Question 1
(please provide work so I can understand how the answer came about) Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelly Couts, who inherited the company. When it was founded over 70 years ago, the company originally repaired radios and other household appliances. Over the years, the company expanded into manufacturing and is now a reputable manufacturer of various electronic items. Jay McCanless, a recent MBA graduate, has been hired by the company's finance department. One of the major revenue-producing items manufactured by Conch Republic is a personal digital assistant (PDA). Conch Republic currently has one PDA model on the market, and sale has been excellent. The PDA is a unique item in that it comes in a variety of tropical colors and is preprogrammed to play Jimmy Buffett music. However, as with any electronic item, technology changes rapidly, and the current PDA has limited features in comparison with newer models. Conch Republic spent $750,000 to develop a prototype for a new PDA that has all the features of the existing PDA but adds new features such as cell phone capability. The company has spent a further $200,000 for a marketing study to determine the expected sales figures for the new PDA. Conch Republic can manufacture the new PDA for $185 each in variable costs. Fixed costs for the operation are estimated to run $5.3 million per year. The estimated sales volume is 74,000, 95,000, 125,000, 105,000, and 80,000 per each year for the next five years, respectively. The unit price of the new PDA will be $480. The necessary equipment can be purchased for $38.5 million and will be depreciated on a 7 year MACRS schedule. It is believed the value of the equipment in 5 years will be $5.4million. As previously stated, Conch Republic currently manufactures a PDA. Production of the existing model is expected to be terminated in two years. If conch Republic does not introduce the new PDA, sales will be 80,000 units and 60,000 units for the next two years, respectively. The price of the existing PDA is $310 per unit, with variable costs of $125 each and fixed costs of $1,800,000 per year. If conch Republic does introduce the new PDA, sales of the existing PDA will fall by 15,000 units per year, and the price of the existing unit will have to be lowered to $275 each. New working capital for the PDAs will be 20 percent of sales and will occur with the timing of the cash flows for the year: for example there is no initial outlay for NWC, but changes in NWC will first occur in year 1 with the first year's sales. Conch Republic has a 35 percent corporate tax rate and a 12 percent required return. 1. What is the payback period of the project 2. What is the profitability index of the project? 3. What is the IRR of the project? 4. What is the NPV of the project?,I really want to learn how you get this. Please show detail on this, I am taking this class online and its hard to learn from the instructor, not much detail from her.,wow, thank you. How are you able to do this? this seems like a crazy hard question. What is your advice for me on how to learn this. I am taking online courses.
Question 2
The questions in this assignment all use Intel (ticker: INTC) as the analysis company. In order to respond to the questions, you will need to use the financial statements on pages 48 to 51 of Intel?s 10-K SEC report for the fiscal year ended December 25, 2010. This report can be obtained from the ?Filings / Search for Company Filings? section of www.sec.gov. Whenever the questions refer to ?FYE 12/2010? they are referring to the fiscal year ended 12/25/2010 which is covered in the above mentioned 10-K report. Whenever the questions refer to ?FYE 12/2011? they are referring to the fiscal year ending in December 2011, assuming this is a future year which has not yet been reported. 1. Define the term ?book value? and state Intel?s book value at the end of its FYE 12/2010. 2. Define the term ?market value? and state Intel?s markets value at the end of its FYE 12/2010. 3. Explain why there is a difference between the two values. 4. State the one account (account title and amount) that explains most of the difference between net income (NI) and cash flow from operations (CFO). 5. Explain why this account is included in one calculation (NI) and not in the other (CFO). 6. One of Intel?s competitors, Advanced Micro Devices (ticker: AMD) reported net income of 7.25%, compare this figure to Intel?s and state if Intel?s figure is favorable or unfavorable to shareholders as compared to AMD?s. 7. Define the term ?current ratio.? Calculate Intel?s current ratio for its FYE 12/2010 and compare it to the same ratio for the prior year. Is the ratio for the FYE 12/2010 better or worse than the prior year?s? 8. Define the term ?days sales in inventory.? Calculate Intel?s days sales in inventory for its FYE 12/2010 and compare it to the same ratio for the prior year. Is the FYE 12/2010 ratio better or worse than the prior year?s? For questions 9 to 12: Intel is forecasting that in FYE 12/2011 it will pay no dividends and it will grow its sales by 25%. Intel expects every single one of its accounts to vary proportionately with sales. Intel is preparing a simple financial planning model for its FYE 12/2011 using only the following accounts: Sales, costs, net income, assets, liabilities and equity. If needed, Intel will take on more debt (but not more equity) to finance its growth in FYE 12/2011. 9. Prepare an income statement for FYE 12/2010 using the same figures as reported in Intel?s 10K but using only the above listed accounts. 10. Prepare a balance sheet FYE 12/2010 using the same figures as reported in Intel?s 10K but using only the above listed accounts. 11. Prepare a pro-forma income statement for FYE 12/2011 considering the assumptions stated above. 12. Prepare a pro-forma balance sheet for FYE 12/2011 considering the assumptions stated above and making sure it is reconciled with the pro-forma income statement (i.e. equity increase = net income). 13. According to its statement of cash flows, Intel paid dividends of $3,503 million during its FYE 12/2010. Define ?dividend payout ratio? and state Intel?s dividend payout ratio for its latest fiscal year. 14. Define ?internal growth rate? and calculate Intel?s internal growth rate assuming Intel plans to maintain the retention ratio it had in its FYE 12/2010. 15. Define ?sustainable growth rate? and calculate Intel?s sustainable growth rate assuming Intel plans to maintain the retention ratio it had in its FYE 12/2010
Question 3
____ 8. What is the third stage in the model that many companies normally use for handling fraud? a. Identification of fraudster d. Fraud incident occurs b. Investigation of the fraud e. Action taken c. Resolution of the fraud ____ 9. A U.S. District Court convicted Sue Johnson of mail fraud in. She does not agree with the judgment rendered by the court. What can she do next? a. Appeal to the Supreme Court d. Appeal to a Probate Court b. Nothing because judgments by U.S. District Courts are final. e. Nothing, as verdicts from the district courts cannot be appealed. c. Appeal the findings in one of 12 circuit courts of appeals ____ ____ 12. What is used in court cases to prove that data has not been adversely affected during analysis? a. Deviation measure d. Arithmetic mean b. Random sampling e. None of the above c. Checksums ____ 13. One way to view the results of multiple indicators is to use a chart called a ____________ . a. Matosas matrix d. summarization chart b. Soundex algorithm e. none of the above c. pareto chart ____ 14. Documents and records are an important control activity. Which of the following statements concerning this activity is true? a. The whole accounting system can function as a documentary control. d. Adequate accountability can exist even in their absence. b. They are poor detective controls. e. None of the above are true. c. They serve as excellent preventive controls. ____ 15. Which of the following environments will be least favorable to fraud? a. Proactive management d. Unreasonable budget expectations b. Perceived inequalities in the organization and inadequate pay e. None of the above c. High employee turnover ____ 16. Research on honesty shows that individuals fall into three groups: (1) those who will nearly always be honest, (2) those who are situationally honest, and (3) those who will always be dishonest. Which of these groups is (are) the biggest? a. Groups 1 and 3 (35% each) d. Group 1 (50%) b. Group 3 (45%) e. None of the above are correct. c. Group 2 (40%) ____ 17. Which of the following observations is TRUE? a. The profiles of most fraud perpetrators are indistinguishable from those of other honest people. d. Research shows that only people with a criminal mind set can commit fraud. b. The demographic characteristics of fraud perpetrators are different from others who don?t commit fraud. e. None of the above are true. c. When fraud does occur, the most common reaction by those around the fraud is confession. ____ 18. Fraud examiners differ from financial statement auditors in that the auditors: a. simply pair up documents to if substantiation is present and is sufficient. d. determine whether the documents are real. b. check whether all aspects of the documentation are in order. e. none of the above. c. determine whether the expenditures make sense. ____ ____ 20. Which of the following is not a "strange" financial statement relationship? a. Decreased volume with decreased cost per unit d. Increased revenues with decreased receivables b. Increased revenues with decreased inventory e. None of the above are c. Decreased inventory with decreased payables ____ 22. Which of the following is true about a motion? a. The motion explains the alleged violation of the law and the monetary expenses or damages sought in the case. d. After the jury has returned a verdict, the defendant cannot file motions to have the verdict set aside. b. A defendant may file a motion for summary judgment only after a case goes to trial. e. None of the above. c. A motion normally opposes the assertions made in a plaintiff?s initial pleading and requests the relief the defendant seeks. ____ 23. Studies indicate legal action against fraudsters is typically taken: a. Less than 25 percent of the time. d. More than 75 percent of the time. b. Less than 50 percent of the time. e. None of the above. c. At least 50 percent of the time. ____ 24. From the list below, which would not be a fraud symptom associated with internal control weaknesses? a. Lack of segregation of duties d. Lack of proper authorization b. Lack of physical safeguards e. Excessive turnover of executives c. Inadequate accounting system ____ 28. Which level in the ethical maturity model can be summarized as ?willingness to pay the price for ethics?? a. Personal ethical understanding d. Ethical positioning b. Application of ethics to business situations e. None of the above. c. Ethical courage ____ 29. All of the following are part of the fraud element triangle except: a. Theft act d. Concealment b. Layering e. All of the above are part of the fraud element triangle. c. Conversion ____ 30. Collection under which type of fidelity bond depends upon unequivocal evidence of employee theft? a. Blanket position bond. d. Name schedule fidelity bond. b. Primary commercial blanket bond. e. None of the above. c. Wall Street bond. ____ 31. One of the disadvantages of Benford's law in detecting fraud is: a. it is only an approximation of whether or not there is actually fraud. It does not reduce the prospects to a small enough number of leads to work with. d. it is very expensive to implement and use. b. that those cases with the lowest probabilities do not match Benford?s law and may need further investigation. e. none of the above. c. potential suspects are more likely to know you are trying to detect fraud than if you use such detection techniques. ____ 32. Who are primarily the injured parties in financial statement fraud? a. Middle management d. Insurers b. Organizations that buy goods or services e. Analysts c. Stockholders ____ 33. Out of the circumstances below, which would be least favorable to fraud? a. Moral decay in upper management d. Outstanding bills at home b. Mandatory vacation time e. All of the above are favorable to fraud c. Economic downturns ____ 34. A company is a victim of a $414 million fraud. At that time its profit margin is 10%. How much additional revenue should the company generate in order to recover the effect on net income? a. $414 million d. $4.14 billion b. $41.4 million e. None of the above. c. $41.4 billion ____ 35. Mark owns a 24-hour convenience store. Lately he has noticed that the liquor inventory purchases have gone up by huge amounts, although sales proceeds from this category haven't increased. He is doubting his two night-shift employees. Which is the best investigative method to uncover such a fraud? a. Concealment investigation d. Inquiry investigation b. Conversion investigation e. None of the above c. Covert operation ____ 36. Accounting anomaly fraud symptoms frequently consist of problems with various data and books of accounts. Which of the following is not one among them? a. Faulty journal entries d. Inaccuracies in ledgers b. Inaccuracies in source documents e. Both a and d. c. Rounding adjustments ____ 37. What are the key characteristics for a low-fraud environment? a. Recognition, remorse, and restitution. d. Rules, consequences, and fear. b. Opportunity, incentive, and rationalization. e. None of the above. c. Honesty, openness, and assistance. ____ 38. Which of the following observations is true about discovery sampling? a. Auditors using this method can always be certain that fraud does not exist in a population of checks. d. It is one of the more difficult statistical sampling variations to understand. b. It deals with the probability of discovering at least one error in a given sample size if the population error rate is a certain percentage. e. None of the above. c. It allows an auditor to generalize and make inferences from the population to the sample. ____ 39. Which of the following proactive fraud detection methods use Benford's Law to identify fraud? a. Vertical analysis d. Digital analysis b. Time trend analysis. e. None of the above. c. Real-time analysis ____ 40. Which of the following observations is true concerning discovery? a. It is the last stage of the civil litigation process. d. It is a series of written questions that specifically identify information needed from the opposing party. b. It is one of the stages in a civil litigation but not in a criminal litigation. e. None of the above are true. c. Frequenty it is the most difficult part of civil litigation because discovery has the potential to be costly and take up a great deal of time. ____ 41. If opportunities or perceived pressures are minimal, a person needs more ________ to commit fraud. a. motivation d. courage b. financial gain e. rationalization c. support from people at workplace ____ 42. If we looked at a summary of the characteristics for a majority of fraudsters, it would look like: a. Those who are uneducated d. Those with criminal records b. Those of other honest people e. None of the above. c. Those who use alcohol and drugs ____ 43. In the past, most frauds were detected: a. by providing ways for people to report suspected fraud. d. by inspecting documentation of transactions to determine if there are irregularities that could indicate fraud. b. by accident. e. None of the above. c. by surveillance and undercover operations. ____ 44. When only a very small amount of money has been embezzled: a. taking no action is the best course of action. d. the company should transfer the perpetrator to a position with more supervision. b. the perpetrator should be prosecuted. e. none of the above. c. the perpetrator should be punished by publishing the details of the fraud in the local newspapers. ____ 45. Although there are multiple approaches to fraud investigation, most investigators tend to rely heavily on ______. a. interviews d. surveillance b. honesty tests e. none of the above. c. invigilation ____ 46. Management fraud is often referred to as: a. stockholder fraud. d. investment fraud. b. financial statement fraud. e. both c and d. c. affinity fraud. ____ 47. The burden of proof in a criminal case must: a. be beyond a reasonable doubt. d. lie with the defendant. b. be the preponderance of knowledge and power. e. both c and d. c. be preponderance of evidence. ____ 48. Which investigation technique usually does not work well in kickback situations? a. Inquiry d. Theft b. Conversion e. None of the above work well c. Concealment ____ 49. Which of the following differentiates lower-level and higher-level trial courts? a. The number of judges. d. Higher-level trial courts are for the purpose of appeals. b. The amounts and the seriousness of the crimes. e. Both a and d. c. Availability of the court. ____ 50. A(n) ____ is a means of securing documents in the other party's possession that are relevant to the issues of the case. a. interrogatory d. request for admission b. subpoena e. none of the above c. production request ____ 51. Which statistical approach is one of the most powerful and yet simple methods for identifying outliers? a. N-grams d. Soundex algorithm b. Time-trend analysis e. None of the above c. Z-score ____ 52. Control activities can be grouped as preventive controls and detective controls. Which of the following is a detective control? a. Independent checks d. Physical safeguards b. Segregation of duties e. None of the above c. System of authorizations ____ 53. Psychological studies have found that the first feelings experienced when a crime is committed (especially the first time) are ____ and ____. a. defensiveness, confession d. anxiety, insomnia b. guilt, fear e. none of the above c. confidence, rationalization ____ 54. Which of the following key activities related to fraud, is the most economical way to reduce losses from fraud? a. Fraud prevention d. Follow-up legal action b. Early fraud detection e. None of the above. c. Fraud investigation ____ 55. Several factors are considered in deciding whether or not to investigate fraud. Which of the following is not one of them? a. Exposure or amount that could have been taken. d. Perceived strength of the predication. b. The signal that investigation or noninvestigation will send to others in the organization. e. Perceived cost of the investigation. c. Preparation of a surveillance log. ____ 56. In large cases that involve investigators, legal counsel, accountants, expert witnesses, and management representatives, coordination can be very difficult. ________ can be useful in such cases. a. CaseMap d. Ringtail b. DatiCon e. None of the above c. Analyst?s Notebook ____ 57. Surveillance is usually used to investigate: a. Conversion possibilities. d. Theft acts. b. Concealment possibilities. e. All of the above. c. Key internal controls. ____ 58. Identify the true statement about detecting fraud using financial statement reports. a. Small frauds may not affect the summarized financial statements significantly to be detected. d. Performing horizontal analysis requires converting the financial statement balances to percentages of total assets or gross sales. b. Before performing a data-driven analysis that targets fraud and corruption in financial statements, all three types of financial statements need to be converted to change statements. e. None of the above. c. Vertical analysis is the most direct method of focusing on changes from period to period. ____ 59. Which of the following statements about accounting systems is incorrect? a. An effective accounting system can almost always effectively prevent "kickbacks." d. Effective accounting systems make it hard to conceal fraud. b. The absence of a good accounting system makes it hard to differentiate between unpremeditated mistakes and fraud. e. All of the above are correct. c. Effective accounting systems give an audit trail that helps to discover frauds. ____ 60. Generally, internal controls are implemented in a corporation to help prevent which element of the fraud triangle? a. Rationalization d. Perceived pressure b. Authorization e. None of the above. c. Perceived opportunity ____ 61. Fraud occurs when perceived pressure, perceived opportunity and rationalization combine. Which of the following is related to the problem of segregation of duties? a. Samantha writes expense checks and Matt collects cash from customers. d. John records receivables and writes off bad debts. b. Steve order office supplies and deposits the company?s checks. e. None of the above. c. Julie records journal entries and orders lunch. ____ 62. Methods for concealment investigation include all but which of the following? a. Audits d. Document examination b. Honesty testing e. None of the above c. Computer searches ____ 63. Fraud in companies such as WorldCom, Enron, Waste Management are examples of: a. Customer fraud. d. Management fraud. b. Investment scams. e. Both b and c. c. Vendor fraud. ____ 64. All of the following factors can be linked to increased amounts of fraud and a negative work environment except: a. low turnover. d. lack of recognition of job performance. b. unrealistically low pay. e. All of the above are factors. c. top management that ignores the behavior of employees. ____ 65. Poor credit could become a ____ that could lead to fraud. a. Financial pressure c. Perceived opportunity b. Rationalization d. All of the above. ____ 66. The _____ is the overall tone of the organization that management establishes by the example it sets, the way it organizes the company and by the way it communicates, etc. a. support network d. control environment b. risk mitigation channel e. none of the above c. detection framework ____ 67. Which of the following is not an element of a good control environment? a. Modeling d. Trust b. Management's ability to communicate e. All of the above are elements of a good control environment. c. Suitable screening of employees before hiring. ____ 68. Preventive controls that provide a possibility of early fraud detection include: a. documents and records. d. independent checks. b. lack of proper authorization e. all of the above are preventative controls that provide a possibility of early fraud detection. c. segregation of duties. ____ 69. According to the study mentioned in the text, people who commit fraud are most similar to which of the following groups? a. College students d. Police officers b. Property offenders e. None of the above. c. Petty offenders. ____ 70. Which of the following is NOT a common rationalization of fraud perpetrators? a. I don?t deserve more. d. No one will get hurt b. I'm only borrowing the money e. All of the above are common rationalizations. c. The organization owes me ____ 71. Which of the following observations concerning occupational fraud is NOT true? a. It is committed for an indirect economic advantage to the employee. d. It always involves two or more employees. b. It costs the employer revenues and/or assets. e. It can be committed for a direct economic advantage to the employee. c. Normally it is surreptitious. ____ 72. Developing and promoting a well-defined corporate code of conduct is related to which element of the fraud-fighting model? a. Proactive fraud detection d. Tone at the top b. Education & training e. None of the above c. Investigation & follow-up ____ 73. What most weakens an expert?s credibility? a. Appearing pompous or aggressive. d. Boring the jury with long, overly detailed answers. b. Not being prepared and/or being unfamiliar with the facts of the case. e. All of the above. c. Bringing notes, work papers, or other material to the witness stand. ____ 74. A ______ is a request by one of the parties to have the court decide all or a part of the lawsuit should be dismissed because there are not any disputeable issues of fact. a. motion for summary judgment d. motion for evidence suppression b. motion for settlement e. none of the above c. motion for trial and appeal ____ 75. What is the general order of occurrence for a civil trial? a. Investigation and pleadings; discovery; motion practice and negotiation; trial and appeals. d. Trial and appeals; investigation and pleadings; discovery; motion practice and negotiation. b. Motion practice and negotiation; investigation and pleadings; discovery; trial and appeals. e. None of the above. c. Discovery; investigation and pleadings; trial and appeals; motion practice and negotiation.
Question 4
I'm re-submitting with an extended due date of 9-10pm... is that okay? I have attached a file with the problem and questions. A text version of the questions alone is also provided as follows: 1. Assuming the company continues its current growth rate, what is the value per share of the company's stock? 2. To verify their calculations, Ragan, Inc. has hired an equity analyst familiar with the HVAC industry who has examined Ragan Inc.'s financial statements as well as those of its competitors. Although Ragan, Inc. currently has a technological advantage, the consultant's research indicates that other companies are investigating methods to improve efficiency and the consultant believes that Ragan's technological advantage will only last for the next five years. After that period, the company's growth will likely slow to the industry growth average. Additionally, the consultant believes that the required return used by Ragan, Inc. is too high and that the average required return rate is more appropriate. Under this growth rate assumption, what is your estimate of the stock price? 3. What is the industry price-earnings ratio? What is the price-earnings ratio for Ragan, Inc.? Is this the relationship you would expect between the ratios? Why or why not? 4. Carrington and Genevieve are unsure how to interpret the price-earnings ratio but have come up with the following expression: P0 = 1 - b -- ------------ E1 R - (ROE x b) Beginning with the constant dividend growth model, verify this result. What does this expression imply about the relationship between the dividend payout ratio, the required return on the stock, and the company's ROE? 5. Assume the company's growth rate slows to the industry average in five years. What future return on equity does this imply, assuming a constant payout ratio? 6. After discussing the stock value with the consultant, Genevieve and Carrington agree that they would like to increase the value of the company stock. Like many small business owners, they would like to retain control of the company, but they do not want to sell stock to outside investors. They also feel that the company's debt is at a manageable level and do not want to borrow more money. How can they increase the price of the stock? Are there any conditions under which such an action would not increase the stock price? Explain.
Question 5
Please do the attach. Thank you Lemmon Co.'s March 31 inventory of raw materials is $170,000. Raw material purchases in April are $310,000 and factory payroll cost in April is $224,000. Overhead costs incurred in Apri are: indirect material,$25,000; indirect labor, $19,000; factory rent,$25,000; factory utilities, $13,000; and factory equipment depreciation,$41,000. The predetermined overhead rate is 6% of direct labor cost. Job 306 is solid for $400,000 cash in April. Costs of the three jobs worked on in April follow. Job 306 Job 307 Job308 Balance on March 31 Direct material.......$ 9,000 $17,000 Direct labor.......... 19,000 5,000 Applied overhead...... 12,350 3,250 Costs durning April Direct materials...... 75,000 160,000 $ 65,000 Direct labor.......... 31,000 74,000 100,000 Applied Overhead....... ? ? ? Status on April 30..Finish(sold)Finish(unsold)In process ________________________________________________________ Required: 1. Determine the total each production cost incurred for April(direct labor,direct materials, and applied over head), and the total cost assigned to each job(including the balance from March 31). 2. Prepare journal entries for the month of April to record the following. a. Materials purchases (on credit), factory payroll(paid in cash), and actual overhead costs including indirect materials and indirect labor.(Factory rent and utilities are paid in cash.) b. Assignment of direct materials, direct labor, and applied overhead costs to the Goods in process Inventory. c. Transfer of jobs 306 and 307 to the Finished Goods Inventory. d. cost of goods sold for Job 306. e. Revenue from the sale of Job 306. f. Assignment of any underapplied overhead to the Cost of Goods Solds account.(The amont is not material.) 3. Prepare a manufacturing statement for April (use a single line presentation for direct materials and show the details of overhead cost). 4. compute gross profit for April. show how to present the inventories on the April 30 balance sheet. Analysis Component 5. The over-or underapplied overhead is closed to Cost of Goods Sold. Discuss how this adjustment impacts business decision making regarding individual job or batches of jobs
