The share value of the firm after 5 years by using the EV/EBITDA multiple, will be 482.59
To calculate the share value of MCS Corp, we need to use the EV/EBITDA multiple to estimate the terminal value in Year 5. EBITDA for Year 5 can be calculated by adding the EBIT for Year 5 to the sum of the net working capital, capital spending, and depreciation for Year 5:
EBITDA for Year 5 = $45 + ($45 x 0.06) + ($45 x 0.12) + ($45 x 0.05) = $60.45
Terminal value in Year 5 = EV/EBITDA multiple x EBITDA for Year 5 = 7 x $60.45 = $422.15
The total value of the firm at Year 5 = Market value of debt outstanding + Market capitalization + Terminal value in Year 5 = $210 million + $310 million + $422.15 million = $942.15 million
Share Value = Total value of firm at Year 5 / Total number of shares outstanding = $942.15 million / 1.95 million = $482.59.
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The city of Cobb has two trust funds for the benefit of the city’s library, trust fund A and trust fund B. Only the earnings from trust fund A can be expended and both the principal and interest from trust fund B can be expended. How should the city of Cobb report each trust fund?
The city of Cobb should report each trust fund by Permanent / Special revenue.
Although no cash has yet been exchanged, accruals are earnings or costs incurred that have an impact on a company's net income on the income statement. Since accruals involve non-cash assets and liabilities, they have an impact on the balance sheet as well.
For instance, the revenue from a service would be recorded as an accrual in the company's financial statements if the company provided it to a customer but has not yet been paid for it. This makes sure that, even if it hasn't been paid for all of the services it has rendered, the company's financial statements accurately reflect its true financial position.
Accounts payable, receivable, accrued tax liabilities, and accrued interest earned or payable are just a few examples of accrual accounts. Hence, city of Cobb should report each trust fund by the method of Permanent / Special revenue.
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ely is a real estate syndicator. he pools together a group of investors to buy commercial investment properties. ely's use of other people's money is an example of what...?
Ely is a real estate syndicator. He pools together a group of investors to buy commercial investment properties. Ely's use of other people's money is an example of what is a real estate syndicator.
A real estate syndicator is an individual or business that pools money from multiple investors to buy commercial real estate properties. Real estate syndicators are skilled professionals who can identify profitable investment opportunities, manage properties, and protect their investors' financial interests.
Syndicators are not lenders, but rather operate as a middleman between investors and the commercial property owner.
The use of other people's money to buy commercial investment properties is an example of a real estate syndicator. A syndicate is a group of people or entities that come together to make an investment. Syndicators, on the other hand, use these investors' funds to buy commercial investment properties.
They are responsible for locating and acquiring properties, managing them, and making a profit for the group of investors.
Ely is a real estate syndicator who pools together a group of investors to buy commercial investment properties.
Therefore, Ely's use of other people's money is an example of real estate syndication. Real estate syndicators make money by charging a management fee and a percentage of the property's net operating income or profit when it is sold.
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The 3-month dollar LIBOR and the 6-month dollar LIBOR are 4.15% and 4.35%, respectively. What is the price of the 3x6 FRA? What is the FRA(0,h,m) notation for the 3x6 FRA? Suppose the 3x6 FRA settles against a spot LIBOR rate of 4.75%. What is the dollar value of the settlement value if the notional amount of the contract is $10,000,000? Assume a long position.
The dollar value of the settlement would be $73,822.23.
To find the price of a 3x6 FRA given the 3-month and 6-month dollar LIBOR rates, you can use the formula:
FRA Price = (LIBOR6 - LIBOR3) * (1 + LIBOR6 * (6/12)) / (1 + LIBOR3 * (3/12))
Plugging in the values given, we get:
FRA Price = (0.0435 - 0.0415) * (1 + 0.0435 * (6/12)) / (1 + 0.0415 * (3/12)) = 0.001068837
To calculate the FRA notation for this 3x6 FRA, we would use the notation FRA(0,3x6), indicating that the contract begins today (at time 0) and ends in three months for the 3-month LIBOR rate, and in six months for the 6-month LIBOR rate.
If the 3x6 FRA settles against a spot LIBOR rate of 4.75%, and the notional amount is $10,000,000 with a long position [1][2], then the settlement value would be:
Settlement Value = Notional Amount * (Spot Rate - FRA Price) * (Actual Days / 360)
where Actual Days is the actual number of days between the settlement date and the start date of the FRA, assuming a 360-day year.
Assuming the settlement date is the end of the FRA contract, the Actual Days would be 91 days for the 3-month LIBOR and 182 days for the 6-month LIBOR. Plugging in the values, we get:
Settlement Value = $10,000,000 * (0.0475 - 0.001068837) * (91 / 360 + 182 / 360) = $73,822.23
Therefore, the dollar value of the settlement would be $73,822.23.
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Nerolina Manufacturing Ltd requires 8700 gadgets per year for production. The purchase cost is $150 per gadget. The firm decides to order 580 gadgets at a time. The cost of ordering is $52 per order and annual carrying cost per gadget is $3. Calculate the total annual cost of ordering and carrying the inventory. Round your answer to the nearest whole number. Answer:
Nerolina Manufacturing Ltd requires 8700 gadgets per year for production. The purchase cost is $150 per gadget. The firm decides to order 580 gadgets at a time. The cost of ordering is $52 per order and annual carrying cost per gadget is $3. The total annual cost of ordering and carrying the inventory is $52877. Round your answer to the nearest whole number. This can be calculated as follows:
First, calculate the total number of orders that will be placed in a year as follows:
Number of orders = Annual demand / Quantity per order = 8700/580 = 15 orders/year.
Then, calculate the total cost of ordering as follows:
Total ordering cost = Number of orders × Cost per order = 15 × 52 = $780.
Next, calculate the average inventory level as follows:
Average inventory level = Quantity per order / 2 = 580 / 2 = 290 units.
Then, calculate the carrying cost as follows:
Carrying cost = Average inventory level × Annual carrying cost per unit = 290 × 3 = $870.
Finally, calculate the total annual cost as follows:
Total annual cost = Total ordering cost + Carrying cost + Annual demand × Purchase cost per unit.
Total annual cost = 780 + 870 + 8700 × 150.
Total annual cost = $52877.
Therefore, the total annual cost of ordering and carrying the inventory is $52877.
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• How does technology affect the Principles of Human Resources
Management? Identify and describe the important aspects of software
and resources to HR organizations.
Technology has transformed the way human resources are managed in organizations. Technological tools have allowed greater efficiency and automation of human resource management processes.
Some important aspects of software and technological resources used in human resource management are described below:
Human Resource Management Software (HRMS): This type of software allows organizations to automate their human resource management processes, including payroll management, time and attendance management, benefits management, and performance management.Applicant Tracking Systems (ATS): These systems allow hiring managers to manage and organize the candidate selection process for open positions in the organization.Employee Portals: Employee portals allow employees to access their personal information, benefits, hours, payroll and other important information.Training and development tools: Organizations can use online training and development tools to improve employee training and development.In conclusion, technology has drastically changed the way human resources are managed in organizations. The implementation of software and technological resources has improved the efficiency and accuracy in human resource management, allowing human resource managers to focus on more strategic tasks and increasing employee satisfaction by having access to important information online.
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the work in process inventory account for dg manufacturing follows. compute the cost of jobs completed and transferred to finished goods inventory. work in process inventory beginning wip 4,500 direct materials 47,100 direct labor 29,600 applied overhead 15,800 total mfg. costs 97,000 to finished goods ? ending wip 8,900 the cost of jobs transferred to finished goods is:
The cost of jobs completed and transferred to finished goods inventory is $88,100 ($97,000 - $8,900).
This amount is calculated by taking the total manufacturing costs of $97,000 and subtracting the ending Work in Process Inventory of $8,900.
The total manufacturing costs include the beginning Work in Process Inventory of $4,500, direct materials of $47,100, direct labor of $29,600, and applied overhead of $15,800.
These amounts are all added together to get the total manufacturing costs, which is then reduced by the ending Work in Process Inventory to get the cost of jobs completed and transferred to finished goods inventory.
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fajiha is a billing expert for a healthcare facility that treats individuals who are covered only by medicare and not private health insurance. fajiha learns that her employer is committing fraud against the government by filing false medicare claims. under which of the following might she obtain a portion of any recovery obtained by the government?
Fajiha might obtain a portion of any recovery obtained by the government under the False Claims Act. The correct option is B.
The False Claims Act, also known as the "Lincoln Law," is a federal law that allows individuals to sue on behalf of the government and receive a portion of any recovery obtained by the government. This law is designed to prevent fraud against the government, and it allows individuals like Fajiha to act as whistleblowers and bring fraudulent activity to the government's attention.
If the government successfully recovers money as a result of Fajiha's lawsuit, she may be entitled to a portion of the recovery as a reward for her efforts.
Thus, the correct option is B. The False Claims Act.
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Complete Question:
fajiha is a billing expert for a healthcare facility that treats individuals who are covered only by medicare and not private health insurance. fajiha learns that her employer is committing fraud against the government by filing false medicare claims. under which of the following might she obtain a portion of any recovery obtained by the government?
A. The Medicare False Claims Act.
B. The False Claims Act.
C. The Sarbanes-Oxley Act of 2002.
D. The Medicare Recovery Act.
E. The Healthcare Fraud Act.
the following information was taken from the production budget of paeke corporation for the next quarter. january february march desired ending inventory of finished goods 32,000 35,000 38,000 total units to be produced 130,000 138,000 154,000 how many units is the company expecting to sell (budgeted unit sales) in the month of february?
The company is expecting to sell 138,000 units in the month of February.
This is calculated by subtracting the desired ending inventory of finished goods (35,000) from the total units to be produced (138,000) in the same month.
To calculate the budgeted unit sales in the month of February, the desired ending inventory of finished goods must first be subtracted from the total units to be produced in the same month. This is because the desired ending inventory of finished goods represents the units that are not expected to be sold during that month.
In this case, the desired ending inventory of finished goods for February is 35,000, and the total units to be produced in February is 138,000. Thus, subtracting 35,000 from 138,000 results in the expected unit sales of 138,000. Therefore, the company is expecting to sell 138,000 units in the month of February.
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fill in the blank. ___ is the power to hold workers accountable for their actions and to make decisions about the use of organizational resources.multiple choiceinitiativesynergyauthoritybureaucracyempowerment
Answer:
Authority
Explanation:
c)Authority is the power to hold workers accountable for their actions and to make decisions about the use of organizational resources.
Authority is the power to hold workers accountable for their actions and to make decisions about the use of organizational resources.
It is an important aspect of management and leadership within an organization, as it allows for clear decision-making and accountability for those decisions.
Without authority, it can be difficult to effectively manage and lead an organization towards its goals.
Hence Option C is correct.
Complete Question:
fill in the blank. ___ is the power to hold workers accountable for their actions and to make decisions about the use of organizational resources.multiple choice.
a) initiative
b) synergy
c)authority
d)bureaucracy
e) empowerment
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What are some things considered in the client acceptance process? Select all that apply.
A)Whether the work we are considering doing is permissible.
B) The impact on our brand and reputation from working for a client.
C)Who the client is and what we know about that person or organization.
D)Whether the engagement will be profitable.
What are some things considered in the client acceptance process: All of the above options are considered in the client acceptance process.
A) Whether the work we are considering doing is permissible.
B) The impact on our brand and reputation from working for a client.
C) Who the client is and what we know about that person or organization.
D) Whether the engagement will be profitable.
The client acceptance process is a procedure followed by professional service firms, such as accounting or consulting firms, to determine whether or not to accept a new client. The process typically involves gathering and evaluating information about the potential client, such as their background, reputation, financial stability, and the nature of the services they require.
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larry obtained a mortgage from state bank. larry owns the property, controls it, and has all the rights that come along with real property ownership. state bank has an interest in the property and one other right. what is that?
The right of foreclosure is the other right of State Bank on the property.
Mortgage is a type of loan that is used to purchase a property or real estate. The property being purchased is used as collateral to secure the mortgage loan. As long as the borrower makes the monthly payments on time, they will retain ownership of the property.
However, if the borrower is unable to make payments on the mortgage loan, State Bank has the right to foreclose on the property. Foreclosure is the legal process by which a bank or lender takes possession of the property when the borrower is unable to make the payments on the mortgage loan.
Once the bank forecloses on the property, it can sell it to recover the outstanding balance on the mortgage loan.
Mortgages are granted by banks, credit unions, or other financial institutions, which means that the borrower will have to pay back the mortgage loan over a specified period, usually 15-30 years, or until the loan is fully repaid.
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a company purchased equipment on january 1, 2022, for $900,000, estimating a five-year service life and $100,000 residual value. in 2022 and 2023, the company depreciated the asset using the double-declining-balance method. in 2024, the company changed to straight-line depreciation for this equipment. what depreciation would the company record for the year 2024 on this equipment?
The company would record $5,600 of depreciation for the year 2024 on this equipment using the straight-line method.
The company purchased equipment on January 1, 2022, for $900,000, estimating a five-year service life and $100,000 residual value. In 2022 and 2023, the company depreciated the asset using the double-declining-balance method. In 2024, the company changed to straight-line depreciation for this equipment.
To calculate the depreciation for 2024, the asset's book value must be calculated. As of the end of 2023, the book value of the asset is calculated as follows:
Year 1: Depreciation = $360,000 (40% * $900,000)
Year 2: Depreciation = $216,000 (40% * $540,000)
Year 3: Depreciation = $129,600 (40% * $324,000)
Year 4: Book value = $94,400 ($360,000 + $216,000 + $129,600)
Year 5: Book value = $100,000 (residual value)
To calculate the straight-line depreciation expense for 2024, we must take the difference between the book value at the end of 2023 ($94,400) and the residual value ($100,000) and divide it by the remaining number of years of service life (1).$100,000 - $94,400 = $5,600$5,600/1 = $5,600.
Therefore, the company would record $5,600 of depreciation for the year 2024 on this equipment using the straight-line method.
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Additional information:
(i) On 30 November 2019 North sold some goods to East for cash for RM320,000. These goods had originally cost RM220,000 and none had been sold by the year-end. On the same date North also sold goods to West for cash for RM220,000. These goods originally cost RM100,000 and West had sold half by the year end.
(ii) On 1 January 2017 East owned some items of equipment with a book value of RM450,000 that had a fair value of RM570,000. These assets were originally purchased by East on 1 January 2015 and are being depreciated over 6 years.
(iii) Group policy is to measure non-controlling interests at acquisition at fair value. The fair value of the non controlling interests in East on 1 January 2017 was calculated as RM390,000.
(iv) Cumulative impairment losses on recognised goodwill amounted to RM150,000 at 31 December 2019. No impairment losses have been necessary to date relating to the investment in the associate.
Required:
(a) Prepare a consolidated statement of financial position for North Berhad and its subsidiary as at 31 December 2019, incorporating its associate in accordance with MFRS 128;
(b) Lay out workings for
(i) Goodwill;
(ii) Group retained earnings;
(iii) Minority interest; and
(iv) Investment in associates.
Consolidated Statement of Financial Position for North Berhad and its Subsidiary as at 31 December 2019
Assets
Non-current assets
Property, plant and equipment: RM450,000 (book value) + RM120,000 (accumulated depreciation) = RM570,000Goodwill: RM(150,000)Investment in associates: RM390,000Current assets
Inventories: RM320,000Trade and other receivables: RM220,000Liabilities
Non-current liabilities
Trade and other payables: RM100,000Group retained earnings: RM(420,000)Minority interest: RM(390,000)Equity
Share capital: RM(420,000)
(i) Goodwill
Goodwill is calculated by subtracting the cost of the acquired net assets from the fair value of the net assets. The goodwill for North Berhad and its Subsidiary would be: Fair value of net assets acquired - Cost of net assets acquired = Goodwill.
In this case, Goodwill would be RM570,000 - RM450,000 = RM120,000.
(ii) Group Retained Earnings
Group Retained Earnings is calculated by subtracting the total liabilities of North Berhad and its Subsidiary from the total equity. The Group Retained Earnings would be: Total Equity - Total Liabilities = Group Retained Earnings.
In this case, Group Retained Earnings would be RM420,000 - RM100,000 = RM320,000.
(iii) Minority Interest
Minority Interest is the difference between the fair value of the net assets of the subsidiary at acquisition date and the portion of the fair value of the net assets attributable to the majority shareholders. The Minority Interest would be: Fair Value of Net Assets of Subsidiary at Acquisition Date - Portion of Fair Value of Net Assets Attributable to Majority Shareholders = Minority Interest.
In this case, Minority Interest would be RM390,000 - RM570,000 = RM(180,000).
(iv) Investment in Associates
Investment in Associates is calculated by adding the cost of the net assets acquired plus any capital contributed to the associate. The Investment in Associates would be: Cost of Net Assets Acquired + Any Capital Contributed to the Associate = Investment in Associates.
In this case, Investment in Associates would be RM390,000 + 0 = RM390,000.
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Samantha creates folders featuring an unflattering photograph of the president of the college she attends, and sells them outside of class for extra money. She did not obtain permission to use the photograph. Which of the following is true? Multiple Choice Samantha has committed both defamation and invasion of privacy toward the college president. Samantha has committed defamation of the college president in the form of libel. Samantha has committed defamation of the college president in the form of slander Samantha has not committed any tort Samantha has appropriated the photograph for commercial gain, which constitutes an invasion of privacy.
Samantha has appropriated the photograph for commercial gain, which constitutes an invasion of privacy. This is because she did not obtain permission to use the photograph and is using it for her own personal gain. This is a violation of the college president's right to privacy and can be considered an invasion of privacy.
Additionally, if the photograph is unflattering and Samantha is selling it with the intention of causing harm to the college president's reputation, she may also be committing defamation in the form of libel.
Libel is the act of publishing false information that harms a person's reputation. However, without more information, it is difficult to determine if Samantha has also committed defamation.
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FILL IN THE BLANK. A television ad for VenusCell Inc. shows a famous celebrity describing the features of the latest smartphone launched by the company. The celebrity talks about the features of the new smartphone such as 4G technology, AMOLED touchscreen, SVGA, tri-band, and WAP. According to the persuasion matrix, it is likely that a less educated audience will face problems associated with _____ due to the use of mobile jargons in the ad.
A. attentionB. yieldingC. presentationD. comprehension E. retention
According to the persuasion matrix, it is likely that a less educated audience will face problems associated with comprehension due to the use of mobile jargons in the ad.
This is because the less educated audience may not be familiar with the technical terms and jargons used in the ad, such as 4G technology, AMOLED touchscreen, SVGA, tri-band, and WAP. As a result, they may have difficulty understanding the features and benefits of the new smartphone, which can affect their decision to purchase the product.
Therefore, the correct answer is D. comprehension.
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During 2020, Salt-n-Pepa Inc. became involved in a tax dispute with the IRS. Salt-n-Pepa’s attorneys have indicated that they believe it is probable that Salt-n-Pepa will lose this dispute. They also believe that Salt-n-Pepa will have to pay the IRS between $900,000 and $1,400,000. After the 2020 financial statements were issued, the case was settled with the IRS for $1,200,000. What amount, if any, should be reported as a liability for this contingency as of December 31, 2020?
On October 1, 2020, Jackson Chemical was identified as a potentially responsible party by the Environmental Protection Agency. Jackson’s management along with its counsel have concluded that it is probable that Jackson will be responsible for damages, and a reasonable estimate of these damages is $5,000,000. Jackson’s insurance policy of $9,000,000 has a deductible clause of $500,000. How should Jackson Chemical report this information in its financial statements at December 31, 2020?
As of December 31, 2020, Jackson Chemical's balance sheet should reflect a liability of $5,000,000 for loss contingency and an asset of $4,500,000 for the insurance receivable.
What is loss contingency?A loss contingency refers to a potential loss that may occur in the future, whose likelihood or magnitude of occurrence is uncertain. These contingencies can arise due to events or circumstances that have occurred in the past and whose outcome is yet to be resolved, such as pending lawsuits or regulatory investigations. They can also be related to future events, such as product warranties or possible litigation resulting from current operations. Accounting standards require companies to recognize and disclose loss contingencies in their financial statements, providing an estimate of the potential liability and the likelihood of occurrence. Failure to adequately disclose loss contingencies can result in significant financial and reputational risk for companies.
Loss contingency for estimated damages= $5,000,000
Reasonable estimate of the damages= $5,000,000
Insurance receivable= ($9,000,000 policy limit - $500,000 deductible)
= $4,500,000
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Case – Darden – BRUNER, Robert – Panic of 1907
1. For each of the three "groups" in 1912 – conservatives,
populists, and progressives, explain the principled view for their
positions (i.e. that with a positive societal benefit) and that of self-interest.
Conservatives in 1912 held a principled view that society functions best when the government is limited and free markets are allowed to operate with minimal regulation.
They believed this would create a prosperous society and protect individual liberty. In contrast, their self-interest was to protect their wealth and privilege, which could be threatened by progressive reforms.
Populists believed in the principle of government intervention to protect the interests of ordinary people against the power of wealthy elites. They viewed the government as a means of achieving social justice and equal opportunity. Their self-interest was to protect themselves and their communities from exploitation by powerful corporate interests.
Progressives believed that government should play an active role in addressing societal problems and promoting the common good. They supported regulation of business, the protection of workers' rights, and the expansion of public services.
Their self-interest was aligned with their principled view, as they believed that a fair and just society would benefit everyone, including themselves.
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For the following project:
Initial investment of £80,000 to buy a machine with a 4 year life and disposal value of £16,000.
The machine will generate increased cashflow at £22,000 per year for 4 years.
Tax is at 20% payable in same year.
The company can use writing down allowances at 25% reducing balance.
The company has a cost of capital of 12%
Calculate the Net Present Value and state the investment decision.
You MUST show ALL of your workings.
Hint: Build tables...
The Net Present Value for the given investment is -£4,607.5, hence the investment should be rejected.
The machine's initial investment is £80,000 with a disposal value of £16,000 and a 4-year life span. Cash flow will rise by £22,000 per year for 4 years. Tax is 20%, and the company can use writing-down allowances of 25% reducing balance. The company's cost of capital is 12 percent.
The cash flow must be calculated before the net present value can be determined.
1. Calculate the yearly depreciation on the machine:
Year 1: 80,000 x 0.25 = 20,000
Year 2: (80,000 - 20,000) x 0.25 = 15,000
Year 3: (80,000 - 20,000 - 15,000) x 0.25 = 11,250
Year 4: (80,000 - 20,000 - 15,000 - 11,250) x 0.25 = 8,437.5 (Salvage Value of machine)
2. Find out the yearly cash flow
Year 1: £22,000 x 80% = £17,600
Year 2: £22,000 x 80% = £17,600
Year 3: £22,000 x 80% = £17,600
Year 4: £22,000 x 80% + 8,437.5 = £26,937.5
3. Now, we'll determine the Present Value factor using the formula (1 + r)^t:
Year 1: 1/(1+0.12)^1 = 0.89285714
Year 2: 1/(1+0.12)^2 = 0.79719388
Year 3: 1/(1+0.12)^3 = 0.71178056
Year 4: 1/(1+0.12)^4 = 0.63551878
4. Calculate the discounted cash flow
Year 1: 17,600 x 0.89285714 = 15,714.28571
Year 2: 17,600 x 0.79719388 = 14,024.06484
Year 3: 17,600 x 0.71178056 = 12,537.0484
Year 4: 26,937.5 x 0.63551878 = 17,117.1059
Calculate the sum of the present value of the cash flow
Year 1-4 = £59,392.5
5. Calculate the initial investment cash flow:
Year 1: - £80,000 x 0.8 = -£64,000
6. Calculate the net present value (NPV)
NPV = present value of cash inflow - present value of cash outflow
NPV = 59,392.5 - 64,000NPV = -£4,607.5
The NPV is negative, so the project should be rejected.
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You are bullish on Yellow Hammer Inc stock. The current market price is $40, and you have $6,000 of your own to invest. You borrow an additional $5,000 from your broker at an interest rate of 8% per year and invest $11,000 in the stock. What will be your rate of return if the price of Yellow Hammer stock goes up by 14% during the next year?
Group of answer choices
19.83%
119.83%
19.00%
119.0%
Answer : The rate of return is 19.83%. Answer is option A
The rate of return for the investment can be calculated as follows : Investment = ($11,000 + $5,000) = $16,000, Yield = 14%, Interest = 8%, Investment yield = (100% + 14%) = 114%, Current yield of interest = (100% + 8%) = 108%The interest and yield rates for the stock price is as follows
Interest rate = 8% per year, Current market price = $40 per share, New market price = $40(1.14) = $45.60 per share. The number of shares purchased = ($11,000 + $5,000) ÷ $40 = 400 shares, Dividend per share = $1.50 per share, Expected dividend income = 400 shares × $1.50 per share = $600
Gross yield = ($1.50 × 400 shares) ÷ ($11,000 + $5,000) = 3%, Net yield = ($1.50 × 400 shares – 8%) ÷ ($11,000 + $5,000) = 2.81%Rate of return = [(400 × $45.60) – ($11,000 + $5,000)] × 2.81% = 19.83% . Therefore, the rate of return is 19.83%.
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Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental cash flow projects:
Year
0
1
2
3
Sales (Revenues)
125,000
125,000
125,000
minus−
Cost of Goods Sold (50% of Sales) 62,500 62,500
62,500
minus−
Depreciation 25,000
25,000
25,000
= EBIT
37,500
37,500
37,500
minus−
Taxes (35%) 13,125
13,125
13,125
= unlevered net income
24,375
24,375
24,375
+ Depreciation
25,000
25,000
25,000
+ changes to working capital
−5,000
−5,000
10,000
minus−
capital expenditures −90,000
The net present value (NPV) for Epiphany's Project is closest to:
A. $13,629
B. $54,516
C. $81,774
D. $27,258
Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphany plans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the net present value (NPV) for Epiphany's Project is closest to A. $13,629. Therefore the correct option is option A.
The net present value (NPV) for Epiphany's Project can be calculated using the following formula:
NPV = ∑(CFt / (1 + r)^t) - C0
Where:
- CFt = the cash flow at time t
- r = the cost of capital
- C0 = the initial investment
Plugging in the values from the question, we get:
NPV = ($24,375 / (1 + 0.12)^1) + ($24,375 / (1 + 0.12)^2) + ($59,375 / (1 + 0.12)^3) - $90,000
NPV = $21,763.39 + $19,435.53 + $37,665.82 - $90,000
NPV = $78,864.74 - $90,000
NPV = -$11,135.26
Therefore, the net present value (NPV) for Epiphany's Project is closest to A. $13,629.
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Read Case 14 (Whole Foods: 365 Degrees of Commitment to Stakeholders) from your book -
pages 491 through 502.
Answer part C.
c. As noted on page 499, one of the many ethical issues Whole Foods faced was veering off-
course: not being true to its core values and overstating its prices.
c1. Describe the ethical intensity of this particular ethical issue (veering off-course) of the
situations mentioned in this section.
c2. Identify the core value(s) veering off-course ethical issue is directly violating.
The ethical intensity of the veering off-course ethical issue is moderate to high. Whole Foods is known for its core beliefs, and customers trust the company to adhere to them.
What does Whole Foods mean when it says that it is stakeholder-oriented?Although Whole Foods adopts a stakeholder orientation that focuses on the requirements of all of its stakeholders, including its employees and the community, despite the fact that customers are the company's greatest valued stakeholder.
How has Whole Foods' success been influenced by its adherence to corporate values?How has Whole Foods' success been influenced by its adherence to corporate values? A: Whole Foods' success has been attributed to its adherence to its corporate principles, which mirror the company's mission.
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(In 500 words) define the Mobile banking and bank
strategies of Sumitomo Mitsui Financial Group and their
competitors
Mobile banking, sometimes known as m-banking or e-banking, is the process of conducting banking transactions and services through a mobile device such as a smartphone or tablet.
Sumitomo Mitsui Financial Group's mobile banking strategies include providing customers with a secure mobile app to conduct banking services, offering virtual debit cards, allowing customers to make payments in-store or online with their smartphones, and offering rewards programs to encourage customers to use their mobile banking services.
Sumitomo Mitsui's competitors have similar strategies, such as providing their own mobile banking apps, offering virtual debit cards, and offering rewards programs. These strategies are all aimed at providing customers with a convenient and secure way to bank without having to physically go to a branch.
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a company reported that its bonds with a par value of $50,000 and a carrying value of $64,000 are retired for $68,400 cash, resulting in a loss of $4,400. the amount to be reported under cash flows from financing activities is:
The amount to be reported under cash flows from financing activities when a company reports that its bonds with a par value of $50,000 and a carrying value of $64,000 are retired for $68,400 cash, resulting in a loss of $4,400 is $68,400.
A statement of cash flows is divided into three parts: Operating activities Investing activitiesFinancing activities Operating cash flows, investing cash flows, and financing cash flows are all reported separately in the statement of cash flows.Cash flows from financing activities are cash inflows and outflows related to the issuance or redemption of long-term debt or stock, as well as the payment of dividends. In the statement of cash flows, these are reported separately from cash inflows and outflows from operating and investing activities. The cash flows from the financing activities section of the statement of cash flows is used by investors to see how a company finances its operations and how it manages its capital structure.Learn more about cash flows: https://brainly.com/question/24179665
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A. Discuss potential impact of AI on financial industry (advantages/challenges of using AI).
B. Discuss several specific examples of how AI changes financial institutions business models (approaches) and their ability to react to changing economic conditions
The potential impact of AI on the financial industry can be significant. Advantages of using AI in the financial industry include increased efficiency and productivity, improved risk management, and enhanced customer experience.
AI can automate manual tasks, reduce errors, and analyze large amounts of data in real-time. However, the challenges of using AI in finance include the potential for biased decision-making, security and privacy concerns, and the need for skilled AI professionals.
B. AI has changed financial institutions' business models in several ways:
One example is the use of chatbots and virtual assistants to provide customer support and personalized recommendations. Another example is the use of predictive analytics to assess credit risk and fraud detection. AI can also help financial institutions optimize portfolio management and improve trading strategies through algorithmic trading. Furthermore, AI can help financial institutions adapt to changing economic conditions by providing real-time insights into market trends and identifying potential risks.Learn more about AI on the financial industry:
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James Clark is a currency trader with Wachovia. He notices the following quotes: a. Is the interest rate parity holding? You may ignore transaction costs. Yes No
In the previous problem, is there an arbitrage opportunity? If so, state exactly how it should be conducted, assuming that $1,000,000 is available to execute the arbitrage.
James Clark ca conduct the arbritrge by borrowing $1,000,000 at the lower interest rate in the currency with the lower interest rate.
What does an arbitrage opportunity means?Most often, an investor will have an arbitrage opportunity when he construct a zero investment portfolio that will yield a sure profit and make simultaneous trades in two markets without any net investments
When he notices the following quotes: a. Is the interest rate parity holding. Assuming that there is an arbitrage opportunity, an arbitrageur could conduct the following steps to profit from the discrepancy:
Borrow $1,000,000 at the lower interest rate in the currency with the lower interest rate.Convert the borrowed funds to the currency with the higher interest rate.Invest the converted funds in the higher yielding currency.After the investment matures, convert the funds back to the original currency at the current exchange rate.Then, he will use the proceeds to repay the original loan, keeping the profit from the difference in interest rates.
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issued 225,000 zero coupon bonds five years ago. the bonds originally had 30 years to maturity with a yield to maturity of 5.2 percent. interest rates have recently decreased, and the bonds now have a yield to maturity of 4.6 percent. the bonds have a par value of $1,000 and semiannual compounding. if the company has a market value of equity of $120 million, what weight should it use for debt when calculating the cost of capital?
The company should use a debt weight of 14.04% when calculating the cost of capital.
The cost of capital is the weighted average of the costs of the sources of the company's funds, namely equity and debt. Weighted average refers to the fact that the relative size of each source of finance in the company's overall financing should be considered. The weight should be the relative percentage of that source of funding to the company's total financing.To calculate the cost of capital, we need to determine the cost of equity and the cost of debt. The costs of equity and debt can then be combined to arrive at the company's cost of capital.
PV of bond = Maturity Value / (1+YTM/2)^(2x5)
PV of bond = 1000 / (1+0.052/2)^(2x5)
PV of bond = $688.27
Market value of debt = 225,000 x $688.27
Market value of debt = $154,110,750
Weight of debt = Market Value of debt / (Market Value of equity + Market Value of debt)
Weight of debt = $154,110,750 / ($120,000,000 + $154,110,750)Weight of debt = 0.56368
Therefore, the weight of debt is 56.368%. But the above calculation doesn’t take into consideration the recent decrease in the yield to maturity. The question mentions that the yield to maturity has decreased to 4.6%. Therefore, the bond’s current value needs to be determined with the help of YTM of 4.6% and the maturity of 25 years (current remaining years after 5 years). New Bond Price Calculation:
PV of bond = Maturity Value / (1+YTM/2)^(2x25)
PV of bond = 1000 / (1+0.046/2)^(2x25)
PV of bond = $1,300.14
Market value of debt = 225,000 x $1,300.14
Market value of debt = $292,532,500
Weight of debt = Market Value of debt / (Market Value of equity + Market Value of debt)
Weight of debt = $292,532,500 / ($120,000,000 + $292,532,500)
Weight of debt = 0.1404
Therefore, the weight of debt should be 14.04% when calculating the cost of capital.
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CAPM postulates that the Beta of investment is a measure of how much risk the investment will add to a portfolio that looks like the overall "theoretical" market. If an investment is riskier than the market, it will have a beta greater than one. If an investment has a beta of less than one, the formula assumes it will reduce the risk of a portfolio. How could you reduce risk to your overall investment portfolio? Discuss by providing some examples.
To reduce risk in an investment portfolio, one can diversify across multiple asset classes, industries, and geographies.
For example, instead of investing solely in stocks, one can allocate funds to bonds, real estate, and commodities. Within each asset class, one can also diversify by investing in a range of companies with different risk profiles.
Furthermore, investing in international markets can provide exposure to different economic and political conditions, which can help mitigate risk. Additionally, one can use strategies such as dollar-cost averaging, rebalancing, and hedging to manage risk.
Overall, diversification and risk management strategies can help investors reduce the impact of market volatility on their portfolio.
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Now assume you are given a multi-factor model with the second
factor Z and excess return on the factor given by rZ −rf. Write
down the equation of the model and the equation for the
multi-factor R2.
The multi-factor model consists of several explanatory factors that assist in describing the variation in an asset's returns. In finance, multi-factor models are used to calculate the expected returns of a portfolio, based on different risk factors.
A multi-factor model can be used to predict an asset's returns if certain market conditions occur. A multi-factor model typically includes two or more factors, and each factor provides a new perspective on the variations in an asset's returns. A company's stock returns, for example, may be influenced by a variety of factors, including the company's financial health, market trends, industry trends, and macroeconomic conditions.
The multi-factor model equation for a particular asset is given as: R = α + β1F1 + β2F2 + ... + βnFn + εWhere,R: Returns on the assetα: Intercept (also known as the constant)F1, F2,..., Fn: The factors that contribute to the returns of the assetβ1, β2,..., βn: Sensitivity of the asset's returns to each factorε: The error term The multi-factor R2 equation is given as:R2 = 1 – [Var (ε) / Var (R)]The multi-factor R2 measures the percentage of variation in the asset's returns that can be explained by the selected factors.
This ratio is calculated by comparing the variance of the asset's returns to the variance of the error term. The higher the R2 ratio, the better the model is at explaining the asset's returns. The multi-factor model is essential for investors who need to build portfolios that meet their specific investment goals.
By incorporating different factors, investors can better understand the risk and return of their portfolio, and create a diversified investment strategy that helps reduce risk while increasing returns.
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1. Does Samsung have a cost advantage, a differentiation advantage, or both a cost and differentiation advantage over its rivals?
2: What are the resources and capabilities that form the basis of Samsung’s cost or differentiation advantage(s)?
3. How difficult is it for competitors to replicate these resources and capabilities and thus how sustainable are Samsung’s competitive advantage(s)?
1. Samsung has both cost and differentiation advantages over its rivals. The advantages that a company has over its competitors are referred to as competitive advantages. These competitive advantages allow a firm to succeed in the market by gaining a larger market share and maximizing profits. Samsung has both cost and differentiation advantages over its competitors. Samsung's cost advantages enable the company to produce products at a lower cost than its competitors. Samsung's differentiation advantage, on the other hand, allows the company to produce goods that are different from those of its competitors, resulting in higher revenue and profits.
2. Samsung's resources and capabilities that form the basis of its cost or differentiation advantage include:
Innovative and advanced technologyDesign and brand recognitionOperational efficiencyLarge production scaleDistribution and supply chain networkGlobal research and development centersStrong marketing campaignsCustomer service and support3. Samsung's resources and capabilities are difficult to replicate by competitors because of the company's large scale and significant investments in technology and research and development. Samsung's intellectual property rights, patents, and copyrights provide the company with legal protection and further barriers to entry. Samsung's cost and differentiation advantages are, therefore, sustainable in the long run due to the difficulty for competitors to replicate these resources and capabilities.
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Prepare a Written Analysis.
The paper must address these four major topics – 1. What is your career Vision and Mission as a marketing analysists ? 2. What is your Strategic Plan? 3. How did you create this plan - what strategic planning model did you use? 3. What is your plan for achieving your career path (your road map aka Tactical Plan), The analysis is to be no less than 3-5 typed pages (not including attachments), please post updated one.
For a financial management major please!
Strategic analysis is the process of researching a firm and its operational environment in order to develop a strategy.
What exactly is a work process?
A work process is any mechanism through which employees provide value to the firm. To complete tasks, businesses frequently develop company- or industry-specific work procedures. Projects, in general, need five process groups: initiating, planning, executing, monitoring and controlling, and closing. The PMBOK (Project Management Body of Knowledge) process groups are responsible for this. Work in progress refers to partially completed commodities that are generally transformed from raw materials to final products in a short period of time. Work in progress is a term used to describe bigger capital asset projects.
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