Question 1
For this assignment, use the Internet to research high-risk investment brokerage firms that have been indicted or convicted of ethical violations to provide insight and understanding of this market segment. Write a six to eight (6-8) page paper in which you: 1. Explain why investors may be attracted to high-risk investments such as exchange-traded derivatives, global funds, and other complex investment vehicles. 2. Analyze the risk associated with exchange-traded derivatives, such as futures and options, and what brokers might do to minimize the risk to investors. 3. Discuss the challenges related to regulating a complex global financial firm and make suggestions for regulatory improvements. 4. Analyze the ethical violations of the company you researched. 5. Discuss the consequences that you believe to be appropriate for the senior management of the firm you researched and the implications for brokers trading in high-risk investments. 6. Create a scenario where you believe the use of high-risk investments would be beneficial for the investor. Provide support for your rationale. 7. Use four (4) external resources to support your work. Note: Wikipedia and other Websites do not qualify as academic resources. Your assignment must follow these formatting requirements: ? Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions. ? Include a cover page containing the title of the assignment, the student?s name, the professor?s name, the course title, and the date. The cover page and the reference page are not included in the required page length. The specific course learning outcomes associated with this assignment are: ? Analyze the derivatives market and determine the use of derivatives to efficiently manage investment risks in an investment portfolio. ? Use technology and information resources to research issues in corporate investment analysis. ? Write clearly and concisely about corporate investment analysis using proper writing mechanics. You should use in-text citations and provide proper caption and source for the graphs and other graphics used.,Thank you...this assignment has to be in APA format with citations and references throughout the document and a reference page per the criteria I have in my assignment.,I can accept this price but the format has to be in APA style with citations through the document. Will that happen?,Please ensure this is in APA format as the assignment instructions state and there are citations throughout the assignment. Please confirm,I cannot use investopedia as a valid source. Also, this document needs to be in word document without any of the coloring you have applied here.,the citations in the document are not in APA format. All I see is the website links instead of the author etc.
Question 2
This is the topic I chose --an ethics issue affecting accountants in the United States. Teacher requirement: My paper requirements are pretty specific. This professional paper should have 7-8 pages of content (not including the cover page and bibliography); be double spaced; include a cover page with your name and the title of the paper; have margins no larger than 1"; have a separate bibliography with at least five sources of which at least three must be from the internet (do not include your textbook or Wikipedia as a cited source); include the exact web sites for the sources cited; and have no spelling errors. Please work to stay within the 7 page content requirement as shorter and longer papers will not receive maximum credit. Papers prepared for other courses may not be submitted for this requirement. Successful papers will illustrate the student's mastery of the topic by including key concepts in the paper and discussion of the topic selected for the paper. The student should take care to avoid issues of academic dishonesty and plagiarism. A paper is not created through the use of copy and paste materials from the Internet but rather by carefully considering sources and personally writing the narrative, uniting topics from the sources used. The paper should be properly presented in APA format. You will find many excellent writing resources under Course Content, Writing Resources and APA Tutorial on the left hand side of your screen.
Question 3
Using the following cash flows for projects A and B, use payback period, discounted payback period, NPV, IRR, and MIRR to see if these are good projects or not. > Project A: (283,000); 46,000; 89,000; 104,000; 123,000; 187,000; and 72,000 > Project B: (318,000); 72,000; 213,000; 131,000; 112,000; 92,000; 64,000 (Assume the interest rate is 10% and the Cost Recovery Policy is 3 years) Problem Summary type here Discuss each of the tools we discussed in the Attend portion of this Unit and explain what the tool is telling you, what its criterion is, and its strengths and weakness. Problem Analysis type here Post your Excel worksheet in the drop box with all your calculations and answers. Put an X in the box when this is complete. Application type here Explain whether these are good projects or not. If you could only select one project (they are mutually exclusive), which one would you select and why? Using the following cash flows for projects A and B, use payback period, discounted payback period, NPV, IRR, and MIRR to see if these are good projects or not. > Project A: (283,000); 46,000; 89,000; 104,000; 123,000; 187,000; and 72,000 > Project B: (318,000); 72,000; 213,000; 131,000; 112,000; 92,000; 64,000 (Assume the interest rate is 10% and the Cost Recovery Policy is 3 years) Problem Summary type here Discuss each of the tools we discussed in the Attend portion of this Unit and explain what the tool is telling you, what its criterion is, and its strengths and weakness. Problem Analysis type here Post your Excel worksheet in the drop box with all your calculations and answers. Put an X in the box when this is complete. Application type here Explain whether these are good projects or not. If you could only select one project (they are mutually exclusive), which one would you select and why?
Question 4
Chapter 13 1. Jane's Donut Co. borrowed $200,000 on January 1, 2009, and signed a two-year note bearing interest at 12%. Interest is payable in full at maturity on January 1, 2011. In connection with this note, what amount should Jane?s report as interest expense at December 31, 2009? 2. In May of 2009, Raymond Financial Services became involved in a penalty dispute with the EPA. At December 31, 2009, the environmental attorney for Raymond indicated that an unfavorable outcome to the dispute was probable. The additional penalties were estimated to be $770,000 but could be as high as $1,170,000. After the year-end, but before the 2009 financial statements were issued, Raymond accepted an EPA settlement offer of $900,000. What amount should Raymond have reported as an accrued liability on its December 31, 2009, balance sheet? 3. Which of the following is a contingency that should be accrued? A. The company is being sued and a loss is reasonably possible and reasonably estimable. B. The company deducts life insurance premiums from employees' paychecks. C. The company offers a two-year warranty and the expenses can be reasonably estimated. D. It is probable that the company will receive $100,000 in settlement of a lawsuit. 4. Funzy Cereal includes one coupon in each package of Wheatos that it sells and offers a toy car in exchange for $1.00 and 3 coupons. The cars cost Funzy $1.50 each. Experience indicates that 40% of the coupons eventually will be redeemed. During the last month of 2009, the first month of the offer, Funzy sold 12 million boxes of Wheatos and 2.4 million of the coupons were redeemed. What amount should Funzy report as a promotional expense for coupons on its December 31, 2009, income statement? A. $ 0. B. $ 400,000. C. $ 800,000. D. $1,200,000. Chapter 14 5. On June 30, 2009, Hardy Corporation issued $10 million of its 8% bonds for $9.2 million. The bonds were priced to yield 10%. The bonds are dated June 30, 2009, and mature on June 30, 2016. Interest is payable semiannually on December 31 and July 1. If the effective interest method is used, by how much should the bond discount be reduced for the 6 months ended December 31, 2009? 6. On June 30, 2009, Blair Industries had outstanding $80 million of 8%, convertible bonds that mature on June 30, 2010. Interest is payable each year on June 30 and December 31. The bonds are convertible into 6 million shares of $10 par common stock. At June 30, 2009, the unamortized balance in the discount on bonds payable account was $4 million. On June 30, 2009, half the bonds were converted when Blair's common stock had a market price of $30 per share. What journal entry should Blair make record when recording the conversion? 7. On February 1, 2008, Pat Weaver Inc. (PWI) issued 10%, $1,000,000 bonds for $1,116,000. PWI retired all of these bonds on January 1, 2009, at 102. Unamortized bond premium on that date was $92,800. How much gain or loss should be recognized on this bond retirement? 8. TMC issued $50 million of its 12% bonds on April 1, 2009, at 98 plus accrued interest. The bonds are dated January 1, 2009, and mature on December 31, 2030. Interest is payable semiannually on June 30 and December 31. What amount did TMC receive from the bond issuance? Chapter 15 9. For a leased asset under a lease that qualifies as a capital lease, the depreciation period used by the lessee must be: A. The same period that was used by the lessor. B. The useful life to the lessee. C. The term of the lease regardless of the lease provisions. D. The remaining life of the asset at the time the lease agreement took effect. 10. ABC Company leased equipment to Best Corporation under a lease agreement that qualifies as a direct financing lease. The cost of the asset is $120,000. The lease contains a bargain purchase option that is effective at the end of the fifth year. The expected economic life of the asset is ten years. The lease term is 5 years. The asset is expected to have a residual value of $2,000 at the end of ten years. Using the straight-line method, what would Best record as annual depreciation? 11. N Corp. entered into a nine-year capital lease on a warehouse on December 31, 2009. Lease payments of $26,000, which includes real estate taxes of $1,000, are due annually, beginning on December 31, 2010, and every December 31 thereafter. Neal does not know the interest rate implicit in the lease; N's incremental borrowing rate is 9%. The rounded present value of an ordinary annuity for nine years at 9% is 6.0. What amount should N report as capitalized lease liability at December 31, 2009? A. $150,000. B. $156,000. C. $225,000. D. $234,000. 12. Eastern Edison Company leased equipment from Low-Tech Leasing on January 1, 2009. Low-Tech purchased the equipment at a cost of $222,666. Required: Prepare appropriate journal entries for Low-Tech Leasing for 2009 (for January 1 and December 31). Assume a December 31 year-end. Chapter 16 13. For its first year of operations Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Tringali's tax rate is 40%. Assume that no estimated taxes have been paid. What should Tringali report as income tax payable for its first year of operations? A. $120,000. B. $114,000. C. $106,000. D. $ 8,000. 14. Woody Corp. had taxable income of $8,000 in the current year. The amount of MACRS depreciation was $3,000 while the amount of depreciation reported in the income statement was $1,000. Assuming no other differences between tax and accounting income, Woody's pretax accounting income was: A. $ 5,000. B. $ 6,000. C. $10,000. D. $11,000. 15. Alamo Inc. had $300 million in taxable income for the current year. Alamo also had a decrease in deferred tax assets of $30 million and an increase in deferred tax liabilities of $60 million. The company is subject to a tax rate of 40%. What was the amount of the total income tax expense for the year? 16. The financial reporting carrying value of Boze Music's only depreciable asset exceeded its tax basis by $150,000 at December 31, 2009. This was a result of differences between straight line depreciation for financial reporting purposes and MACRS for tax purposes. The asset was acquired earlier in the year. Boze has no other temporary differences. The enacted tax rate is 30% for 2009 and 40% thereafter. How should Boze report the deferred tax effect of this difference in its December 31, 2009, balance sheet? (what account and what amount?) Chapter 17 17. A company's defined benefit pension plan had a PBO of $265,000 on January 1, 2009. During 2009, pension benefits paid were $40,000. The discount rate for the plan for this year was 10%. Service cost for 2009 was $80,000. Plan assets (fair value) increased during the year by $45,000. Required: Determine the amount of the PBO at December 31, 2009. 18. Data for 2009 were as follows: PBO, January 1, $240,000 and December 31, $270,000; pension plan assets (fair value) January 1, $180,000, and December 31, $230,000. The projected benefit obligation was underfunded at the end of 2009 by: A. $30,000. B. $60,000. C. $20,000. D. $40,000. ? 19. The following information is related to the defined benefit pension plan of Dreamworld Company for the year: Assuming no other relevant data exist, what is the pension expense for the year? 20. Oregon Co.'s employees are eligible for retirement with benefits at the end of the year in which both age 60 is attained and they have completed 35 years of service. The benefits provide 15 years reimbursement for health care services of $20,000 annually, beginning one year from the date of retirement. Ralph Young was hired at the beginning of 1973 by Oregon after turning age 22 and is expected to retire at the end of 2011 (age 60). The discount rate is 4%. The plan is unfunded. The PV of an ordinary annuity of $1 where n = 15 and i = 4% is 11.11839. The PV of $1 where n = 2 and i = 4% is 0.92456 What is the present value of Ralph's net benefits as of his expected retirement date, rounded to the nearest dollar?,Can you please show your work, or I will not get full credit.
Question 5
Please read the case and then answer three questions. Garden State Container Corporation, Financial Analysis Forecasting, Case 36, Directed Garden State Container Corporation manufactures boxes and other containers primarily for farm products. More than 85 percent of the company?s sales come from the northeastern part of the United States, especially Pennsylvania, New Jersey, New York, and Maryland, although the company?s patented egg cartons are distributed throughout the United States. Jim Jackson, the founder and president, recently received a call from Martha Menendez, vice president of Atlanta First National Bank. Menendez told him that a negative report had been generated by the bank?s computerized analysis system; the report showed that Garden State?s financial position was bad and getting worse. The bank requires quarterly financial statements from each of its major loan customers. Information from these statements is fed into the computer, which then calculates key ratios for each customer and charts trends in these ratios. The system also compares the statistics for each company with the average ratios of other firms in the same industry and against any protective covenants in the loan agreements. If any ratio is significantly worse than the industry average, reflects a marked adverse trend, or fails to meet contractual requirements, the computer highlights the deficiency. The latest report on Garden State revealed a number of adverse trends and several potentially serious. Particularly disturbing were the 1992 current, quick, and debt ratios, all of which failed to meet the contractual limits of 2.0, 1.0, and 55 percent, respectively. Technically, the bank had a legal right to call all the loans it had extended to Garden State for immediate repayment and, if the loans were not repaid within ten days, to force the company into bankruptcy. Martha hoped to avoid calling the loans if at all possible, as she knew this would back Garden State into a corner from which it might not be able to emerge. Still, her own bank?s examiners had recently become highly sensitive to the issue of problem loans, because the recent spate of bank failures had forced regulators to become more strict in their examination of bank loan portfolios and to demand earlier identification of potential repayment problems. One measure of the quality of a loan is the Altman Z score, which for Garden State was 3.04 for 1992, slightly below the 3.20 minimum that Martha?s bank uses to differentiate strong firms with little likelihood of bankruptcy in the next two years from those deemed likely to go into default. This will put the bank under increased pressure to reclassify Garden State?s loans as ?problem loans,? to set up a reserve to cover potential losses, and to take whatever steps are necessary to reduce the bank?s exposure. Setting up the loss reserve would have a negative effect on the bank?s profits and reflect badly on Martha?s performance. To keep Garden State?s loan from being reclassified as a ?problem loan,? the Senior Loan Committee will require strong and convincing evidence that the company?s present difficulties are only temporary. Therefore, it must be shown that appropriate actions to overcome the problems have been taken and that the chances of reversing the adverse trends are realistically good. Martha now has the task of collecting the necessary information, evaluating its implications, and preparing a recommendation for action. The recession that plagued the U.S. economy in the early 1900s caused severe, though hopefully temporary, problems for companies like Garden State. On top of this, disastrous droughts for two straight summers had devastated vegetable crops in the area, leading to a drastic curtailment of demand for produce shipping containers. In light of the softening demand, Garden State had aggressively reduced prices in 1991 and 1992 to stimulate sales. Higher sales, the company believed, would allow it to realize greater economies of scale in production and to ride the learning, or experience, curve down to a lower cost position. Garden State?s management had full confidence that normal weather and national economic policies would revive the ailing economy and that the downturn in demand would be only a short-term problem. Consequently, production continued unabated, and inventories increased sharply. In a further effort to reduce inventory, Garden State relaxed its credit standards in early 1992 and improved its already favorable credit terms. As a result, sales growth did remain high by industry standards through the third quarter of 1992, but not high enough to keep inventories from continuing to rise. Further, the credit policy changes had caused accounts receivable to increase dramatically by late 1992. To finance its rising inventories and receivables, Garden State turned to the bank for a long-term loan in 1991 and also increased its short-term credit lines in both 1991 and 1992. However, this expanded credit was insufficient to cover the asset expansion, so the company began to delay payments of its accounts payable until the second late notice had been received. Management realized that this was not a particularly wise decision for the long run, but they did not think it would be necessary to follow the policy for very long - the 1992 summer vegetable crop looked like a record breaker, and it was unlikely that a severe drought would pull out of the weak growth scenario in late 1992. Thus, the company was optimistic that its stable and profitable markets of the past would soon reappear. After Martha?s telephone call, and the subsequent receipt of copy of the bank?s financial analysis of Garden State, Jim began to realize just how precarious his company?s financial position had become. As he started to reflect on what could be done to correct the problems, it suddenly to reflect on what could be done to correct the problems, it the bank imagined. Jim had recently signed a firm contract for a plant expansion that would require an additional $12,750,000 of capital during the first quarter of 1993, and he had planned to obtain this money with a short ?term loan from the bank to be repaid from profits expected in the last half of 1993 as a result of the expansion. In his view, once the new production facility went on line, the company would be able to increase output in several segments of the shipping container market. It might have been possible to cut back on the expansion plans and to retrench, but because of the signed construction contracts and the cancellation charges that would be imposed if the plans were canceled, Jim correctly regards the $12,750,000 of new capital as being essential for Garden State?s very survival. Jim quickly called his senior management team in for a meeting, explained the situation and asked for their help in formulating a solution. The group concluded that if the company?s current business plan were carried out, Garden State?s sales would grow by 10 percent from 1992 to 1993 and by another 15 percent from 1993 to 1994. Further, they concluded that Garden State should reverse its recent policy of aggressive pricing and easy credit, returning to pricing that fully covered costs plus normal profit margins and to standard industry credit practices. These changes should enable the company to reduce the cost of goods sold from over 85 percent of sales in 1992 to 8 percent in 1993 and then to 7.5 percent in 1994. Significant cuts should also be possible in miscellaneous expenses, which should fall from 2.92 percent of 1992 sales to approximately 1.75 percent of sales in 1993 and to 1.25 percent in 1994. These cost reductions represented ?trimming the fat,? so they were not expected to degrade the quality of the firm?s products or the effectiveness of its sales efforts. Further, to appease suppliers, future bills would be paid more promptly, and to convince the bank how serious management is about correcting the company?s problems, cash dividends would be eliminated until the firm regains its financial health. Assume that Jim has hired you as a consultant to first verify the bank?s evaluation of the company?s current financial situation and then put together a forecast of Garden State?s expected performance for 1993 and 1994. Jim asks you to develop some figures that ignore the possibility of a reduction in credit lines and that assume the bank will increase the line of credit by the $12,750,000 needed for the expansion and supporting working capital. Also, you and Jim do not expect the level of interest rates to change substantially over the two-year forecast period; however, you both think that the bank will charge 12 percent on both the additional short-term loan, if it is granted, and on the existing short-term loans, if they are extended. The assumed 40 percent combined federal and state tax rate should also hold for two years. Finally, if the bank cooperates, and if Jim is able to turn the company around, the P/E ratio should be 12 in 1993 and should rise to 14 in 1994. Questions ? Complete the 1992 columns of Tables 3 through 6, disregarding for now the projected data in the 1993 and 1994 columns. If you are using the Lotus model, use it to complete the tables. Be sure you understand all the numbers, as it would be most embarrassing if you were asked how you got a particular number, and could not give a meaningful response. ? Based on the information in the case and on the results of your calculations in Question 1. prepare a list of Garden State?s strengths and weaknesses. In essence, you should look at the common-sized statements and each group of key ratios (for example, the liquidity ratios) and see what those ratios indicate about the company?s operations and financial condition. As part of your answer, use the extended Du Pont equation to highlight the key relationships. ? Recognizing that you might want to revive your opinion later, does it appear, based on your analysis to this point, that the bank should lend the requested money to Garden State? Explain. Table 3 Common-Sized Balance Sheets for Years Ended December 31 1990 1991 1992 Assets: Cash and marketable securities 8.82% 5.13% 3.37% Accounts receivable 30.39 25.72 x Inventory 35.36 48.32 50.39 Current Assets 74.55% 79.18% x Land, buildings, plant, and equipment 30.78% 27.31% x Accumulated depreciation -5.32% -6.48% -6.88 Net fixed assets 25.45% 20.82% 16.05% Total assets 100.00% 100.00% 100.00% Table 4 Common-Size Income Statements for Years Ended December 31 1990 1991 1992 Net sales 100.00% 100.00% 100.00% Cost of goods sold 80.52 82.18 x Gross profit 19.48% 17.82% 14.76% Admin & selling expenses 7.30% 8.11% 8.41% Depreciation 0.91 0.88% x Miscellaneaous expenses 1.16% 1.88% 2.85% Total operating expenses 9.36% 10.86% 2.28% EBIT 10.12% 6.95% 2.48% Interest on short-term loans 0.18% 0.30% x Interest on long term loans 0.38% 0.53% x Interest on mortgage 0.15% 0.12% 0.10% Total interest 0.71% 0.95% 1.51% Before tax earnings 9.41% 6.00% 0.96% Taxes 3.76% 2.40% x Net income 5.64% 3.60% 0.58% Dividends on stock 1.41% 0.90% 0.14% Additions to retained earnings 4.23% 2.70% 0.43% Table 5 Statement of Cash Flows for Years Ended December 31 1991 1992 Cash Flows from Operations Sales $378,549 $401,251 Increase in receivables -2,728 x Cash sales $375,821 $379,461 Cost of goods sold ($311,110) -342,016 Increase in inventories ($29,570) -28,623 Increase in accts payable $7,484 18,984 Increase in accruals $3,314 x Cash cost of goods ($329,882) x Cash margin $45,939 x Admin & selling expenses ($30,690) ($33,762) Miscellaneous expenses ($7,114) ($11,450) Taxes ($9,088) ($1,547) Net Cash Flow from operations ($953) x Cash Flow from Fixed Asset Investment: Investment in fixed assets ($4,561) ($5,409) Cash Flow from Financing Activities: Increase in short term debt $3,824 $26,266 Increase in long term debt 6,694 x Repayment of mortgage ($536) ($522) Interest expense ($3,598) ($6,076) Common dividends ($3,408) ($580) Net Cash Flow from financing activities $2,976 $19,088 Increase (decrease) in cash and marketable securities ($2,539) x Table 6 Historical and Pro Forma Ratio Analysis for Years Ended December 31 Pro Forma Industry 1990 1991 1992 1993 1994 Average Liquidity Ratios: Current ratio 3.13 2.74 x x x 2.5 Quick ratio 1.65 1.07 0.72 1.13 x 1.00 Leverage Ratios: Debt ratio 40.80% 46.47% x x 52.31% 50.00% TIE coverage 14.23 7.31 1.64 x 6.55 7.7 Asset Management Ratios: Inventory turnover (cost)a 7.09 4.49 3.49 5.70 5.70 5.70 Inventory turnover (sale)b 8.81 5.46 4.10 x x 7.00 Fixed asset turnover 12.24 12.67 12.85 11.38 13.77 12.00 Total asset turnover 3.12 2.64 x 2.05 x 3.00 Days sale outstanding (ACP)c 35.12 35.11 52.68 x 32.00 32.00 Profitability Ratios: Profit margin 5.64% 3.60% 0.58% x x 2.90% Gross profit margin 19.48% 17.82% 14.76% 17.50% 20.00% 18.00% Return on total assets 17.58% 9.50% x 5.90% 10.94% 8.80% ROE 29.70% 17.74% 2.95% x x 17.50% Other Ratios: Altman Z scored 6.64 4.75 x 3.95 5.42 4.65 Payout ratio 25.00% 25.00% 25.00% 0.00% x 20.00%,Hi, For question 3 you did not explain why the bank should give the loan to the company.
