Question 1
Please help, the questions are at the bottom. Thank you! For the following independent situations, assume that you are the audit partner on the engagement: 1. During your audit of Debold.com, Inc., you conclude that there is a possibility that inventory is materially overstated. The client refuses to allow you to expand the scope of your audit sufficiently to verify whether the balance is actually misstated. 2. Four weeks after the year-end date, a major customer of Prince Construction Co. declared bankruptcy. Because the customer had confirmed the balance due to Prince at the balance sheet date, management refuses to charge off the account or otherwise disclose the information. The receivable represents approximately 10% of accounts receivable and 20% of net earnings before taxes. 3. You complete the audit of Johnson Department Store, and in your opinion, the financial statements are fairly presented. On the last day of the audit, you discover that one of your supervisors assigned to the audit has a material investment in Johnson. 4. Auto Delivery Company has a fleet of several delivery trucks. In the past, Auto Delivery had followed the policy of purchasing all equipment. In the current year, they decided to lease the trucks. The method of accounting for the trucks is therefore changed to lease capitalization. This change in policy is fully disclosed in footnotes. 5. You are auditing Woodcolt Linen Services for the first time. Woodcolt has been in business for several years but has never had an audit before. After the audit is completed, you conclude that the current year balance sheet is stated correctly in accordance with GAAP. The client did not authorize you to do test work for any of the previous years. 6. You were engaged to audit the Cutter Steel Company?s financial statements after the close of the corporation?s fiscal year. Because you were not engaged until after the balance sheet date, you were not able to physically observe inventory, which is highly material. On the completion of your audit, you are satisfied that Cutter?s financial statements are presented fairly, including inventory about which you were able to satisfy yourself by the use of alternative audit procedures. REQUIREMENT: For each situation, do the following: a. Identify which of the conditions requiring a modification of or a deviation from an unqualified standard report is applicable. b. State the level of materiality as immaterial, material, or highly material. If you cannot decide the level of materiality, state the additional information needed to make a decision. c. Given your answers in parts a and b, state the type of audit report that should be issued. If you have not decided on one level of materiality in part b, state the appropriate report for each alternative materiality level.
Question 2
This is continue of question_id=7258163. attached quetion_id=7258163. MODULE PROJECT INSTRUCTIONS-WEEK 7 trategy occurs in increasingly complex environments which are continually reshaped by forces of globalisation and by technological advances. These changes not only affect the pace of change in the organisation?s environment, as well as in its resource portfolio, it also requires of strategic managers a heightened sensitivity to the public appearance of their decisions. The ubiquity of media and electronic communication in our daily lives affords the public hitherto unimaginable insights into managerial or political communications as, for instance in the case of Wikileaks, and holds the possibility of projecting newsworthy issues onto a world-wide audience. Moreover, empowered by the ability to choose between many potential suppliers from around the world to satisfy their needs, consumer choices are increasingly based on ethical considerations. The ways in which a firm?s actions are perceived are therefore of paramount importance when making strategic decisions. However, this raises the question of the suitability of strongly analytical strategy formation processes, as well as dominantly endogenous, resource-focussed approaches to sufficiently consider the importance of the symbolic capital (Holt and McNulty 2008) that establishes authority and credibility with various stakeholders. Following your analysis of a Shell oil spill in Nigeria in the ?becoming a leader? module, you are now asked to consider the strategic implications of the recent BP Deepwater Horizon accident. Your analysis should include thoughtful consideration of the MBA programme threads. You will find information and outcomes from the event in the following article: http://www.ft.com/cms/s/0/c1945fcc-c0f4-11df-99c4-00144feab49a.html#axzz1Azmu20Ut In addition, you may want to incorporate ideas from the following articles in your project: Tsoukas, H. (1999) ?David and Goliath in the risk society: making sense of the conflict between Shell and Greenpeace in the North Sea?, Organization, 6 (3): 499-528. Holt, R. & McNulty, T. (2008) ?Securing the license to act: a foundational capability?, Journal of Strategy and Management, 1 (1): 72-92. Your final module project analysis should address the following: Conduct research and provide an analysis of BP?s strategy before the accident occurred using appropriate strategic frameworks (which you have learned throughout this module) Discuss implications of BP?s strategy in terms of public perception and its possible impact on business performance Critically discuss BP?s ability to strike a balance between its interests and wider needs and expectations in light of the strategic frameworks and models you have encountered In the final submission, in week 7, submit approximately 4,000 words in which you address the following: Synthesise theories and models from the module readings and literature (that address the issue in the situation). Utilise effective discussion, analysis and conclusions showing critical thinking to propose solutions and address the following questions: What are the implications of BP?s strategy in terms of public perception and how may this impact upon their performance? Critically discuss BP?s ability to strike a balance between its interests and wider needs and expectations in light of the strategic frameworks and models you have encountered. Provide correct referencing and citation Be sure to cite and reference examples from the module textbook and journal articles presented in this module as well as resources you identify from your own research. Your submission should demonstrate critical analysis of the topic and a coherent application of related theories.",ensure no plagiarism and relevant like are used in reference. your earlier solution was full of plagiarism and irrelevant link are used. please avoid such mistakes this time.,Separate. I have shared the attched document for your referencing. This was done you as part of question I'd:7258163. Your original document had 53% Plagrisim. I spent almost more then 10hrs to correct. I oversee the reference the link. I got a complaint from tutor that I have used irrelevant reference link. Please ensure the follow in the current solutions. 1. Ensure no plagrisim 2. Refence should more relevant against the solution. Not simply mention all reference which are not part of the solutions. Thanks.,Please find the attached report. It complete full of plagiarism. Many of the reference link does not have any link to the main content. Please help to correct and resend it.,By tomorrow afternoon 20-July-2011 afternoon (12 noon +8GMT),hi Ma'am, currently my Turnitin id is not working. let me check once again. as first cut I could see some of mismatch on the solution. let me brief once again what is asked in assignment. Taking the parts of the question one by one: "Synthesise theories and models from the module readings and literature (that address the issue in the situation)." This is standard stuff - it just means apply your learning in the module as you write about possible solutions. Use concepts and frameworks from the module and other reading, properly cited of course. "Utilise effective discussion, analysis and conclusions showing critical thinking to propose solutions and address the following questions:" This quite poorly worded sentence asks you to look at the way forward for BP. In this sort of exercise you should try to present options - i.e. different ways forward. Then you can write critically to discuss these options. Again, draw on theory where you can. After that, you can select the best option, and give your reasoned judgement about why it is the best option. "What are the implications of BP?s strategy in terms of public perception and how may this impact upon their performance?" Again, the English is poor (I didn't write it). It just means that in developing your strategic options for BP, you should consider how the wider community of stakeholders will react, especially in the Gulf area affected by the accident. In developing its options for the future, should BP care about what the public thinks, and how? "Critically discuss BP?s ability to strike a balance between its interests and wider needs and expectations in light of the strategic frameworks and models you have encountered. " This just asks you to think about how, going forward, BP should balance its own goals - e.g. maximise return on capital for its shareholders - with those of society. The above question framework is quite loose. You don't need to structure your answer exactly as per the above sections. To cut a long story short, you're required to write about BP's strategic options after Deepwater Horizon, and to do so using the theory you've learned in this module. Finally, note that the 4000 words. please help me re look the solution and and reply me soon. I have asked my Tutor one day extension. i can submit till today after noon 12 (SST +8GMT).,Please please ensure no resue of 7258163. this topic is continue of 7258163. but it should saparate and should not incldue any of the solution from 7258163. should cover around 4000 words. I am allready late on submition. can you please expediate.,ok thank you so much.,29% match with others. I have highlighted in yellow. please correct it and resend it quick. is it possible to do in within hr. thanks,i am waiting for your response. please respond.
Question 3
POTOMAC H EALTH CARE 15 STOCK Porol,lec Hearrucanu is an investor-owned hospital chain that owns and operates nine hospitals in Maryland, Virginia, and the District of Columbia. Marcia Long, a recent graduate of a prominent health services administration program, has just been hired by Washington Medical Center, Potomac's iargest hospital. Like all new management personnel, Marcia must undergo three months of intensive indoctrination at the system level before joining the hospital. In Case r4, Potomac Healthcare (A), Marcia conducted an analysis of the firm's bonds and presented her findings to the company's executive committee. Potomac's chief financial officer, Hugo Welsh, was very impressed with the quality of Marcia's presentation. Furthermore, the other members of the committee stated that they learned a great deal about debt financing from Marcia's presentation and that they would like to see a similar presentation on equity financing. Because Marcia would be leaving corporate headquarters to start her hospital assignment in less than four weeks, Hugo immediately assigned her the task of analyzing the firmt equity situation and preparing another presentation for the executive committee. Marcia began by reexaminingthe firmt annual reportto getsome basic data. Then, she searched the Wcl/ Streetlaumal,Value Line, andother potential sources of financial data to obtain some market data as well as analysts'forecasts for the firm. Thble r5.r contains the information that Marcia developed. (For information on thousands of stocks, including beta estimates, see the Yahoo finance web page at http:/ifinance,yahoo .com. To go to healthcare stocks, click on Healthcare, which leads to a (B) VALUA TION t07 r08 Cases in Healthcare Finance TABLE 15.1 Potomac Healthcare: Selected Stock Data Historical Data: Year Earnings per Share Dividends per Share 2000 2001 2002 2003 2004 2005 s1 .14 1.32 1.54 1.56 1.80 2.00 s0.21 0.32 0.35 0.36 0.39 0.48 $8.00 10.0o/o 4.0% Assumed Current (January 1, 2006) Data Current stock price Estimated dividend growth rates: Next 5 years Long-term steady state Market data: Yield on long-term Treasury bonds s.Ook Merrill Lynch estimate of market returns 11.0o/o Value Line beta coefficient 1.2 listing of four related industries. Click on one of the industries to obtain a listing of the companies in that industry. Finally, click on one of the company names to obtain key information on that stock.) As before, Hugo did not want Marcia to go off on a tangent, so he provided her with a list of questions to answer. Also as before, Marcia welcomed the challenge of working on a task that was traditionally assigned to finance MBAs, rather than to graduaies of health services administration programs. Put yourself in Marcia's shoes and see how you would fare if assigned this task and needed to answer the following questions: L a. What are Potomac's historical earnings and dividend growih rates over the entire 2ooo--zoo5 period? (Hint: Use zooo data for the present value, Potomac Healthcare (B) zoo5 data for the future vahrc, and r as the number of periods.) b. What are the average annual compounded growth rates? (Hint: Use zooo data for the present value, zoo5 data for future value, and 5 as the number of periods.) c. Which rate (overall or annual) better expresses the concept of growth? a. What was the firrn's payout ratio in zoo5? (Hint: The payout ratio is the percentage of earnings paid out to stockholders as dividends.) b. What was Potomac's average payout over the past six years? c. If the payout ratio of an average investor-owned hospital company were about 5o percent, is Potomac's payout about average, below average, or above averuge? What is the primary factor that influences a business's payout ratio? a, What is the Capital Asset Pricing ModelZ What is the Security Market Line (SML)? b. Graph the SML using the data presented in Thble r5.r. c. What would happen to the SML if investors' risk aversion increased and the required rate of return on ihe market rose to rz percent? d. What would happen to the SML if inflation expectations increased by r percentage point? (Hint: Investors would add r percentage point to their required rates of return on all assets, including riskfree assets,) e. Return to the base case data in Part b of this question. According to the SML, what is the required rate of return on Potomac's stock? Plot that point on your SML graph. For now, disregard the dividend growth rates given in Table r5.r, Assume that analysts estimated that Potomac would have a long-term (constant) dividend growth rate of 5.o percent. Furthermore, Thble r5.r gives a zoo5 dividend (D,) of $o.+8 and an end-of-year 109 3. 110 Cases in Healthcare Finance (December 3r, zoo5, or fanuary r, zoo6) stock price (p ) of $B.oo. a. What is the expected rate of return on potomac's stock if it was purchased on January 4 zoo6? b. What is the expected dividend yield and expected capital gains yield? c. What is the relationship behveen dividend yield and capital gains yield over time under constant growth assumptions? d. What conditions must hold to use the constant growth model? Do many "real-world" stocks satisfu the constant growth assumptions? e. Plot the expected rate of return found in Part a on the SML graph from question 3. Based on the data developed so far, would you buy Potomac's stock? Now consider the fact that Value Line actually predicted that Potomac's dividends would grow at a ro percent rate for the next five years, and then the growth rate would fall to a steady state (constant)4 percent inio the foreseeable future. a. Under these conditions, what is the value of Potomac's siock at the beginning of zoo6? (Hint: Lay out the expected dividends on a timeline up to and including the first year of constant [4 percent] growth. Use the dividend expected in Year 6 and the constant growth model to calculate the value of the stock at the end of Year 5. Discount this Year 5 value, along with the dividends expected in Years r-5 back to Year o. Sum these present values to obtain the value of the stock.) b. Assume that the value you calculated was the actual stock price on January r, zoo6. What is the expected stock price at the end of zoo6 assuming that the stock is in equilibrium? c. What are the expected dividend yield, capital gains yield, and total return for zoo6? d. Repeat the Part c analysis for zooT. What happens to the expected dividend and capitalgains yields Potomac Healthcare (B) from zoo6 to zooT? What are the expected dividend and capital gains yields for zrrr? Potomac's stock price was actually $B.oo at the beginning of zoo6, Using the growth rates given in Table r5.r (and also used in question 5), what is the stock's expected rate of return? (Hint: This is not an easy question. A model similar to the one used to answer question 5 must be applied, but a trial-and-error technique must be used to find the discount rate that discounts the expected dividend land Year 5 stock value] stream back to the current price, $B.oo. The process is complicated by the fact that each discount rate selected in the trial-and-error process must be used to find ihe Year 5 stock value before it is used to discount the expected cash flow stream back to Year o.) What is the efficient markets hypothesis, and what are its implications for stock investors? til f U- -
Question 4
"Perry company had no short-term investment prior to year 2011.it had the following transactions involving short-term investment in available for-sale securities during 2011. April 16 purchased 8,000 shares of Gem Co. stock at $24.25 per share plus a $360 brokerage fee. May 1 paid $200,000 to buy 90-day U.S treasury bills 9 (debt securities); $200,000 principle amount 6% interest securities dated may 1 July 7 purchased 4,000 shares of Pepsi Co stock at $49.25 share plus a $350 brokerage fee. 20 purchased 2,000 share of Xerox stock at $16.75 per share plus $ 410 brokerage fee. Aug.3 received a check for principle and accrued interest on the US. Treasury bills that matured on July 29 15 received an 0.85 per share cash dividend on the Gem Co. stock. 28 solid 4,000 shares of Gem Co. stock at $ 30 per share less a $450 brokerage fee. Oct.1 received a $ 1.90 per share cash dividend on the PepsiCo shares Dec. 15 received a $ 1.05 per share cash dividend on the remaining Gem Co shares. Dec 31 received a $1.30 per share cash dividend on the PepsiCo shares. How do these short term investments affect Perry's (A) income statement for year 2011 (B) the equity section of its balance sheet at year end 2011? "
Question 5
As a low-fare airline, Southwest Airlines constantly focuses on ways to improve the ef?ciency of its operations and maintain a cost structure below that of its competition. In the spring of 2002, Scott Topping, the director of corporate, was approached by Aviation Partners Boeing (APB) regarding an innovative way to save on fuel costs?the installation of a new technology known as the Blended Winglet.The winglets, made of carbon-graphite, were designed for the Boeing 737-700 aircraft. Southwest currently had 142 planes of this model in its ?eet. The Blended Winglet system was developed by APB, a joint venture between Aviation Partners Inc. and The Boeing Company. The main purpose of the winglet was to reduce turbulence, leading to higher ?ying ef?ciency. As a result, the winglets provided three important bene?ts that allowed the airplane to extend its range, carry a greater payload, and save on fuel consumption. The winglets accomplished this by increasing the spread of the wings? trailing edge and creating more lift at the wingtips. To complete his ?nancial analysis, Scott had to verify potential costs and bene?ts as well as get the approval of the Maintenance Engineering Department, the Flight Operations Department, and the Facilities Department. However, Scott was well aware that regardless of the potential ?nancial bene?ts, safety was the ?rst priority. This process took several months due to the complexity of the project. After discussing the project with the requisite departments, Scott made the following estimates of the costs and bene?ts of the winglet system to Southwest: ? The winglets, which cost $700,000 a pair, could be installed at an additional cost of $56,000 per aircraft. Installation could be scheduled at each maintenance facility to coincide with regular maintenance. As a result, each aircraft was expected to experience downtime for only one extra day, at a cost of $5,000. ? After considering the short- and long-term effects of the winglets, the Maintenance Engineering Department estimated that, on average, repair costs would average $2,100 yearly per aircraft, due primarily to incidental damage. ? The increased wingspan was expected to allow each of Southwest?s aircraft to ?y up to 115 nautical miles further and to decrease fuel usage by 4% to 6%. This meant that Southwest could expect to save 178,500 gallons of jet fuel per airplane per year. ? Flight Operations23 estimated that the additional lift capability provided by the winglets would reduce Southwest?s costs of using restricted runways, with an estimated savings of $500 per aircraft per year. ? The Facilities Department assessed the effect of the added wingspan on each of the 59 airports Southwest utilized in its current route structure. The department estimated that the necessary facilities modi?cations could be achieved at a onetime cost of about $1,200 per aircraft. ? The Blended Winglet project quali?ed for accelerated tax write-off bene?ts under the Job Creation and Worker Assistance Act of 2002. With a marginal tax rate of 39% and using a seven-year depreciation schedule (see the table below), Southwest would be allowed to depreciate an additional 50% of the project in the ?rst year. ? The Blended Winglet project is expected to have a life of at least 20 years, at the end of which the winglets are expected to have a salvage value of $105,000. Assume a jet fuel cost of $0.80 per gallon and a cost of capital of 9.28% in your analysis. Items other than fuel are expected to escalate at a 3% rate. Conduct the analysis on a per-plane basis. Evaluate the project by analyzing the following: a. Estimate the project's annual project free cash flow (FCF) for each of the next 20 years, as well as the initial cash outflow. b. Calculate the net present value (NPV) and internal rate of return (IRR) of the Blended Winglet project. c. What is the break-even jet fuel cost for the project? What is the break-even fuel savings in gallons for the project, assuming jet fuel costs $0.80 per gallon? d. How sensitive is the Blended Winglet project's NPV to changing assumptions regarding expected future fuel costs and fuel savings? Use scenario analysis to analyze a best-case scenario (jet fuel price of $1.10 per gallon and fuel savings of 214,000 gallons per year) and a worst-case scenario (jet fuel price of $0.50 per gallon and fuel savings of 142,000 gallons per year). e. What potential risks and benefits do you see that are not incorporated into the quantitative analysis? f. What is the impact on the project's NPV or IRR if the winglets have no salvage value? g. Would you suggest Southwest Airlines undertake this project? Why or why not? Attached are the depreciation details for this case.
