Question 1
Financial Statement Analysis Objectives | Guidelines | Grading Rubrics | Best Practices Objectives Back to Top To analyze the financial statements of a publicly traded company. Obtain an annual report from a publicly traded corporation that is interesting to you. Be sure the company has property and equipment, intangible assets, and long-term debt on their balance sheet. Using techniques you have learned in the previous weeks, respond to the following questions: What is the amount of property and equipment on the balance sheet for the two most recent years? What is the amount of depreciation expense? What amounts are on the cash flow statement for the most recent year that relate to depreciation, gains and sales of property and equipment, and purchases and sale of property of equipment? What amounts are permitted for inclusion in the capitalized cost of property and equipment? Looking at the footnote disclosures of the company, what are the individual components of property and equipment? For example, what are the amounts for land, building, equipment, accumulated depreciation, and so forth? How do companies account for nonmonetary exchange and dispositions of property and equipment? Does the company have intangible assets? If so what are the types of intangible assets (patent, copyrights, etc.) and their amounts? What is the amount of amortization expense? What amounts on the most recent cash flow statement relate to the purchase and sale of intangible assets? How do intangible assets differ from property and equipment? What costs do we include in intangible assets? Goes the company have goodwill? What are the footnote disclosures relating to goodwill and the related acquisition? Please also describe the calculation of goodwill and how we account for differences between fair value and book value of assets acquired. What are the company's depreciation methods? What is the range of estimated useful lives used for depreciating their assets? Does the company use the same depreciation methods for financial statements and tax returns? If not, please describe the methods used for tax purposes. What are the company's footnote disclosures relating to impairment? Please also describe how to determine if an impairment exists and how to calculate the impairment loss. What are the amounts and descriptions for the company's current liabilities for the most recent year? Does the company have any contingent liabilities? If yes, please describe. What are the three categories of contingent liabilities and the treatment for each type? Does the company have any subsequent events disclosed in their footnotes? If so, please describe them. What are the amounts and descriptions for all of the company's long-term liabilities on their balance sheet for the most recent two years? What is the interest expense for the two most recent years? What amounts are included in the cash flow statements for proceeds from issuance of debt and repayment of debt for the most recent year? For each note payable discussed in the footnotes disclosures, what is the interest rate, total amount borrowed, and maturity date? Does the company have bonds payable? If so, what are the amounts? Please also describe how bonds payable differ from notes payable and how to account for the issuance of bonds at par, at a discount, and at a premium. How is the discount and premium amortized? What is the effective interest method? Does the company have capital leases? If so, what are the amounts and terms of the leases? What are the four criteria for a lease to be considered a capital lease? What are the additional criteria for the lessor? What is the difference between a sales-type lease and a direct financing lease? Guidelines Back to Top Papers must be 7 to 10 pages in length. Use a 10 point font; double space; and include a cover page, table of contents, introduction, body of the report, summary or conclusion, and works cited. Even though this is not a scientific-type writing assignment, references are still very important. At least three authoritative, outside references are required (articles and web pages with anonymous authors are not acceptable). These should be listed on the Works Cited page. Appropriate citation is required. All DeVry University policies are in effect, including the plagiarism policy. Papers are due during Week 6 of this course. Any questions about this paper can be discussed in the weekly Q & A Discussion topic. This paper is worth 155 total points and will be graded on quality of research topic, quality of paper information, use of citations, grammar, and sentence structure. Grading Rubrics Back to Top Category Points % Description Documentation and Formatting 15 10 Organization and Cohesiveness 15 10 Editing 15 10 Content 110 70 Total 155 100 A quality paper will meet or exceed all of the above requirements. Best Practices Back to Top The following are best practices in preparing this paper. Cover Page: Include whom you prepared the paper for, who prepared it, and the date. Table of Contents: List the main ideas and sections of the paper and the pages where they are located. Illustrations should be included separately. Introduction: Use a header on your paper. This will indicate that you are introducing the paper. The purpose of an introduction or opening is to introduce the subject and why the subject is important; preview the main ideas and the order in which they will be covered; and establish the tone of the document. Include in the introduction a reason for the audience to read the paper. Also include an overview of what you will cover and the importance of the material. (This should include or introduce the questions you are asked to answer in each assignment.) Body of the Report: Use a header with the name of the project. An example is, "The Development of Hotel X: A World Class Resort." Proceed to break out the main ideas: State the main ideas, the major points of each idea, and provide evidence. Show some type of division, such as separate, labeled sections; separate groups of paragraphs; or headers. Include the information you found during your research and investigation. Summary and Conclusion: Summarizing is similar to paraphrasing but presents the gist of the material in fewer words than the original. An effective summary identifies the main ideas and the major support points from the body of the report; minor details are left out. Summarize the benefits of the ideas and how they effect the subject. Work Cited: Use the citation format specified in the Syllabus. Additional hints on preparing the best possible project follow. Apply a three step process to writing: plan, write, and complete. Prepare an outline of the research paper before going forward. Complete a first draft and then go back to edit, evaluate, and make any changes required. Use visual communication to further clarify and support the written part of the report. Examples include graphs, diagrams, photographs, flowcharts, maps, drawings, animation, video clips, pictograms, tables, and Gantt charts. Additional Requirements Min Pages: 7 Max Pages: 10 Level of Detail: Only answer needed Other Requirements: Financial Statement Analysis Objectives | Guidelines | Grading Rubrics | Best Practices Objectives Back to Top
Question 2
"Assignment: Write 5 pages on the following: An analysis of your leadership profile using: Psychological Perspectives of Leadership and Leadership Theories ? Be sure to explain how specific perspectives of leadership and leadership theories help to explain your leadership profile. Leadership Approaches (Trait, Skill, Style, and Situation) ? Be sure to include descriptions of traits and skills you possess, your leadership behaviors and style, and professional situations in which you might excel and might be challenged. An evaluation of your strengths, challenges, and limitations in the following areas: Self-management Cognitive Adeptness Interpersonal Adeptness Organizational Acumen Global Leadership Competency An analysis of how you might develop yourself as a leader. Be sure to include descriptions of specific strategies you might use and explain how you might use them to expand or enhance your effectiveness as a leader. An explanation of how you might present yourself as a leader to a future employer in your current profession or in a profession that is of interest to you. An analysis of your potential effectiveness as a leader in your current profession or in a profession that is of interest to you." "Assignment: Write 5 pages on the following: An analysis of your leadership profile using: Psychological Perspectives of Leadership and Leadership Theories ? Be sure to explain how specific perspectives of leadership and leadership theories help to explain your leadership profile. Leadership Approaches (Trait, Skill, Style, and Situation) ? Be sure to include descriptions of traits and skills you possess, your leadership behaviors and style, and professional situations in which you might excel and might be challenged. An evaluation of your strengths, challenges, and limitations in the following areas: Self-management Cognitive Adeptness Interpersonal Adeptness Organizational Acumen Global Leadership Competency An analysis of how you might develop yourself as a leader. Be sure to include descriptions of specific strategies you might use and explain how you might use them to expand or enhance your effectiveness as a leader. An explanation of how you might present yourself as a leader to a future employer in your current profession or in a profession that is of interest to you. An analysis of your potential effectiveness as a leader in your current profession or in a profession that is of interest to you."
Question 3
The weighted average cost of capital for a firm is the: A. Discount rate which the firm should apply to all of the projects it undertakes. B. Rate of return a firm must earn on its existing assets to maintain the current value of its stock. C. Coupon rate the firm should expect to pay on its next bond issue. D. Minimum discount rate the firm should require on any new project. E. Rate of return shareholders should expect to earn on their investment in this firm. The capital structure weights used in computing the weighted average cost of capital: A. Are based on the book values of total debt and total equity. B. Are based on the market value of the firm's debt and equity securities. C. Are computed using the book value of the long-term debt and the book value of equity. D. Remain constant over time unless the firm issues new securities. E. Are restricted to the firm's debt and common stock. Chelsea Fashions is expected to pay an annual dividend of $1.30 a share next year. The market price of the stock is $24.00 and the growth rate is 3 percent. What is the firm's cost of equity (retained earnings)? A. 8.24 percent B. 8.30 percent C. 8.42 percent D. 8.47 percent E. 8.11 percent
Question 4
Assignment 8 Signature Assignment: The Role of a Managerial Accountant During this course, you studied and researched the cost of goods manufactured schedule, cost accumulation systems, Just-in-Time manufacturing, standard costs, target costing, absorption costing and variable costing. Use the case scenario provided in the Main Task below to assess how you may apply these concepts to the role of a managerial accountant. Activity Resources Review: Hilton, R. W. (2011)., all previously assigned chapters as necessary Vance, T. W. (2010). Main Task: Define the Role of the Managerial Accountant Scenario: A manufacturer of containers in Georgia, ACME Enterprises, has an opportunity to build a state-of-the art plant in China. A Chinese partner will provide 40% of the funding in exchange for a 40% ownership in the project if ACME will install a world class cost accounting system. Currently, ACME uses an antiquated normal costing system based on the job order method. Overhead costs are assigned to jobs based on one plant-wide rate that uses direct labor hours as the cost driver to assign factory overhead costs to job orders. The CEO, Bob Bulldog, needs some advice about how to structure the business a recommendation on how to implement a world-class managerial accounting and reporting system. Prepare a paper to address Mr. Bulldog?s concerns, providing specific examples to illustrate and justify your ideas. Support your paper with a minimum of seven (7) scholarly resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included. Length: 12-15 pages not including title and reference pages and any supporting documentation such as Excel spreadsheets Your paper should demonstrate thoughtful consideration of the ideas and concepts that are presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards. Be sure to adhere to Northcentral University's Academic Integrity Policy. Submit your document in the Course Work area below the Activity screen. Save your signature assignment in your e-Portfolio. Also save a copy of your signature assignment to your e-Portfolio which is located on your Student Portal under the My NCU Information area. The e-Portfolio is your personal storage place for artifacts or learning products you produce in this and future Northcentral courses. Collecting your learning products allows you to see your progress as an academic student throughout your Northcentral University career. Learning Outcomes: 5, 6, 7 Assignment Outcomes Design target costing systems. Evaluate income statements under absorption and variable costing. Evaluate the skills needed as a managerial accountant within a business setting. Course Work
Question 5
1. Compact fluorescent lamps (CFLs) have become more popular in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $0.30 and lasts 1,840 hours. A 15-watt CFL, which provides the same light, costs $3.60 and lasts for 9,660 hours. A kilowatt-hour of electricity costs $0.10, which is about the national average. A kilowatt-hour is 1,000 watts for 1 hour. An industrial user in West Virginia might pay $0.04 per kilowatt-hour whereas a residential user in Hawaii might pay $0.25. Required: If you require a 9.50 percent return and use a light fixture 460 hours per year, what?s the break-even cost per kilowatt-hour? 2. To solve the bid price problem presented in the text, we set the project NPV equal to zero and found the required price using the definition of OCF. Thus the bid price represents a financial break-even level for the project. This type of analysis can be extended to many other types of problems. Guthrie Enterprises needs someone to supply it with 144,000 cartons of machine screws per year to support its manufacturing needs over the next 5 years, and you've decided to bid on the contract. It will cost you $748,800 to install the equipment necessary to start production; you'll depreciate this cost straight-line to zero over the project's life. You estimate that in 5 years, this equipment can be salvaged for $48,000. Your fixed production costs will be $230,400 per year, and your variable production costs should be $8.16 per carton. You also need an initial investment in net working capital of $72,000. Your tax rate is 34 percent and you require a 20 percent return on your investment. Assume that the price per carton is $12. (a) The project NPV? (b) Number of cartons supplied per year to break even? (c) If you supply 144,000 cartons per year, how much in fixed costs can you afford and still break even? 3. Compact fluorescent lamps (CFLs) have become more popular in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $0.45 and lasts 420 hours. A 15-watt CFL, which provides the same light, costs $3.40 and lasts for 9,660 hours. Assume a kilowatt-hour of electricity costs $0.101. A kilowatt-hour is 1,000 watts for 1 hour. Required: If you require a 10 percent return and use a light fixture 420 hours per year, what is the equivalent annual cost of each light bulb? EAC for Compact Fluorescent lamps? 60 Watt incandescent light bulb? 4. After extensive medical and marketing research, Pill, Inc., believes it can penetrate the pain reliever market. It is considering two alternative products. The first is a medication for headache pain. The second is a pill for headache and arthritis pain. Both products would be introduced at a price of $5.27 per package in real terms. The headache-only medication is projected to sell 4.18 million packages a year, whereas the headache and arthritis remedy would sell 6.05 million packages a year. Cash costs of production in the first year are expected to be $2.43 per package in real terms for the headache-only brand. Production costs are expected to be $2.64 in real terms for the headache and arthritis pill. All prices and costs are expected to rise at the general inflation rate of 4 percent. Either product requires further investment. The headache-only pill could be produced using equipment costing $14.97 million. That equipment would last three years and have no resale value. The machinery required to produce the broader remedy would cost $20.97 million and last three years. The firm expects that equipment to have a $1.04 million resale value (in real terms) at the end of year 3. Pill, Inc., uses straight-line depreciation. The firm faces a corporate tax rate of 35 percent and believes that the appropriate real discount rate is 15 percent. First Alternative NPV? Second Alternative NPV? 5. Your firm is contemplating the purchase of a new $1,344,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be worth $120,000 at the end of that time. You will save $528,000 before taxes per year in order processing costs and you will be able to reduce working capital by $177,994 (this is a one-time reduction). If the tax rate is 30 percent. IRR? 6. Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $2,140,000 and will last for 8 years. Variable costs are 35 percent of sales, and fixed costs are $127,000 per year. Machine B costs $4,760,000 and will last for 11 years. Variable costs for this machine are 31 percent and fixed costs are $119,000 per year. The sales for each machine will be $9,520,000 per year. The required return is 10 percent and the tax rate is 35 percent. Both machines will be depreciated on a straight-line basis. If the company plans to replace the machine when it wears out on a perpetual basis. Machine A, EAC? Machine B, EAC? 7. Your company has been approached to bid on a contract to sell 12,000 voice recognition (VR) computer keyboards a year for 4 years. Due to technological improvements, beyond that time they will be outdated and no sales will be possible. The equipment necessary for the production will cost $2.88 million and will be depreciated on a straight-line basis to a zero salvage value. Production will require an investment in net working capital of $90,000 to be returned at the end of the project and the equipment can be sold for $240,000 at the end of production. Fixed costs are $600,000 per year, and variable costs are $198 per unit. In addition to the contract, you feel your company can sell 3,600, 7,200, 9,600, and 6,000 additional units to companies in other countries over the next four years, respectively, at a price of $330. This price is fixed. The tax rate is 38 percent, and the required return is 10 percent. Additionally, the president of the company will undertake the project only if it has an NPV of $120,000. Bid price for the contract? 8. Sanders Enterprises, Inc., has been considering the purchase of a new manufacturing facility for $178,500. The facility is to be fully depreciated on a straight-line basis over 7 years. It is expected to have no resale value after the 7 years. Operating revenues from the facility are expected to be $74,000, in nominal terms, at the end of the first year. The revenues are expected to increase at the inflation rate of 5.9 percent. Production costs at the end of the first year will be $19,000, in nominal terms, and they are expected to increase at 6.9 percent per year. The real discount rate is 8 percent. The corporate tax rate is 35 percent. Sanders has other ongoing profitable operations. NPV? 9. Yasmin Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $720,000 is estimated to result in $240,000 in annual pretax cost savings. The press falls in the MACRS five-year class (MACRS Table), and it will have a salvage value at the end of the project of $105,000. The press also requires an initial investment in spare parts inventory of $30,000, along with an additional $4,500 in inventory for each succeeding year of the project. If the shop's tax rate is 33 percent and its discount rate is 14 percent. NPV?
