Showing 955–963 of 1959 results
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In Akron, Ohio, the movie market is monopolistically competitive…
$2.00In Akron, Ohio, the movie market is monopolistically competitive. The demand function for daily attendance and the long-run average cost function at the Plaza Movie House are, respectively,
P = 9 – 0.4Q
and
AC = 10 – 0.06Q + 0.0001Q2
(a) Calculate the price that the Plaza Movie House will charge for admission to movies in the long run.
(b) What will be the number of patrons per day at that price?
(c) What is the value of the LAC that the firm will incur?
(d) How much profit will the firm earn?
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Assignment 2: Operations Decision
$7.00Using the regression results and the other computations from Assignment 1, determine the market structure in which the low-calorie food company operates.
Use the Internet to research two (2) of the leading competitors in the low-calorie microwavable food industry, and take note of their pricing strategies, profitability, and their relationships within the industry (worldwide).
Write afive (5) page paper in which you:
- Outline a plan that will assess the effectiveness of the market structure for the company’s operations.
- Suppose the business operations have now changed from the market structure specified in the scenario. Determine two (2) likely factors that might have caused the change. Predict the primary manner in which this change would likely impact business operations in the new market environment.
- Analyze the major short-run and long-run production and cost functions for the low-calorie microwaveable food company. Suggest substantive ways in which the low-calorie food company may use this information in order to make decisions in both the short-run and the long-run.
- Determine the possible circumstances under which the company should discontinue operations. Suggest key actions that management should take in order to confront these circumstances. Provide a rationale for your response.
- Suggest one (1) pricing policy that will enable your low-calorie microwavable food company to maximize profits. Provide a rationale for your suggestion.
- Outline a plan, based on the information provided in the scenario, that the company could use in order to evaluate its financial performance. Consider all the key drivers of performance, such as company profit or loss for both the short term and long term, and the fundamental manner in which each factor influences managerial decisions.
- Recommend two (2) actions that the company could take in order to improve its profitability and deliver more value to its stakeholders. Outline, in brief, a plan to implement your recommendations.
- Use at least five (5) quality academic resources in this assignment. Note: Wikipedia does not qualify as an academic resource.
Your assignment must follow these formatting requirements:
- Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
- Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
- Analyze short-run and long-run production and cost functions.
- Apply macroeconomic concepts to changes in global and national economies and how they affect economic growth, inflation, interest rates, and wage rates.
- Evaluate the profit-maximizing price and output level for given operating costs for monopolies and firms in competitive industries.
- Use technology and information resources to research issues in managerial economics and globalization.
- Write clearly and concisely about managerial economics and globalization using proper writing mechanics.
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Harvard Business School Case Study
$5.00This week’s homework is a Harvard Business School Case Study. The subject is the Cost of Capital.
The assignment for the case study is below. Make sure you answer all four questions.
Case: Nike Cost of Capital (attached)
Harvard Business School Case Study (Actually a UVA Darden Case)
Case Information:
Nike, Inc.: Cost of Capital (v. 1.8)
Product Number: UV0010
Author(s): Robert F. Bruner, Jessica Chan
Publication Date: Oct 10, 2001Case Description:
This case is intended to serve as an introduction to the calculation of the weighted-average cost of capital (WACC) of the firm. The case provides a WACC. Your assignment is to review the WACC, identify, explain any mistakes in the analysis, answer several key questions and draw your own conclusions.
Your Assignment – Answer the following questions:
- What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not?
- What was your estimate of WACC? What mistakes did Joanna Cohen make in her analysis? Which method is best for calculating the cost of equity? Calculate the costs of equity using CAPM.
- Why is it important to estimate a firm’s cost of capital? What does it represent? Is the WACC set by investors or by managers?
- What should Kimi Ford recommend regarding an investment in Nike?
Additional Files:
nike-cost-of-capital.pdf -
LEASE FINANCING AND BUSINESS VALUATION
$27.50Case Questions
1. What is the difference between an operating lease and a financial lease?
2. What is a sale and leaseback?
3. How do per procedure payment terms differ from conventional terms?
4. What is the difference between a tax-oriented (guideline) lease and a non–tax oriented lease?
5. Why should the IRS care about lease provisions?
6. What is a tax-exempt lease?
7. Why is lease financing sometimes called off-balance sheet financing?
8. How are leases accounted for on a business’s balance sheet? On its income statement?
9. Explain how the cash flows are structured in conducting a dollar cost (NAL) analysis.
10. Briefly describe two approaches commonly used to value businesses.
11. What are some problems that occur in the valuation process?
12. Which approach do you believe to be best? Explain your answer.
13. What discount rate should be used when lessees perform lease analyses?
14. What is the economic interpretation of the net advantage to leasing?
15. What is the economic interpretation of a lease’s IRR?
16. What are some economic factors that motivate leasing—that is, what asymmetries might exist that make leasing beneficial to both lessors and lessees?
17. Would it ever make sense to lease an asset that has a negative NAL when evaluated by a conventional lease analysis? Explain your answer.Additional Files:
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UNIT 2 CASE STUDY JOHNSON DRUG COMPANY
$3.00UNIT 2 CASE STUDY
JOHNSON DRUG COMPANY
- What changes in the sales management program would you recommend to Eric Johnson to improve the implementation of the “system”?
Guidelines for answering questions
Case Study Analysis Report Structure:
- A Table of Contents with title of the Case Study
- An introduction part explaining in 2 pages the topics being studied in the case studies
- The questions of each case study
- The answers of each question (with full details of strategy assumptions, expected results and managerial implications)
- Some personal insights for conclusion part explaining the lesson learned in this assignment
- A page with reference and bibliography (please apply the APA referencing method)
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Midland Energy Resources, Inc. Cost of Capital
$20.00Midland Energy Resources, Inc. Cost of Capital Questions1. How are Mortensen’s estimates of Midland’s cost of capital used? How, if at all, should these anticipated uses affect the calculations?2. Calculate Midland’s corporate WACC. Defend your assumptions about the various inputs to the calculations.3. Should Midland use a single corporate hurdle rate for evaluating investment opportunities in all of its divisions? Why or why not?4. Calculate the WACCs for the E&P and Marketing & Refining divisions. What causes them to differ from one another?5. How would you compute the WACC for the Petrochemical division? -
Discounted Cash Flow Analysis: Davis, Michaels, and Company
$20.00Module 2 1
Discounted Cash Flow Analysis 2 Davis, Michaels, and Company
Tom Davis was born and raised in San Francisco and served as a Navy lieutenant in Vietnam. After his discharge he used the GI Bill to attend NYU, where he received his degree in finance and held a part‑time job at Steel, Robbins, Hernandez, and Associates, a regional brokerage firm headquartered in New York City. After graduation he was offered a permanent position with Steel, which he gladly accepted. While at the firm, Tom became friends with Gene Michaels, a Stanford MBA who had been working as a financial analyst with the company for just over a year. Although Tom enjoyed his work, his ultimate goal was to open a financial consulting firm in his hometown. After five years, Tom managed to save enough commissions to realize his goal. He convinced Gene to become his partner and to move to San Francisco to open their own financial consulting firm, Davis, Michaels, and Company.
Davis, Michaels, and Company provides financial planning services to upper-middle-class professionals. Basically, the firm provides consulting services in the areas of income tax planning, investment planning, insurance planning, estate planning, and employee benefits planning for small, family-owned businesses. The firm is heavily involved in the Chinese community where Tom has close ties. Also, both he and Gene speak fluent Chinese. The firm does not have a tax lawyer or CPA on its staff, so Tom and Gene hire outside experts when a problem arises which they cannot handle, but this is rare.
Business has been good, perhaps too good. Tom and Gene have been working overtime to handle the load, and no end is in sight. In fact, Tom recently turned away several potential customers because he didn’t think that the firm could offer them the high degree of personal service that it usually gives its customers. As a permanent solution, he is talking to career resource center personnel at several universities.
He hopes to hire a finance major who can start work immediately after graduation, but that is still several months away.
In the meantime, Tom believes that Janet Ho, the firm’s top secretary, can handle various financial analysis duties after turning over some of her clerical duties to someone else. Janet has been taking night courses in business at a community college, and she is convinced that she can handle increased responsibilities. Tom has a great deal of faith in Janet—she has been with the firm from the very beginning, and her great personality and sound work ethic have contributed substantially to the firm’s success. Still, Tom knows that there is little room for error in this business. Customers must be confident that their financial plans are soundly conceived and properly implemented. Any mistakes create instant mistrust, and the word spreads quickly.
To make sure that Janet has the skills to do the job, Tom plans to give her a short test. As far as Tom is concerned, the single most important concept in financial planning, whether it be personal or corporate, is discounted cash flow (DCF) analysis. He believes that if Janet has solid skills in this area, then she will be able to succeed in her expanded role with minimal supervision. The basis for the test is an actual analysis that Tom is currently working on for one of his clients. The client has $10,000 to invest with a goal of accumulating enough money in 5 years to pay for his daughter’s first year of college at a prestigious Ivy League school. He has directed Tom to evaluate only fixed interest securities (bonds, bank certificates of deposit, and the like) since he does not want to put his daughter’s future at risk.
One alternative is to invest the $10,000 in a bank certificate of deposit (CD) currently paying about 10 percent interest. CDs are available in maturities from 6 months to 10 years, and interest can be handled in one of two ways—the buyer can receive interest payments every 6 months or reinvest the interest in the CD. In the latter case, the buyer receives no interest during the life of the CD, but receives the accumulated interest plus principal amount at maturity. Since the goal is to accumulate funds over 5 years, all interest earned would be reinvested.
However, Tom must also evaluate some other alternatives. His client is considering spending $8,000 on home improvements this year, and hence he would have only $2,000 to invest. In this situation, Tom’s client plans to invest an additional $2,000 at the end of each year for the following 4 years, for a total of 5 payments of $2,000 each. A final possibility is that the client might spend the entire $10,000 on home improvements and then borrow funds for his daughter’s first year of college.
To check your skills at DCF analysis, place yourself in Janet’s shoes and take the following test.
Questions
- Consider a 1-year, $10,000 CD.
- What is its value at maturity (future value) if it pays 10.0 percent (annual) interest?
- What would be the future value if the CD pays 5.0 percent? If it pays 15.0 percent?
- The First National Bank of San Francisco offers CDs with a 10.0 percent nominal (stated) interest rate but compounded semiannually. What is the effective annual rate on such a CD? What would its future value be?
- Pacific Trust offers 10.0 percent CDs with daily compounding. What is such a CD’s effective annual rate and its value at maturity?
- What nominal rate would the First National Bank have to offer to make its semiannual compounding CD competitive with Pacific’s daily-compounding CD?
- Now consider a 5-year CD. Rework Parts a through d of Question 1 using a 5-year ending date.
- It is estimated that in 5 years the total cost for one year of college will be $20,000.
- How much must be invested today in a CD paying 10.0 percent annual interest in order to accumulate the needed $20,000?
- If only $10,000 is invested, what annual interest rate is needed to produce $20,000 after 5 years?
- If only $10,000 is invested, what stated rate must the First National Bank offer on its semiannual compounding CD to accumulate the required $20,000?
- Now consider the second alternative—5 annual payments of $2,000 each. Assume that the payments are made at the end of each year.
- What type of annuity is this?
- What is the future value of this annuity if the payments are invested in an account paying 10.0 percent interest annually?
- What is the future value if the payments are invested with the First National Bank which offers semiannual compounding?
- What size payment would be needed to accumulate $20,000 under annual compounding at a 10.0 percent interest rate?
- What lump sum, if deposited today, would produce the same ending value as in Part b?
- Suppose the payments are only $1,000 each, but are made every 6 months, starting 6 months from now. What would be the future value if the 10 payments were invested at 10.0 percent annual interest? If they were invested at the First National Bank which offers semiannual compounding?
- Assume now that the payments are made at the beginning of each period. Repeat the analysis in Question 4.
- Now consider the following schedule of payments:
End of Year Payment 0 1
2
3
4
5
$2,000 2,000
0
1,500
2,500
4,000
3 - What is the value of this payment stream at the end of Year 5 if the payments are invested at 10.0 percent annually?
- What payment today (Year 0) would be needed to accumulate the needed $20,000? (Assume that the payments for Years 1 through 5 remain the same.)
- Consider Bay City Savings Bank, which pays 10.0 percent interest compounded continuously.
- What is the effective annual rate under these terms?
- What is the future value of a $10,000 lump sum after 5 years?
- What is the future value of a 5‑year ordinary annuity with payments of $2,000 each?
- The client is also considering borrowing the $20,000 for his daughter’s first year of college and repaying the loan over a four‑year period. Assuming that he can borrow the funds at a 10 percent interest rate, what amount of interest and principal will be repaid at the end of each year?
- Assume that you are given a set of cash flows on a time line and asked to find their present value. How would you choose the discount rate to apply to these flows?
- If you are using the Lotus 1-2-3 model, first examine the model closely to see how it works and then complete the model. Don’t hesitate to change input values to obtain a better grasp of the model. Also, don’t forget to look at the graphs. After you are thoroughly familiar with the model, write a short summary of Lotus’s DCF capabilities. Include not only what spreadsheets can do, but how they can be used in financial management decision making.
Additional Files:
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Bay Street Bankcorp Case Study
$15.00Bay Street BankCorp Case Study Questions
1. Identify the cash market risk exposure facing BSB in each particular phase of the minority lending project.
2. If BSB decides to hedge its market risk exposure in each phase of the minority lending project, what is the appropriate direction of the hedge (i.e., long or short position in the futures market) for each component of the project? How will the hedge position immunize the bank from loss if market interest rise or fall?
3. Given the three separate phases of the minority lending project and the information shown in Table 1, what is the best futures contract (i.e., the Treasury bond future, the Treasury bill future, or the Eurodollar future) that BSB should use to hedge interest rate risk related to each phase of the project?
4. Given the magnitude of BSB’s exposure to interest rate risk in the cash market at each phase of the minority lending project, what is the appropriate number of futures contracts the bank should buy or sell in order to immunize its exposure to interest rate risk?
5. Suppose interest rates increase over the course of the next year, so that one year from today the one-year rate on bank certificates of deposit stands at 5.5 percent, the yield on FNMA securities is 8 percent, and the yield on one-year Treasury bills is 5.6 percent. Given this increase in interest rates, the prices of the financial futures contracts described in Table 1 are: Treasury bond futures contract 119-24 Treasury bill futures contract 94.63 Eurodollar futures contract 93.05 Given this interest rate scenario one year from today, what is BSB’s net gain or loss on each of the three components of its minority leading program?
6. Refer once again to your answer in Question 5. Did the bank’s immunization strategy depend upon market interest rates rising over the course of the coming year, or is the bank’s profit position protected from both increases and decreases in the level of market interest rates? Explain your answer by demonstrating the bank’s net gain or loss on each of the three components of its minority lending program, assuming the market interest rates fall over the course of the coming year. In this case, assume that the following interest rates and futures contract prices are observed one year from today, and recalculate BSB’s net gain or loss on each component of the minority lending program: One-year Treasury security spot rate 4.3% One-year bank certificate of deposit rate 4.0% FNMA yield 5.5% Treasury bond futures contract price 124-03 Treasury bill futures contract price 95.93 Eurodollar futures contract price 97.91
7. The case mentions that BSB seeks to eliminate its exposure to risk by buying and/or selling financial futures contracts. In using these derivative financial securities, does the bank eliminate all of its exposure to risk, or just a portion of the total risk the firm faces? Does the introduction of financial futures within the bank create any additional risks for management to consider? If so, identify and explain these risks.
8. Examine the hedging strategy you developed for BSB in Question 2 through 4. Does this particular strategy represent a static or dynamic hedge? Given your answer to this question, comment on the risk that BSB faces in executing this strategy, and describe how the bank’s hedging technique might be improved to immunize the bank more effectively against changes in the the level of market interest rates.
Additional Files:
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Case Study: Credit Card and Checking account Comparison
$12.00Personal of Finance FINA 402
Case Study: Credit Card and Checking account Comparison
Introduction:
Using savings plans, checking accounts, and other financial services is a primary personal financial planning activity. Financial products such as savings plans and checking accounts are used for managing daily financial activities. Commercial banks and Investments banks may be compared on the basis of services offered, rates and fees, safety, convenience, and special programs available to customers. Regular checking accounts, activity accounts, and interest-earning checking accounts can be compared with regard to restrictions (such as a minimum balance), fees and charges, interest, and special services. Student will be able to demonstrate how these services are offered among banks.
Guidelines:
Students are instructed to follow the path shown below to compare financial services for the selected banks via DSM.
- Go to Qatar stock exchange website: qe.com.qa
- From the menu, click on the Trading companies
- Choose two banks and then visit the banks web sites
- Compare the credit card offers by completing the chart below to describe key features of each.
- Compare the Checking accounts by completing the chart below to describe key features of each
- Write a one-page (1.5 space, double between paragraphs, maximum 1500 words ) paper summarizing what you learned by comparing the credit cards and the checking account then mention which credit card offer and checking account are the best for you and why.
Financial Services Features Credit Card Checking account Bank 1 Bank 2 Bank 1 Bank 2 APR (annual percentage rate): Is it fixed or variable? Monthly fee Overdraft fee Transaction fees (balance transfers, deposits, withdrawal etc.) Minimum Balance Penalty if money drops below the minimum balance Other features