Mastering WGU D630 – Designing Curriculum and Instruction I

Introduction

WGU D630 – Designing Curriculum and Instruction I is a foundational course in WGU’s education programs, focusing on curriculum development and instructional strategies. For WGU D630 tips, how to pass WGU D630, or WGU D630 Reddit insights, this guide draws from Reddit, WGU forums, and student communities to help you succeed.

This course is essential for educators aiming to design effective curricula for diverse learners. Let’s get started!

Course Description

WGU D630 covers curriculum planning, instructional design, and alignment with educational standards. Worth 3 competency units (CUs), it involves creating lesson plans and curriculum frameworks.

In practice, this course prepares you for roles like curriculum developer or classroom teacher, ensuring student-centered learning. For more details, see WGU’s education program guide here.

Useful Resources & Tips

Based on WGU D630 Reddit discussions and WGU forums, here are key resources:

  • DocMerit: Guides on curriculum planning and lesson design (DocMerit).
  • Stuvia: Notes on aligning curricula with standards (Stuvia).
  • Studocu: Shared lesson plan examples (Studocu).
  • Quizlet: Flashcards for terms like Bloom’s Taxonomy and curriculum alignment (Quizlet).
  • YouTube Tutorials: “Teach Like a Champion” for instructional strategies (Teach Like a Champion).
  • WGU Cohorts: Sessions for feedback on curriculum drafts.
  • Reddit Communities: r/WGUTeachersCollege for WGU D630 Reddit tips (r/WGUTeachersCollege).

Tip: Use Bloom’s Taxonomy to create measurable learning objectives.

Mode of Assessment

WGU D630 is assessed through Performance Assessments (PAs), requiring you to develop curriculum plans and lesson designs aligned with standards.

Common Challenges

Feedback from WGU D630 Reddit and forums highlights:

  • Aligning curriculum with state or national standards.
  • Creating engaging and measurable lesson objectives.
  • Meeting detailed rubric requirements for PAs.
  • Limited WGU D630 Reddit discussions, but education forums provide insights.

The course requires precision in planning and alignment.

How to Pass Easily

Student-tested strategies from WGU D630 Reddit to pass WGU D630:

  1. Use Bloom’s Taxonomy to structure learning objectives.
  2. Review WGU rubrics to ensure alignment with standards.
  3. Watch Teach Like a Champion videos for instructional tips.
  4. Attend WGU cohorts for feedback on drafts.
  5. Submit early drafts to instructors for revisions.
  6. Use Quizlet to master curriculum design terms.

With these WGU D630 tips, most students complete the course in 2-4 weeks.

Conclusion

WGU D630 builds your skills to design effective curricula. By leveraging resources and focusing on alignment, you’ll pass the PAs and create impactful learning experiences. Stay strategic—your curricula shape futures! For more guides, see all WGU course guides here.

FAQ

Is WGU D630 hard?
WGU D630 can be challenging due to alignment requirements, but templates and frameworks make it manageable.
How long does WGU D630 take?
Most students complete WGU D630 in 2-4 weeks with focused effort.
Is WGU D630 an OA or PA?
WGU D630 is assessed through Performance Assessments (PAs).
What are the key topics on the exam?
No exam; key topics include curriculum planning, instructional design, and standards alignment.
What’s the best way to study for WGU D630?
Use Bloom’s Taxonomy, watch Teach Like a Champion, attend cohorts, and submit drafts early.

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Question 1

The three major human resources management responsibilities are: attracting a quality workforce, developing a quality workforce, and maintaining a quality workforce. Research an organization with which you are familiar that is in need of a change. Based on the organization you have selected and the major human resources management responsibilities, create a PowerPoint presentation of 12-15 slides (including title and reference slides) in which you address the following questions: What organization have you selected and what needs to be changed? Why does this change need to occur? What may be the consequences if this change does not occur? How should this organization attract, develop, and maintain the workforce required to bring about your proposed change? Discuss at least one of the following about attracting a quality workforce to support the change: human resource planning, recruitment, or selection. Discuss at least one of the following about how to develop a quality workforce to support the change: employee orientation, training and development, or performance appraisal. Discuss at least one of the following about how to maintain a quality workforce to support the change: career development, work-life balance, compensation and benefits, employee retention and turnover, or labor-management relations. The presentation should also integrate appropriate connections to the broader course materials and a faith/worldview-based component. Clearly demonstrate how that worldview informs the group?s management practice. Include at least four academic references for this assignment to support your position. One of them should relate to the company discussed in your paper. Include slide notes with your presentation.

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Question 2

1. When auditing financial statements of a private company, the minimum work an auditor must perform in connection with a company's internal control is best described by which of the following statements: a. Perform exhaustive tests of accounting controls and evaluate the company's control system effectiveness b. Determine whether the company's control policies are designed well enough to prevent material errors c. Prepare auditing working papers documenting the understanding of the company's internal control d. Design procedures to search for significant deficiencies in the actual operation of the company's internal control 2. If the amount of a check is altered by an employee after it has cleared the bank, the change can be detected by a. Comparing the amount written on the check face to the amount written in the cash disbursements journal b. Comparing the magnetic imprint of the amount paid to the amount written on the check face c. Examining the endorsement on the back of the check d. Comparing the check number on the face of the check to the check number in the cash disbursements journal 3. Which of the following is an example of the accuracy control assertion for sales invoices? a. Recorded sales in the sales journal are supported by invoices b. Invoices, shipping documents, and sales orders are prenumbered and the numerical sequence is checked c. Sales are recorded in the proper account d. Invoice quantities are compared to shipment and customer order quantities 4. A customer reply on a positive confirmation says "We dispute the $250 charge. We believe it is excessive." This confirmation a. Provides evidence of existence b. Does not provide evidence of existence because the customer may refuse to pay the $250 charge c. Provides evidence that the account was understated d. Provides evidence that the account should be written off 5. Which of the following is not a purpose of the review of audit documentation by a supervisor during field work? a. To ensure that all appropriate steps in the audit program were performed b. To ensure that referencing among audit documentation is clear c. To ensure that the explanations included in the audit documentation are understandable d. To ensure that the overall scope of the audit was appropriate 6. Long and Short, CPAs, were auditing Island Corporation for the year ended December 31, 2008. On January 11, 2009, a major customer of Island Corporation declared bankruptcy as the result of an uninsured loss due to a major fire in their warehouse on January 8, 2009. As a result, a material accounts receivable from the customer was determined to be uncollectible. Long and Short, CPAs, would expect the client to a. Record the loss on uncollectible accounts as a routine transaction in the year 2009 b. Treat the loss as a Type II event and provide a footnote about the loss in the 2008 financial statements c. Treat the loss as a Type I event and adjust the 2008 financial statements to record the loss on uncollectible accounts d. File a lawsuit against the customer in hopes of collecting some of the money owed to the client 1. Below are the nine ASB management assertions. A. Occurrence B. Completeness C. Rights and obligations D. Allocation or valuation E. Classification F. Existence G. Cutoff H. Accuracy I. Understandability For each of the following control procedures, identify the management assertion that applies by placing the correct letter in the blank. 1. Match shipping documents with sales invoices before a sale is recorded. 2. Balance total of individual customers' receivables with the control account. 3. Sales manager approves taking discounts. 4. Computer check for billing the quantity shipped, list price, and total. 5. Account for numerical sequence of prenumbered shipping documents. 2. Auditors are auditing the cash receipts for Great Wall Corporation. For each audit procedure performed (numbered 1 - 5 below) select the control objective being tested by placing the correct letter in the blank. A. Existence B. Completeness C. Authorization D. Accuracy E. Classification F. Accounting and posting G. Proper period 1. For a sample of recorded cash receipts, the auditors compared the date of receipt to the recording date. 2. The auditors traced a sample of daily cash reports to the cash receipts journal. 3. The auditors vouched a sample of recorded cash receipts to the deposits in the bank statement. 4. The auditors recalculate the cash listed on the daily deposit for a sample of recorded cash receipts. 5. The auditors traced a sample of recorded cash receipts to postings in the correct customers' accounts. 3. For each of the tests of controls for sales and receivables, indicate the control assertion by placing the correct letter in the blank. A. Occurrence B. Completeness C. Cutoff D. Accuracy E. Classification 1. Scan sales invoices for missing numbers in sequence. 2. Perform arithmetic recalculation of a sample of recorded sales invoices. 3. For a sample of recorded sales invoices from the sales journal, determine whether credit was approved. 4. Trace a sample of credit memos to postings in customers' accounts. 5. Select a sample of customer accounts and vouch debits to supporting sales invoices. 4. Match the number of the applicable audit procedure with the objective. I. Audit procedures for revenues: 1. Select a sample of shipping documents, and identify those for which no related invoice exists. 2. Select a sample of entries in the sales journal and compare with the related shipping documents. 3. Select a sample of entries in the sales journal and compare with the related invoices. 4. Select a sample of shipping documents, and identify those for which no related cash receipt exists. 5. Select shipping documents from just after year-end and verify that the related sale is included in the sales register. 6. Select shipping documents from just before year-end and verify that the related sale is included in the sales register. 7. Select shipping documents from just before year-end and verify that the related sale is excluded from the sales register. Objectives # a. Verify that recorded sales are valid. b. Verify that all valid ales were recorded. c. Test for proper cutoff of sales. d. Test for overstatement of receivables. II. Audit procedures for Expenditures 1. Select a sample of entries in the cash disbursements journal and compare with related voucher packages. 2. Select a sample of voucher packages and verify proper cancellation. 3. Select a sample of voucher packages, and identify those for which no cash disbursement exists. 4. Select a sample of cash payments made after year-end, and identify those for which there is no related purchase order. 5. Select a sample of cash payments made before year-end and identify those for which there is no related purchase order. 6. Select a sample of cash payments made after year-end and identify those for which there is no related year-end payable. 7. Select a sample of cash payments made before year-end, and identify those for which there is no related payable. Objectives # a. Test for understatement of accounts payable. b. Verify that cash disbursements were properly authorized. 5. Match the number of the shenanigan an auditor would be alert to if he or she saw the listed warning signs (a-e): Shenanigans: 1. Accelerating discretionary expenses into the current period. 2. Creating reserves and releasing them into income in a later period. 3. Releasing questionable reserves into income 4. Capitalizing normal operating costs, particularly if recently changed from expensing. 5. Improperly inflating the amount included in a special charge. Warning Signs # a. The auditor sees the following account: ?Deferred membership charges.? b. The company has written down its inventory and included a ?strategic repositioning? charge, incurred to revise the way the inventory is carried in its stores. c. The company revised its allowance for doubtful accounts from 5 percent of accounts receivable to 3 percent. d. Operating expenses increased by 35% over the previous year. e. The company created a liability for an anticipated upcoming reorganization last year, but it turned out the reorganization cost less than anticipated, and the company removed 50 percent of the liability it booked for this anticipated cost.

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Question 3

"You have recently been hired as an equity analyst by Wall Street Valuation Consultants and have been assigned the task of valuing the proposed acquisition described in the following press release: Houston, Texas (December 12, 2005) -- ConocoPhillips (NYSE: COP) and Burlington Resources Inc. (NYSE: BR) announced today they have signed a definitive agreement under which ConocoPhillips will acquire Burlington Resources in a transaction valued at $33.9 billion. The transaction, upon approval by Burlington Resources shareholders, will provide ConocoPhillips with extensive, high quality natural gas exploration and production assets, primarily located in North America. The Burlington Resources portfolio provides a strong complement to ConocoPhillips' global portfolio of integrated exploration, production, refining, and energy transportation operations, thereby positioning the combined company for future growth. (Source: http://www.conocophillips.com/NR/rdonlyres/86E7B7A6-B953-4D0D-9B45-E4F1016DD8FD/0/cop_burlingtonpressrelease.pdf) In his letter to ConocoPhillips shareholders contained in the company's 2005 annual report, CEO Jim Mulva described the rationale for the proposed Burlington acquisition as follows: Burlington's near-term production profile is robust and growing, plus Burlington's possesses an extensive inventory of prospects and significant land positions in the most promising basins in North America, primarily onshore. With this access to high-quality, long-life reserves, the acquisition enhances our production growth from both conventional and unconventional gas resources. Specifically, our portfolio will be bolstered by opportunities to enhance production and gain operating synergies in the San Juan Basin of the United States and by an expanded presence and better utilization of our assets in Western Canada. In addition to growth possibilities, these assets also provide significant cash generation potential well into the future. Beyond adding to production and reserves, Burlington also brings well-recognized technical expertise that, together with ConocoPhillips' existing upstream capabilities, will create a superior organization to capitalize on the expanded asset base. We do not anticipate that the $33.9 billion acquisition will require asset sales within either ConocoPhillips or Burlington, nor should it change our organic growth plans for the company. We expect to achieve synergies and pretax cost savings of approximately $375 million annually, after the operations of the two companies are fully integrated. We anticipate immediate and future cash generation from this transaction that will aid in the rapid reduction of debt incurred for the acquisition and go toward the redeployment of cash into strategic areas of growth. Burlington shareholders will vote on the proposed transaction at a meeting on March 20, 2006. (Source: http://wh.conocophillips.com/about/reports/ar05/letter.htm) However, at an analysts' meeting, CEO Mulva hinted that the price ConocoPhillips paid for Burlington might be viewed as high by some: In terms of acquisitions, mergers and acquisitions, it really becomes more and more of a seller's market, and terms and conditions are not that attractive for buyer's. (Source: http://news.softpedia.com/news/ConocoPhillips-Plans-To-Acquire-Burlington-14628.shmtl) Your task is to answer the following basic question: Is Burlington Resources worth the $35.6 billion offered by ConocoPhillips? Although you are new to the exploration and production (E&P) industry, you have quickly learned that the method of multiples, or market-based com parables, and specifically the ratio of enterprise value (EV) to EBITDAX are typically used as benchmarks to value E&P companies. EBITDAX stands for "earnings before interest, taxes, depreciation and amortization, and exploration expenses." EBITDAX differs from EBITDA in that it adds back exploration expenses in addition to depreciation and amortization -- hence the term "EBITDAX." a) Using the method of multiples based on enterprise value to EBITDAX, the P/E ratio, and the enterprise value of EBITDA ratio, what should the acquisition price be for Burlington Resources shares?,Can you reference how you got the Enterprise Value for each of the companies?

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Question 4

As a business manager for your firm, Global Biotechnology, has a new process for Biosynthetic Human Insulin (BHI) is being developed. Since you are in the position of business evaluation for Global, you will be assigned to "take a look" at this job and see if it's a good project. To evaluate the BHI Project, a spreadsheet analysis will be required. Since this project is just now coming to a point of evaluation in R&D, there is not much to go on. Note that you must distinguish between assumptions that you, the business evaluator, must make from those items of information that you would be required to obtain from others to create a defensible recommendation. Since time is of the essence, you will need to decide which items of information are more important than others. R & D has just issued their report on the new Biosynthetic Human Insulin process and plant. They have recommended that Global Biotechnology pursue this project immediately as it appears to have a ?high return?. The preliminary flowsheet has been developed and a first pass capital cost estimate has been issued with the recommendation that Global spend $122 million on the new facility. As business manager you have been asked to evaluate this project and make a recommendation to senior management. Here is the key data (and the only data) in the research division report: Estimated Direct Fixed Capital-$122 million Estimated Initial working capital-$8 million Required Plant capacity at 100%-1500Kg/yr Estimated BHI unit production cost-$41/gram Estimated BHI selling price-$110/gram BHI project return -greater than 35% There is not much to go on here. You will have to start by making appropriate evaluation assumptions. Some important areas that drive evaluations are: 1) Project life 2) Tax life of the assets 3) Corporate tax rate 4) Inflation rate for costs/prices 5) Proportion of fixed cost/variable cost in $41/gram 6) Length of time to build the plant and spending curve (expenditures per year) Although there are many possible evaluation assumptions you can select. For your work to proceed, and to create a common base case, you will use these base case assumptions: 1) Project life-3 years for capital construction, and 15 years of operations for a total scenario of 18 years. 2) Tax life of the assets-composite average 10 years MACRS class. 3) Corporate tax rate-35%. 4) Inflation for all costs/prices-3%. 5) Proportion of fixed to variable cost-75% fixed, 25% variable. 6) Length of time to build-3 years, capex - 30%, 40%, 30%. 7) The sales rate, which is the plant capacity utilization in the initial operating years. You will use 50% of capacity year 1, 75% of capacity year 2 and 100% of capacity in year 3. The initial working capital is the cost of the initial charge of raw materials and work in process supplies, plus the funding of accounts receivable until cash receipts from sales are received. The $8 million is deducted from the first operating year after tax cashflow and is recovered at the end of the project life. Remember to build your spreadsheet with formulas for relevant variables so that if you change assumptions you can let the spreadsheet do the computational work. One last comment about these assumptions: In business, important decisions are made everyday with incorrect and incomplete information. The issue we face is how accurate does our information and resulting assumptions have to be to make correct decisions. Decisions MUST be made on a timely basis. If we wait for all the information to be known, then the decision is history before it is made. Also, we should always be evaluating our assumptions and be prepared to make appropriate corrections as they become necessary.,I need an excel spreadsheet analysis of the following case study. The formulas need to be embedded so I can modify input and get calculated output. Need it by 3pm 6/3 As a business manager for your firm, Global Biotechnology, has a new process for Biosynthetic Human Insulin (BHI) is being developed. Since you are in the position of business evaluation for Global, you will be assigned to "take a look" at this job and see if it's a good project. To evaluate the BHI Project, a spreadsheet analysis will be required. Since this project is just now coming to a point of evaluation in R&D, there is not much to go on. Note that you must distinguish between assumptions that you, the business evaluator, must make from those items of information that you would be required to obtain from others to create a defensible recommendation. Since time is of the essence, you will need to decide which items of information are more important than others. R & D has just issued their report on the new Biosynthetic Human Insulin process and plant. They have recommended that Global Biotechnology pursue this project immediately as it appears to have a ?high return?. The preliminary flowsheet has been developed and a first pass capital cost estimate has been issued with the recommendation that Global spend $122 million on the new facility. As business manager you have been asked to evaluate this project and make a recommendation to senior management. Here is the key data (and the only data) in the research division report: Estimated Direct Fixed Capital-$122 million Estimated Initial working capital-$8 million Required Plant capacity at 100%-1500Kg/yr Estimated BHI unit production cost-$41/gram Estimated BHI selling price-$110/gram BHI project return -greater than 35% There is not much to go on here. You will have to start by making appropriate evaluation assumptions. Some important areas that drive evaluations are: 1) Project life 2) Tax life of the assets 3) Corporate tax rate 4) Inflation rate for costs/prices 5) Proportion of fixed cost/variable cost in $41/gram 6) Length of time to build the plant and spending curve (expenditures per year) Although there are many possible evaluation assumptions you can select. For your work to proceed, and to create a common base case, you will use these base case assumptions: 1) Project life-3 years for capital construction, and 15 years of operations for a total scenario of 18 years. 2) Tax life of the assets-composite average 10 years MACRS class. 3) Corporate tax rate-35%. 4) Inflation for all costs/prices-3%. 5) Proportion of fixed to variable cost-75% fixed, 25% variable. 6) Length of time to build-3 years, capex - 30%, 40%, 30%. 7) The sales rate, which is the plant capacity utilization in the initial operating years. You will use 50% of capacity year 1, 75% of capacity year 2 and 100% of capacity in year 3. The initial working capital is the cost of the initial charge of raw materials and work in process supplies, plus the funding of accounts receivable until cash receipts from sales are received. The $8 million is deducted from the first operating year after tax cashflow and is recovered at the end of the project life. Remember to build your spreadsheet with formulas for relevant variables so that if you change assumptions you can let the spreadsheet do the computational work. One last comment about these assumptions: In business, important decisions are made everyday with incorrect and incomplete information. The issue we face is how accurate does our information and resulting assumptions have to be to make correct decisions. Decisions MUST be made on a timely basis. If we wait for all the information to be known, then the decision is history before it is made. Also, we should always be evaluating our assumptions and be prepared to make appropriate corrections as they become necessary.,When will you have something I can review?,When can i expect to see something for review?,I requested to have an answer by 3pm, it is now past that time and I have nothing. Please advise,If possible, can you have it to me by 10PM eastern?,maybe I am missing something. Is this attached document not just the question information?,i expected a spreadsheet

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Question 5

FIN500 Practice (Chapters 10,11,12,14) Multiple Choice Identify the choice that best completes the statement or answers the question. Exhibit 10-1 (The following data apply to the problem(s) below.) You are employed by CGT, a Fortune 500 firm that is a major producer of chemicals and plastics, including plastic grocery bags, styrofoam cups, and fertilizers. You are on the corporate staff as an assistant to the CFO. This is a position with high visibility and the opportunity for rapid advancement, providing you make the right decisions. Your boss has asked you to estimate the weighted average cost of capital for the company. The balance sheet and some other information about CGT follows below. Assets Current assets $ 38,000,000 Net plant, property, and equipment 101,000,000 Total assets $139,000,000 Liabilities and equity Accounts payable $ 10,000,000 Accruals 9,000,000 Current liabilities $ 19,000,000 Long term debt (40,000 bonds, $1,000 par value) 40,000,000 Total liabilities 59,000,000 Common stock (10,000,000 shares) 30,000,000 Retained earnings 50,000,000 Total shareholders equity 80,000,000 Total liabilities and shareholders equity $139,000,000 You check The Wall Street Journal and see that CGT stock is currently selling for $7.50 per share and that CGT bonds are selling for $875.00 per bond. The bonds have a S1,000 par value, a 7.25% annual coupon rate, semiannual payments, are not callable, and a 20-year maturity. CGT's beta is 1.25, the yield on a 6-month Treasury bill is 3.50%, and the yield on a 20-year Treasury bond is 5.50%. The expected return on the stock market is 11.50%, but the market has had an average annual return of 14.50% during the past 5 years. CGT is in the 40% tax bracket. ____ 1. Refer to Exhibit 10-1. What is the best estimate of the after-tax cost of debt for CGT? a. 4.64% b. 4.88% c. 5.14% d. 5.40% e. 5.67% ____ 2. Refer to Exhibit 10-1. Using the CAPM approach, what is the best estimate of the cost of equity for CGT? a. 13.00% b. 13.52% c. 14.06% d. 14.62% e. 15.21% ____ 3. Refer to Exhibit 10-1. Which of the following is the best estimate for the weights to be used when calculating the WACC? a. wc = 68.2%; wd = 31.8% b. wc = 69.9%; wd = 30.1% c. wc = 71.6%; wd = 28.4% d. wc = 73.4%; wd = 26.6% e. wc = 75.3%; wd = 24.7% ____ 4. Refer to Exhibit 10-1. What is the best estimate of the WACC for CGT? a. 9.88% b. 10.18% c. 10.50% d. 10.81% e. 11.14% ____ 5. Van Auken Inc. is considering a project that has the following cash flows: Year Cash Flow 0 ?$1,000 1 400 2 300 3 500 4 400 The company's WACC is 10%. What are the project's payback, internal rate of return, and net present value? a. Payback = 2.4; IRR = 10.00%; NPV = $600. b. Payback = 2.4; IRR = 21.22%; NPV = $260. c. Payback = 2.6; IRR = 21.22%; NPV = $300. d. Payback = 2.6; IRR = 21.22%; NPV = $260. e. Payback = 2.6; IRR = 24.12%; NPV = $300. ____ 6. Edelman Electric Systems is considering a project that has the following cash flow and WACC data. What is the project's MIRR? Note that a project's projected MIRR can be less than the WACC (and even negative), in which case it will be rejected. WACC: 10.00% Year: 0 1 2 3 Cash flows: ?$800 $350 $350 $350 a. 8.62% b. 9.58% c. 10.64% d. 11.82% e. 13.14% ____ 7. Stewart Associates is considering a project that has the following cash flow data. What is the project's payback? Year: 0 1 2 3 4 5 Cash flows: ?$1,000 $300 $310 $320 $330 $340 a. 2.11 years b. 2.34 years c. 2.60 years d. 2.89 years e. 3.21 years ____ 8. Walker & Campsey wants to invest in a new computer system, and management has narrowed the choice to Systems A and B. System A requires an up-front cost of $100,000, after which it generates positive after-tax cash flows of $60,000 at the end of each of the next 2 years. The system could be replaced every 2 years, and the cash inflows and outflows would remain the same. System B also requires an up-front cost of $100,000, after which it would generate positive after-tax cash flows of $48,000 at the end of each of the next 3 years. System B can be replaced every 3 years, but each time the system is replaced, both the cash outflows and cash inflows would increase by 10%. The company needs a computer system for 6 years, after which the current owners plan to retire and liquidate the firm. The company's cost of capital is 11%. What is the NPV (on a 6-year extended basis) of the system that adds the most value? a. $17,298.30 b. $22,634.77 c. $31,211.52 d. $38,523.43 e. $46,143.21 ____ 9. Fool Proof Software is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, and the MACRS rates for such property are 33%, 45%, 15%, and 7% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year life. What is the operating cash flow for Year 1? Equipment cost (depreciable basis) $65,000 Sales revenues, each year $60,000 Operating costs excl. depr'n $25,000 Tax rate 35.0% a. $30,258 b. $31,770 c. $33,359 d. $35,027 e. $36,778 ____ 10. California Hideaways is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have zero salvage value. No new working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV? (Hint: Cash flows are constant in Years 1-3.) WACC 10.0% Net investment cost (depreciable basis) $65,000 Straight-line depr'n rate 33.3333% Sales revenues, each year $60,000 Operating costs excl. depr'n, each year $25,000 Tax rate 35.0% a. $8,499 b. $8,946 c. $9,417 d. $9,913 e. $10,434 ____ 11. Bing Services is now in the final year of a project. The equipment originally cost $20,000, of which 75% has been depreciated. Bing can sell the used equipment today for $6,000, and its tax rate is 40%. What is the equipment's net after-tax salvage value for use in a capital budgeting analysis? Note that if the equipment's final market value is less than its book value, Bing will receive a tax credit as a result of the sale. a. $5,320 b. $5,600 c. $5,880 d. $6,174 e. $6,483 ____ 12. Moore & Moore (MM) is considering the purchase of a new machine for $50,000, installed. MM will use the MACRS accelerated method to depreciate the machine, which is classified as 5-year property (see the following MACRS table for depreciation rates). MM expects to sell the machine at the end of its 4-year operating life for $10,000. If MM's marginal tax rate is 40%, what will the after-tax cash flow be when it disposes of the machine at the end of Year 4? Ownership Year Depreciation Rate 1 20% 2 32 3 19 4 12 5 11 6 6 a. $7,656 b. $8,059 c. $8,484 d. $8,930 e. $9,400 ____ 13. TexMex Products is considering a new salsa whose data are shown below. The equipment that would be used would be depreciated by the straight-line method over its 3-year life, would have zero salvage value, and no new working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. However, this project would compete with other TexMex products and would reduce their pre-tax annual cash flows. What is the project's NPV? (Hint: Cash flows are constant in Years 1-3.) WACC 10.0% Pre-tax cash flow reduction in other products (cannibalization) $5,000 Investment cost (depr'ble basis) $65,000 Straight-line depr'n rate 33.333% Sales revenues, each year $75,000 Annual operating costs, ex. depr'n $25,000 Tax rate 35.0% a. $25,269 b. $26,599 c. $27,929 d. $29,325 e. $30,792 ____ 14. Easy Payment Loan Company is thinking of opening a new office, and the key data are shown below. Easy Payment owns the building, free and clear, and it would sell it for $100,000 after taxes if it decides not to open the new office. The equipment that would be used would be depreciated by the straight-line method over the project's 3-year life, and would have a zero salvage value. No new working capital would be required, and revenues and other operating costs would be constant over the project's 3-year life. What is the project's NPV? (Hint: Cash flows are constant in Years 1-3.) WACC 10.0% Opportunity cost ?$100,000 Net equipment cost (depreciable basis) $65,000 Straight-line depr'n rate for equipment 33.33% Sales revenues, each year $150,000 Operating costs excl. depr'n, each year $25,000 Tax rate 35.0% a. $47,940 b. $50,464 c. $53,120 d. $55,915 e. $58,711 ____ 15. Dumpe Industries is analyzing an average-risk project, and the following data have been developed. Unit sales will be constant, but the sales price will increase with inflation. Fixed costs will also be constant, but variable costs will rise with inflation. The project should last for 3 years, and there will be no salvage value. This is just one project for the firm, so any losses can be used to offset gains on other firm projects. What is the project's expected NPV? WACC 10.0% Net investment cost (depreciable basis) $100,000 Units sold 40,000 Average price per unit, Year 1 $25.00 Fixed op. cost excl. depr'n (constant) $150,000 Variable op. cost/unit, Year 1 $20.20 Annual depreciation rate 33.33% Expected inflation 5.00% Tax rate 40.0% a. $8,536 b. $8,985 c. $9,458 d. $9,931 e. $10,428 ____ 16. Last year Handorf-Zhu Inc. had $850 million of sales, and it had $425 million of fixed assets that were used at only 60% of capacity. What is the maximum sales growth rate the company could achieve before it had to increase its fixed assets? a. 54.30% b. 57.16% c. 60.17% d. 63.33% e. 66.67% ____ 17. 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 year's sales = S0 $350 Last year's accounts payable $40 Sales growth rate = g 30% Last year's notes payable (to bank) $50 Last year's total assets = A0 $500 Last year's accruals $30 Last year's profit margin = M 5% Target payout ratio 60% a. $102.8 b. $108.2 c. $113.9 d. $119.9 e. $125.9 ____ 18. 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 50%, 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 year's sales = S0 $300.0 Last year's accounts payable $50.0 Sales growth rate = g 40% Last year's notes payable (to bank) $15.0 Last year's total assets = A0 $500.0 Last year's accruals $20.0 Last year's profit margin = M 20.0% Initial payout ratio 10.0% New payout ratio 50.0% a. $31.9 b. $33.6 c. $35.3 d. $37.0 e. $38.9 ____ 19. Last year Emery Industries had $450 million of sales and $225 million of fixed assets, so its FA/Sales ratio was 50%. However, its fixed assets were used at only 65% of capacity. If the company had been able to sell off enough of its fixed assets at book value so that it was operating at full capacity, with sales held constant at $450 million, how much cash (in millions) would it have generated? a. $74.81 b. $78.75 c. $82.69 d. $86.82 e. $91.16 ____ 20. Suppose Leonard, Nixon, & Shull Corporation's projected free cash flow for next year is $100,000, and FCF is expected to grow at a constant rate of 6%. If the company's weighted average cost of capital is 11%, what is the value of its operations? a. $1,714,750 b. $1,805,000 c. $1,900,000 d. $2,000,000 e. $2,100,000 ____ 21. Zhdanov Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be ?$10 million, but its FCF at t = 2 will be $20 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of capital is 14%, what is the firm's value of operations, in millions? a. $158 b. $167 c. $175 d. $184 e. $193 ____ 22. A company forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13%, and the FCFs are expected to continue growing at a 5% rate after Year 3. Assuming that the ROIC is expected to remain constant in Year 3 and beyond, what is the Year 0 value of operations, in millions? Year: 1 2 3 Free cash flow: ?$15 $10 $40 a. $315 b. $331 c. $348 d. $367 e. $386 ____ 23. Rocky Top Car Wash is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over the project's 3-year life, and would have zero salvage value. No new working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. This is just one project for the firm, so any losses can be used to offset gains on other firm projects. If the number of cars washed declined by 50% from the expected level, by how much would the project's NPV change? (Hint: Cash flows are constant in Years 1-3.) WACC 10.0% Net investment cost (depreciable basis) $60,000 Number of cars washed 2,800 Average price per car $25.00 Fixed op. cost excl. depr'n $10,000 Variable op. cost/unit (i.e. per car washed) $5.357 Annual depreciation $20,000 Tax rate 35.0% a. $36,207 b. $38,113 c. $40,119 d. $42,230 e. $44,453 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. To save money for a new house, you want to begin contributing money to a brokerage account. Your plan is to make ten contributions to the brokerage account. Each contribution will be for $1,500. The contributions will come at the beginning of each of the next 10 years, i.e., the first contribution will be made at t = 0 and the final contribution will be made at t = 9. Assume that the brokerage account pays a 9 percent return with quarterly compounding. How much money do you expect to have in the brokerage account nine years from now (t = 9)? a. $23,127.49 b. $25,140.65 c. $25,280.27 d. $21,627.49 e. $19,785.76 ____ 2. You have some money on deposit in a bank account which pays a nominal (or quoted) rate of 8.0944 percent, but with interest compounded daily (using a 365-day year). Your friend owns a security which calls for the payment of $10,000 after 27 months. The security is just as safe as your bank deposit, and your friend offers to sell it to you for $8,000. If you buy the security, by how much will the effective annual rate of return on your investment change? a. 1.87% b. 1.53% c. 2.00% d. 0.96% e. 0.44% ____ 3. You have the choice of placing your savings in an account paying 12.5 percent compounded annually, an account paying 12.0 percent compounded semiannually, or an account paying 11.5 percent compounded continuously. To maximize your return you would choose: a. 12.5% compounded annually. b. 12.0% compounded semiannually. c. 11.5% compounded continuously. d. You would be indifferent since the effective rate for all three is the same. e. You would be indifferent between choices a and c since their effective rates are the same. ____ 4. Corporations face the following corporate tax schedule: Taxable Income Tax on Base Rate $ 0 - $ 50,000 $ 0 15% $ 50,000 - $ 75,000 7,500 25% $ 75,000 - $100,000 13,750 34% $100,000 - $335,000 22,250 39% Company Z has $80,000 of taxable income from its operations, $5,000 of interest income, and $30,000 of dividend income from preferred stock it holds in other corporations. What is Company Z's tax liability? a. $12,250 b. $13,750 c. $16,810 d. $20,210 e. $28,100 ____ 5. The table below contains Bradshaw Beverages' taxable income during each year since it began operations. Notice that the company lost money in each of its first three years. The corporate tax rate has been 40 percent each year. Year Taxable Income (EBT) 2000 ($ 700,000) 2001 ( 500,000) 2002 ( 200,000) 2003 800,000 2004 1,000,000 Assume that current carry back and carry forward provisions were available in prior years. Assuming that the company effectively used the allowed carry back, carry forward provisions of the tax code, how much did the company pay in taxes during the most recent year? a. $160,000 b. $240,000 c. $320,000 d. $520,000 e. $600,000 ____ 6. HR Corporation has a beta of 2.0, while LR Corporation's beta is 0.5. The risk-free rate is 10 percent, and the required rate of return on an average stock is 15 percent. Now the expected rate of inflation built into rRF falls by 3 percentage points, the real risk-free rate remains constant, the required return on the market falls to 11 percent, and the betas remain constant. When all of these changes are made, what will be the difference in the required returns on HR's and LR's stocks? a. 1.0% b. 2.5% c. 4.5% d. 5.4% e. 6.0% ____ 7. Coolidge Cola is forecasting the following income statement: Sales $30,000,000 Operating costs excluding depreciation 20,000,000 Depreciation 5,000,000 Operating income (EBIT) $ 5,000,000 Interest expense 2,000,000 Taxable income (EBT) $ 3,000,000 Taxes (40%) 1,200,000 Net income $ 1,800,000 Assume that, with the exception of depreciation, all other non-cash revenues and expenses sum to zero. Congress is considering a proposal which will allow companies to depreciate their equipment at a faster rate. If this provision were put in place, Coolidge's depreciation expense would be $8,000,000 (instead of $5,000,000). This proposal would have no effect on the economic value of the company's equipment, nor would it affect the company's tax rate, which would remain at 40 percent. If this proposal were to be implemented, what would be the company's net cash flow? a. $2,000,000 b. $4,000,000 c. $6,800,000 d. $8,000,000 e. $9,800,000 ____ 8. Hebner Housing Corporation has forecast the following numbers for this upcoming year: Sales $1,000,000 Cost of Goods Sold 600,000 Interest Expense 100,000 Net Income 180,000 The company is in the 40 percent tax bracket. Its cost of goods sold always represents 60 percent of its sales. That is, if the company's sales were to increase to $1.5 million, its cost of goods sold would increase to $900,000. The company's CEO is unhappy with the forecast and wants the firm to achieve a net income equal to $240,000. Assume that Hebner's interest expense remains constant. In order to achieve this level of net income, what level of sales will the company have to achieve? a. $400,000 b. $500,000 c. $750,000 d. $1,000,000 e. $1,250,000 ____ 9. Sanguillen Corp. showed retained earnings of $400,000 on its balance sheet last year. This year, the company's earnings per share (EPS) were $3.00 and its dividends paid per share (DPS) were $1.00. The company has 200,000 shares of stock outstanding. What is the level of retained earnings on the company's balance sheet this year? a. $400,000 b. $500,000 c. $600,000 d. $700,000 e. $800,000