manage the ?Major Weaknesses? observed in the Sales function? The key word- how to manage the major weakness? There are five major weaknesses observed in the sales function on the Omega Betha Internal Control: 1. Accurate database of customers- No- (Authorising party-Sales Clerk) ? Major weakness leads to poor delivery accuracy/ marketing 2. Check on credit rating? Yes, (Athorising party -Credit Officer)? Major weakness- no written authorities recorded 3. Cross-checked delivery docket and invoice Check of cancelled dockets ? No, (Authorising party -Sales person)- Major weakness- no proof deliveries have been made 4. Independent check of invoices- No, (Authorizing party- Sales Manager)- Major Weakness- no check on validity of complaints 5. Process in place for returned goods- No,( Authorising party- Salesperson)- Major weakness- no check on validity of complaints. (Professor, I have contribution answers but I need your opinion or revise it for me. what features of the new AIS will need to be in place to manage the ?Major Weaknesses? observed in the Sales function? The key word- how to manage the major weakness? Hi Professor, Please read my answer question1 and revise it...Thank you! Q.1 Based on the Omega Beta Internal Controls Review, what features of the new AIS will need to be in place to manage the ?Major Weaknesses? observed in the Sales function? (Professor, I have contribution answers but I need your opinion or revise it for me - what features of the new AIS will need to be in place to manage the ?Major Weaknesses? observed in the Sales function? The key word- how to manage the major weakness? Answer: There are five major weaknesses observed in the sales function on the Omega Betha Internal Control: 1. Accurate database of customers- No- (Authorising party-Sales Clerk) ? Major weakness leads to poor delivery accuracy/ marketing 2. Check on credit rating? Yes, (Authorising party -Credit Officer)? Major weakness- no written authorities recorded 3. Cross-checked delivery docket and invoice Check of cancelled dockets ? No, (Authorising party -Sales person)- Major weakness- no proof deliveries have been made 4. Independent check of invoices- No, (Authorizing party- Sales Manager)- Major Weakness- no check on validity of complaints 5. Process in place for returned goods- No,( Authorising party- Salesperson)- Major weakness- no check on validity of complaints.,Oops! I made mistake sending, just ignore the first one...its Omega Betha Internal Control- the right one or second one...suggestions answer only...I still need your answer...Thank you!,I answered question #5 - Please read and correct me if I am wrong, Thank you! Q. 5 a. Types of conversion approaches Answer: 1. Direct conversion- is a direct approach where old system is changed and over write by new system. This is a least expensive method among all four but involves high risk of data loss. With the direct cutover method, company cannot revert to the old system as a backup option. 2. Parallel Conversion- Parallel word is use when two things run simultaneously, so here two operations run simultaneously. The parallel conversion changeover method requires that both the old and the new information systems operate fully for a specified period. When users, management, and the IT group are satisfied that the new system operates correctly, the old system is terminate. Parallel conversion is having very low amount of risk as if the new system does not work correctly, the company can use the old system as a backup. But it is the most costly changeover method. Data have to be input in both systems. Users must work in both system and result in increased workload and processing delays. 3. Phase in Conversion- Phase- in conversion works in different phases or stages. Implementation of new system in modules or stages is phased operation. This is also a combination of direct conversion and parallel similar to pilot conversion. But in this approach the entire system is provided to some users instead a part of system to all users. In phase conversion the risk of errors or failures is limited to the implemented module only and also phased conversion is less expensive than the full parallel operation. But in some cases, phased operation can cost more than a pilot approach where the system involves a large number of separate phases 4. Pilot conversion- The pilot conversion changeover method involves implementing the complete new system at a selected location of the company. The group that uses the new system first is called the pilot site. The old system continues to operate for the entire organization including the pilot site. After the system proves successful at the pilot site, it is implemented in the rest of the organization, usually using direct conversion method. Pilot operation is combination of parallel conversion and direct conversion approaches. b. Recommendations: From the above discussion about all four possible approaches, it is very clear that data conversion and parallel conversion approach alone is not suitable for the Omega Beta because of drawbacks like high risk or high cost but the combination of both approaches namely pilot conversion and phase-in conversion approaches is more productive. Still phase in conversion is not most suitable approach as we know there are lot of phases involve in our information system. So conclusion is pilot conversion operation is the most recommended approach for the Omega Betha because this method is cheaper and safer method. The Management can implement the new system and after the system proves successful, in this way it will be implemented under budget and also there will be low risk of system failure.,Thank you for reading my suggestion answers Professor, I do hope aswell I am doing the right solutions. Please help me that we can finish answering before or on wednesday even 5pm..yes, I still need your answers. Regards, Student,Hi Professor, I got your solutions, I just done submitted my assignment for there are questions i also did myself. Took time finalising. But, I really like your contribution solution. Thanks a lot! Best Regards, Student
Question 5
Which consumer-oriented law or laws (Fair Credit Billing Act, Fair Credit Reporting Act, Financial Services Modernization(Gramm-Leach-Bliley) Act, identity theft, Community Reinvestment Act, Equal Credit Opportunity Act, Bankruptcy Abuse Prevention and Consumer Protection Act) apply in each of the situations described below: a. Matthew Crey is discussing with a bank loan officer the terms on a loan he needs to buy a car for his family. b. Robert and Mary Nash believe they were discriminated against when their loan to purchase a new home was denied. c. Sally Ferrel was denied a loan because of an adverse report from her credit bureau, which she believes is in error. d. Herbert Coleman has just received his credit-card bill and finds several charges were made against his account that are not legitimate. e. Mary Eacher leased an automobile from a dealer for three years, but the lease was abruptly canceled even though Mary was making all required payments on time. f. First National Bank of Arden has just announced its latest CRA rating received from federal bank examiners. g. Earl and Susan Tolber believe they were denied a home improvement loan because their address is in a h. neighborhood where the local bank does not like to make such loans. h. Bill Gell decides to ?opt out? of letting his bank and his insurance company share information about him with other businesses. i. Jean Shal has just been notified by her bank that it is going to reduce the interest rate on her certificate of deposit when it is renewed. j. John Saral is confused about the terms of a credit card and needs additional information from the card company. k. Bob and Rachel Hamm are unable to meet their monthly debt-service payments and are about to lose their home.
