Question 1
Why is maximization of the current value per share a more appropriate financial management goal than profit maximization? (Points: 3) Because by maximizing the current stock value you also maximize the company?s profit for the year. Because this criterion is non-ambiguous. Because financial managers always act in the best interest of shareholders. B and C 2. (TCO 1) Market values reflect which of the following: (Points: 3) The amount someone is willing to pay today for an asset. The value of the asset based on generally-accepted accounting principles. The asset?s historical cost. A and B only 3. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows: Cost of goods sold............................... $1.2 million Administrative expenses........................ $250,000 Marketing and selling expenses............... $175,000 Depreciation........................................ $500,000 Interest expense.................................. $200,000 Dividends paid..................................... $150,000 (TCO 1) Suppose that Sports Baseball has 30,000 shares of stock. What is the dividends per share figure? (Points: 3) 5.0 8.75 5.25 8.50 4. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows: Cost of goods sold............................... $1.2 million Administrative expenses........................ $250,000 Marketing and selling expenses............... $175,000 Depreciation........................................ $500,000 Interest expense.................................. $200,000 Dividends paid..................................... $150,000 (TCO 1) Assuming a tax rate of 30%, what is the EBIT and taxable income for the year? (Points: 3) $1,000,000 and $800,000 respectively $575,000 and $375,000 respectively $565,000 and $365,000 respectively $425,000 and $225,000 respectively None of the above 5. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows: Cost of goods sold............................... $1.2 million Administrative expenses........................ $250,000 Marketing and selling expenses............... $175,000 Depreciation........................................ $500,000 Interest expense.................................. $200,000 Dividends paid..................................... $150,000 (TCO 1) Select all items that will be included in Sports Baseballs, Inc. Balance Sheet. For this exercise you will be choosing more than one option for your answer: (Points: 3) Accounts receivable Cost of goods sold Net working capital Interest expense Taxes Current assets Notes payable Cash on hand Consulting revenues 6. (TCO 1) Which one of the following activities best exemplify working capital management. For this exercise you will be choosing more than one option for your answer: (Points: 6) Identify three good investment opportunities for the firm. Obtain a short-term loan to purchase materials. Assess the level of inventory to be kept on hand. Sale long-term bonds to raise funds for a new machine. Determine the return of a potential project. Calculate the cash flows for a project. Manage payments to suppliers. 7. (TCO 1) Match the following terms with the examples as appropriate: (Points: 4) Matching: Answer Potential Matches: : Insider trading 1: McDonald's work to redesign packaging items with recyclable materials. 2: Microsoft's monopolistic behavior. 3: Martha Stewart's sale of ImClone stock as result of information provided by the company's CEO before an announcement was made public that significantly decrease ImClone's stock price. 4: Parmalat's deliberate fraudulent accounting practices. 5: established an oversight board responsible for improving auditing standards within companies. : Social responsibility : Sarbanes-Oxley Act : Fraud : Antitrust case 8. (TCO 1) Which incentives do managers have to act in the stockholder's interest? Name two and explain each in one or two sentences. (Points: 5),I am sorry , I have two questions that are a bit different, IF you can add these questions, I will give a tip, thank you: 4. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows: Cost of goods sold............................... $1.2 million Administrative expenses........................ $250,000 Marketing and selling expenses............... $175,000 Depreciation........................................ $500,000 Interest expense.................................. $200,000 Dividends paid..................................... $150,000 (TCO 1) Assuming a tax rate of 30%, what is the operating cash flow for the year? (Points: 3) $1,260,000 $962,000 $962,500 $1,265,000 Can not be determined with the information given 5. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows: Cost of goods sold............................... $1.2 million Administrative expenses........................ $250,000 Marketing and selling expenses............... $175,000 Depreciation........................................ $500,000 Interest expense.................................. $200,000 Dividends paid..................................... $150,000 (TCO 1) Select all items that will be included in Sports Baseballs, Inc. Income Statement. For this exercise you will be choosing more than one option for your answer: (Points: 3) Accounts receivable Cost of goods sold Net working capital Interest expense Taxes Current assets Short-term loans Cash on hand Inventory 6. (TCO 1) Which one of the following activities best exemplify capital budgeting. For this exercise you will be choosing more than one option for your answer: (Points: 6) Identify three good investment opportunities for the firm. Obtain a short-term loan to purchase materials. Evaluate the level of risk of a project. Sale long-term bonds to raise funds. Determine the return of a potential project.
Question 2
1. Nelly Inc.'s comparative balance sheet at January 31, 2013 , and 2012 , reports the following (in millions): 2013 2012 Total assets $ 40 32 Total liabilities $ 18 8 Calculate the net income (loss) for each situation 2. Assume that the A division of Alien Corporation experienced the following transactions during the year ended December 31, 2013 : a.Suppose division A supplied copy services for a customer for the discounted price of $252,000. Under normal conditions they would have provided these services for $294,000. Other revenues totaled $59,000. b. Salaries cost the division $20,000 to provide these services. The division had to pay employees overtime occasionally. Ordinarily, the salary costs for these services would have been $18,100. c. All other expenses excluding income taxes, $249,000 for the year. Income tax expense was 33% of income before tax. d. The A division has two operating subdivisions: basic retail and special contracts. Each subdivison is accounted for separately to indicate how well each if performing. However, the A division combines the statements of all subdivisions to show results for the A division as a whole. e. Inflation affects the amounts that the a division must pay for copy machines. To show the affects of inflation, net income would drop by $5,000. f. If the A division were to go out of business, the sale of its assets would bring in $141,000 in cash. Prepare the A division's income statement for the year ended December 31,2013. For items a through f, explain the accounting concept , assumption, or principle that provides guidance in accounting for the item. State how you have applied the concept, assumption or principle in preparing the income statement. 3. Andrea Hutchinson is a realtor. She organized her business as a corporation on August 16, 2013. The business received $75,000 cash from Hutchinson and issued common stock. Consider the following facts as of August August 31st 2013. a. Hutchinson has $20,000 in her personal bank account and $74,000 in the business bank account. b. Hutchinson owes $2,000 on a personal charge account with Banana Store. c. Hutchinson acquired business furniture for $44,000 on August 24. Of this amount, the business owes $37,000 on accounts payable at August 31. d. Office supplies on hand at the real estate office total $8,000. e. Hutchinson's business owes $41,000 on a note payable for some land acquired for a total price of $115,000. f. Hutchinson's business spent $24,000 for a Realty franchise, which entitles her to represent herself as an agent. Hometown Realty is a national affiliation of independent real estate agents. This franchise is a business asset. g. Hutchinson owes $90,000 on a personal mortgage on her personal residence, which she acquired in 2003 for a total price of $420,000. Prepare the balance sheet of the real estate business of Andrea Hutchinson Realtor Inc., at August 31, 2013. Does it appear that the realty business can pay it's debts? How can you tell? Identify the personal items given in the proceeding facts that would not be reported on the balance sheet of the business. 4. The following data come from the financial statements of The Fun in the Sun Company for the year ended May 31, 2013 (in millions). Data Table Purchase of property, plant and equipment...$3,510 Net Income...3,050 Adjustments to reconcile net income to net cash provided by operating activities...2,350 Revenues...59,100 Cash beginning of the year $270, end of year...1,930 Cost of goods sold...37,550 Other investing cash payments...$185 Account receivable...850 Payment of dividends...290 Common stock...4,800 Issuance of common stock...195 Sales of property, plant and equipment...50 Retained earnings...12,950 Prepare a cash flow statement for the year ended May 31, 2013. What activities provided the largest source of cash? Is this a sign of financial strength or weakness?
Question 3
The controller of Pratesh Company is gathering data to prepare the cash budget for July. He plans to develop the budget from the following information: a. Of all sales, 35 percent are cash sales. b. Of credit sales, 60 percent are collected within the month of sale. Half of the credit sales collected within the month receive a 2 percent cash discount (for accounts paid within 10 days). Twenty percent of credit sales are collected in the following month; remaining credit sales are collected the month thereafter. There are virtually no bad debts. c. Sales for the second two quarters of the year follow. (The first three months are actual sales, and the last three months are estimated sales.) Sales ($) April ??????..450,000 May ??????...580,000 June ??????...900,000 July ??????.1,140,000 August ????...1,200,000 September ???..1,134,000 d. The company sells all that it produces each month. The cost of raw materials equals 22 percent of each sales dollar. The company requires a monthly ending inventory equal to the coming month?s production requirements. Of raw materials purchases, 50 percent are paid for in the month of purchase. The remaining 50 percent is paid for in the following month. e. Wages total $105,000 each month and are paid in the month incurred. f. Budgeted monthly operating expenses total $336,000, of which $45,000 is depreciation and $6,000 is expiration of prepaid insurance (the annual premium of $72,000 is paid on January 1). g. Dividends of $130,000, declared on June 30, will be paid on July 15. h. Old equipment will be sold for $25,200 on July 4. i. On July 13, new equipment will be purchased for $173,000. j. The company maintains a minimum cash balance of $20,000. k. The cash balance on July 1 is $27,000. Required: Prepare a cash budget for July. Give a supporting schedule that details the cash collections from sales.
Question 4
Activity Instruction To complete this assignment, use to the "Honeymoon Destinations" reading from your studies for this unit, and the Honeymoon Destinations Codebook Excel file and the Honeymoon Destinations Codebook Errata document linked in the Resources. Note that there are three discrepancies between the data in the case codebook from the reading and the data in the Honeymoon Destinations Codebook Excel file. These exceptions are outlined in the Honeymoon Destinations Errata document. Conform to the Excel file from the Resources for the actual data for this assignment. Suppose that Todd Bobzien and Clayton Rose have engaged you to analyze the data they gathered via their direct-mail survey. The responses of the 91 people who returned the survey are represented in the 54 variables in the Honeymoon Destinations Codebook Excel file. (Refer to the data codebook in the "Honeymoon Destinations" reading for an explanation of what each of the variables appearing in the spreadsheet represents.) Bobzien and Rose have some ideas that they would like you to investigate: 1. They believe that people with higher incomes would be more likely both to be interested in a video about potential honeymoon destinations, and to be willing to pay more for such videos. They want you to determine what the data indicate about this. 2. They also believe that individuals with higher incomes (in the top half of annual income levels, nationwide) have different interests than those with lower incomes, and they would like to target those with higher incomes. Bobzien and Rose want you to determine what attributes of a video would interest that higher-income group; specifically: o Which destinations interest them most? o What characteristics of resorts interest them most? o How many resorts do they want to see on a video? 3. In the beginning, they need to focus their marketing and distribution to as few channels as possible, and they want to know what the very best channels would be, based on what the data suggests. 4. Clayton believes that the individuals in their target group (those with higher incomes) would be willing to spend at least fifteen dollars on a video, and he wants you to test that hypothesis. 5. Todd is less interested in testing a hypothesis than he is in developing an estimate for what people would be willing to pay. He would like 95% confidence intervals for the average price people would be willing to pay: one for the higher-income group, one for the lower-income group. 6. They both want to know what family member typically does the research about possible honeymoon destinations, and who primarily makes the decision on selecting the destination. Analyze the 91 survey responses to provide answers to Todd's and Clayton's questions. Write a management report that contains your findings and recommendations. Complete your report in a Word document, copying in whatever Excel output and graphics you need to support your report. This output may be placed within the text or in appendices, but it must be legible and suitable for inclusion in a management report. Refer to the Case Analysis and Report Scoring Guide prior to submission to ensure you meet all evaluation criteria. Submit your case analysis and report for grading and instructor feedback.,Additional file attached
Question 5
Dear Tutor, Please answer the 4 questions stated below. Question 1 (Word limit: 1,000 words) Futurist World Ltd is a leading Australian software company based in Melbourne. It has long been coveting the huge software market in China. Robin Lipton, the CEO of Futurist World Ltd, is keen to set up a business structure in China as soon as possible. To make sure that the company makes the right decision on its China plan, he wants succinct answers to the following questions: What is China?s policy toward foreign investment in terms of entry mode, location entry and industry entry? Which business structure (an equity joint venture, a cooperative joint venture, or a wholly foreign owned company) is better for Futurist World Ltd to do business in China, and why? Under China?s current Anti-Monopoly Law, how are mergers and acquisitions involving foreign investors regulated? Question 2 (Word limit: 500 words) China's new Labour Contract Law is the most significant reform to the law of employment relations in more than a decade. It was promulgated by the Standing Committee of the National People?s Congress on 29 June 2007 following highly contentious debates over the terms of earlier drafts - debates involving not only a range of Chinese parties, but also international business lobbyists and labour organisations. On the one hand, there is an urgent need for better protection of workers? rights in order to maintain the social and political stability. On the other hand, the implementation of this law might increase labour costs, making production in China more expensive and forcing many businesses to shut down. The Labour Contract Law represents a compromise between the competing demands of business and labour. How responsive is the new Labour Contract Law to areas of concern identified by various stakeholders? What contribution does the new law make to social stability? Question 3 (Word limit: 500 words) Chelsea and John are the shareholders and directors of a company registered in Beijing, China. They each own 50% of the shares in the company. The company constitution does not contain dispute resolution mechanisms. In recent months, they have a major dispute over profit allocation. Chelsea wants to take the matter to the People?s Court; John wants to go to arbitration while both their families suggest that they work it out through mediation. Compare mediation, arbitration and litigation and advise them on the best method for dispute resolution. Question 4 (Word limit: 1,000 words) China is a country that celebrates hard work and success in business. To be successful, companies face enormous competition to get to the top and stay there. Effective corporate governance plays an important role in helping companies to survive and thrive in an increasingly competitive environment. Chinese regulatory bodies have made considerable efforts to improve the corporate governance of listed companies. However, corporate governance in practice is still problematic. What are the major corporate governance problems and enforcement issues faced by Chinese listed companies? Why is it difficult to solve these problems? What are your own suggestions for making corporate governance more effective in China? Require: ? Please use Harvard referencing style for the references. (only need in-text referencing, do not need reference list) ? Please use following relevant sources (see the attachments); do not research beyond these sources.
