Showing 271–279 of 728 results
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MINICASE Jack Tar CFO of Sheetbend & Halyard Action
$7.00MINICASE Jack Tar CFO of Sheetbend & Halyard Action
Jack Tar, CFO of Sheetbend & Halyard, Inc., opened the company confidential envelope. It contained a draft of a competitive bid for a contract to supply duffel canvas to the U.S. Navy. The cover memo from Sheetbend’s CEO asked Mr. Tar to review the bid before it was submitted. The bid and its supporting documents had been prepared by Sheetbend’s sales staff. It called for Sheetbend to supply 100,000 yards of duffel canvas per year for 5 years. The proposed selling price was fixed at $30 per yard. Mr. Tar was not usually involved in sales, but this bid was unusual in at least two respects. First, if accepted by the navy, it would commit Sheetbend to a fixed-price, long-term contract. Sec- ond, producing the duffel canvas would require an investment of $1.5 million to purchase machinery and to refurbish Sheetbend’s plant in Pleasantboro, Maine. Mr. Tar set to work and by the end of the week had collected the following facts and assumptions: • The plant in Pleasantboro had been built in the early 1900s and is now idle. The plant was fully depreciated on Sheetbend’s books, except for the purchase cost of the land (in 1947) of $10,000. • Now that the land was valuable shorefront property, Mr. Tar thought the land and the idle plant could be sold, immediately or in the near future, for $600,000. • Refurbishing the plant would cost $500,000. This investment would be depreciated for tax purposes on the 10-year MACRS schedule. • The new machinery would cost $1 million. This investment could be depreciated on the 5-year MACRS schedule. • The refurbished plant and new machinery would last for many years. However, the remaining market for duffel canvas was small, and it was not clear that additional orders could be obtained once the navy contract was finished. The machinery was custom-built and could be used only for duffel canvas. Its secondhand value at the end of 5 years was probably zero. • Table 9–4 shows the sales staff’s forecasts of income from the navy contract. Mr. Tar reviewed this forecast and decided that its assumptions were reasonable, except that the forecast used book, not tax, depreciation. • But the forecast income statement contained no mention of working capital. Mr. Tar thought that working capital would average about 10% of sales. Armed with this information, Mr. Tar constructed a spreadsheet to calculate the NPV of the duffel canvas project, assuming that Sheetbend’s bid would be accepted by the navy. He had just finished debugging the spreadsheet when another confidential envelope arrived from Sheetbend’s CEO. It con- tained a firm offer from a Maine real estate developer to pur- chase Sheetbend’s Pleasantboro land and plant for $1.5 million in cash. Should Mr. Tar recommend submitting the bid to the navy at the proposed price of $30 per yard? The discount rate for this proj- ect is 12%. Year: 1 2 3 4 5 1. Yards sold 100.00 100.00 100.00 100.00 100.00 2. Price per yard 30.00 30.00 30.00 30.00 30.00 3. Revenue (1 – 2) 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00 4. Cost of goods sold 2,100.00 2,184.00 2,271.36 2,362.21 2,456.70 5. Operating cash flow (3 – 4) 900.00 816.00 728.64 637.79 543.30 6. Depreciation 250.00 250.00 250.00 250.00 250.00 7. Income (5-6) 650.00 566.00 478.64 387.79 293.30 8. Tax at 35% 227.50 198.10 167.52 135.72 102.65 9. Net income (7 – 8) $422.50 $367.90 $311.12 $252.07 $190.65 TABLE 9–4 Forecast income statement for the U.S. Navy duffel canvas project (dollar figures in thousands, except price per yard) Notes: 1. Yards sold and price per yard would be fixed by contract. 2. Cost of goods includes fixed cost of $300,000 per year plus variable costs of $18 per yard. Costs are expected to increase at the inflation rate of 4% per year. 3. Depreciation: A $1 million investment in machinery is depreciated straight-line over 5 years ($200,000 per year). The $500,000 cost of refurbishing the Pleasantboro plant is depreciated straight-line over 10 years ($50,000 per year). ***Need also assumptions you will need to make when looking trying to decide what Mr. Tar’s actions should be.
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MINICASE George Stamper: Repeat Orders
$2.00MINICASE
George Stamper, a credit analyst with Micro-Encapsulators Corp. (MEC), needed to respond to an urgent e-mail request from the southeast sales office. The local sales manager reported that she had an opportunity to clinch an order from Miami Spice (MS) for 50 encapsulators at $10,000 each. She added that she was particularly keen to secure this order since MS was likely to have a continuing need for 50 encapsulators a year and could therefore prove a very valuable customer. However, orders of this size to a new customer generally required head office agreement, and it was therefore George’s responsibility to
make a rapid assessment of MS’s creditworthiness and to approve or disapprove the sale. Mr. Stamper knew that MS was a medium-sized company with a patchy earnings record. After growing rapidly in the 1980s, MS had encountered strong competition in its principal markets and earnings had fallen sharply. Mr. Stamper was not sure exactly to what extent this was a bad omen. New management had been brought in to cut costs, and there were some indications that the worst was over for the company. Investors appeared to agree with this assessment, for the stock price had risen to $5.80 from its low of $4.25 the previous year. Mr. Stamper had in front of him MS’s latest financial statements, which are summarized in Table 20.4. He rapidly calculated a few key financial ratios and the company’s Z score.TABLE 20.4 Miami Spice: Summary financial statements (figures in millions of dollars)
20122011
Cash and marketable securities
5.0
12.2
Accounts receivable
16.2
15.7
Inventories
27.5
32.5
Total current assets
48.7
60.4
Property, plant, and equipment
228.5
228.1
Less accumulated depreciation
129.5
127.6
Net fixed assets
99.0
100.5
Total assets
147.7
160.9
Debt due for repayment
22.8
28.0
Accounts payable
19.0
16.2
Total current liabilities
41.8
44.2
Long-term debt
40.8
42.3
Common stock*
10.0
10.0
Retained earnings
55.1
64.4
Total shareholders’ equity
65.1
74.4
Total liabilities and shareholders’ equity
147.7
160.9
Revenue
149.8
134.4
Cost of goods sold
131.0
124.2
1.7
8.7
Assets
Current assetsFixed assets
Liabilities and Shareholders’ Equity
Current liabilitiesShareholders’ equity
Income Statement
Other expenses
Depreciation
8.1
8.6
Earnings before interest and taxes
9.0
7.1
Interest expense
5.1
5.6
1.4
4.4
2.5
8.3
Addition to retained earnings
1.5
9.3
Dividends
1.0
1.0
Income taxes
Net income
Allocation of net income
Mr. Stamper also made a number of other checks on MS. The company had a small issue of bonds outstanding, which were rated B by Moody’s. Inquiries through MEC’s bank indicated that MS had unused lines of credit totaling $5 million but had entered into discussions with its bank for a renewal of a $15
million bank loan that was due to be repaid at the end of the year. Telephone calls to MS’s other suppliers suggested that the company had recently been 30 days late in paying its bills. Mr. Stamper also needed to take into account the profit that the company could make on MS’s order. Encapsulators were sold on standard terms of 2/30, net 60. So if MS paid promptly, MEC would receive additional revenues of 50 × $9,800 = $490,000. However, given MS’s cash position, it was more than likely that it would forgo the cash discount and would not pay until sometime after the 60 days. Since interest rates were about 8%, any such delays in payment could reduce the present value to MEC of the revenues. Mr. Stamper also recognized that there were production and transportation costs in filling MS’s order. These worked out at $475,000, or $9,500 a unit. Corporate profits were taxed at 35%.QUESTION
How should George Stamper’s decision be affected by the possibility of repeat orders? -
Minicase 3: The Mallory Corporation
$10.00Minicase 3
The Mallory Corporation
On December 31, 2006, the Mallory Corporation had the following activity in its fixed assets record.
MALLORY CORPORATION – FIXED ASSETS Equipment Cost Salvage Life Method of Depreciation Machine 1 $65,000 $5,000 5 DDB purchased 1/1/2006 Building #3 $900,000 not including land $50,000 25 S/L purchased 6/30/2006 Mine 316 $1,000,000 $0 1,000,000 tons 30,000 tons extracted. Mine purchased 1/1/2006 Patent $50,000 0 17 Purchased 1/1/2006 Truck 1 $35,000 $3,000 200,000 miles Units of production: total miles depreciated to date are 60,000 as of January 1, 2006. Miles this year 30,000 REQUIRED: · Compute the depletion, amortization, and depreciation expense on December 31, 2006 for each asset listed above
· Record the depreciation journal entries for the assets above
· Suppose that Machine 1 was sold for $40,000 on 12/31/2008, record the entry
· Suppose that the corporation spent $20,000 in 2006 to defend the patent. Record the entry.
· Financial Reporting on Fixed Assets:
§ Prepare a partial balance sheet statement for Mallory Corporation showing Fixed and Intangible assets
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WEEK SIX ASSIGNMENTS
$12.00WEEK SIX ASSIGNMENTS
Do the following exercises for chapter 15:
A) Money Creation by a Single Bank
1. Given a bank with only the following items on its balance sheet: $4000 of Reserves and $4000 of Deposits. The reserve ratio (R) = .20.
a) List the assets and liabilities on the bank’s balance sheet. What is the amount of excess reserves?
b) What is the maximum amount of loans it can make? List the items on the bank’s balance sheet after it has made these loans (but before any checks on the proceeds of the loans have cleared). By how much has the money supply changed?
c) List the items on the bank’s balance sheet after checks have been drawn on the proceeds of the loans and the checks have cleared.
d) List the items on the bank’s balance sheet (after checks have been drawn and cleared) if it had used its excess reserves to purchase securities rather than make loans.
2. Answer question #1 (parts a through c) if the reserve ratio = .10.B) The Banking System and the Money Multiplier
Assume the balance sheet in question #1 represents the entire banking system rather than a single bank (which means you need to use the money multiplier). What is the maximum amount of deposits and lending that can be supported by the $4000 of reserves in the banking system (R = .20). List the items on the banking system’s balance sheet with this maximum amount of loans and deposits.Do the following exercises for chapter 16:
Open Market Operations
1. If the banking system is currently holding the following: $1000 of reserves, $1500 of government securities, $2500 of loans, and $5000 of deposits, and the Reserve Ratio = .20:
a) List the assets and liabilities on the balance sheet for the banking system. Can banks make any loans? Explain.
b) The Fed makes an open market purchase of $500 of government securities from the banks. List the items on the banking system’s balance sheet before any lending takes place.
c) List the items on the banking system’s balance sheet after full monetary expansion has taken place (assume the expansion takes place by the banks making loans rather than purchasing securities).
d) If the economy is in recession when this easy money policy takes place, explain how the policy works and what effects it will have on real GDP, employment, and the price level (assume that the size of the open market operation is large enough to affect the economy).2. If the banking system is currently holding the following: $600 of reserves, $2400 of government securities, $3000 of loans, and $6000 of deposits, and the Reserve Ratio = .10:
a) List the assets and liabilities on the balance sheet for the banking system. Can banks make any loans?
b) The Fed makes an open market purchase of $15 of securities from the banks. List the items on the banking system’s balance sheet before any lending takes place.
c) List the items on the banking system’s balance sheet after full monetary expansion has taken place. -
Television’s Influences on Children and Teenagers Sample
$5.00ASSIGNMENT A – TELEVISION REVIEW
Watch 3 television programs (see descriptions below) normally viewed by children/teens and record all instances of:
- Verbal aggression
- Physical aggression
- Gender stereotyping
Watch 1 educational children’s television program (Sesame Street, Dora, Barney, etc.)
Watch 1 non-educational children’s television program (Uncle Grandpa, Regular Show, Adventure Time, etc.)
Include a quantified comparison of the amounts and types of aggression and stereotyping in each type of program as well as an examination of the consequences of each aggressive act (frequency and speed of the reward/punishment) and stereotyping. Describe how viewing each incident might affect a child’s learning, aggression, moral, and sex role development.
Watch 1 popular hour-long teenage TV program such as Pretty Little Liars, Being Human, iZombie, Jane the Virgin, Bunheads, etc. & do an analysis of stereotyping, sexual and social behaviors and relationships and analyze how these might affect an adolescent’s development.
Requirements:
- This paper should be 2 – 5 pages in length and double spaced.
- This paper should be written in the APA format.
- The cover page and reference page does not count
towards the page requirements.
- Your paper should include the following sections:
- Cover Page
- Abstract
- Body of Paper
- Conclusion
- References
Please review the example paper provided on D2L for help with proper APA format.
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A new boat for Jan and Deana
$2.00Determining relevant cash flows for a new boat Jan and Deana have been dreaming about owning a boat for some time and have decided that estimating its cash flows will help them in their decision process. They expect to have a disposable annual income of $24,000. Their cash flow estimates for the boat purchase are as follows:
Negotiated price of the new boat $70,000 Sales tax rate (applicable to purchase price) 6.5% Boat trade-in 0 Estimated value of new boat in 4 years $40,000 Estimated monthly repair and maintenance $800 Estimated monthly docking fee $500 Using these cash flow estimates, calculate the following:
a. The initial investment
b. Operating cash flow
c. Terminal cash flow
d. Summary of annual cash flow
e. Based on their disposable annual income, what advice would you give Jan and Deana regarding the proposed boat purchase?
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Mary has been working for a university for almost 25 years and is now approaching retirement…
$15.00Mary has been working for a university for almost 25 years and is now approaching retirement. She wants to address several financial issues before her retirement and has asked you to help her resolve the situations below. Her assignment to you is to provide a 4-5 page report, addressing each of the following issues separately. You are to show all your calculations and provide a detailed explanation for each issue.
Issue A:
For the last 19 years, Mary has been depositing $500 in her savings account , which has earned 5% per year, compounded annually and is expected to continue paying that amount. Mary will make one more $500 deposit one year from today. If Mary closes the account right after she makes the last deposit, how much will this account be worth at that time?Issue B:
Mary has been working at the university for 25 years, with an excellent record of service. As a result, the board wants to reward her with a bonus to her retirement package. They are offering her $75,000 a year for 20 years, starting one year from her retirement date and each year for 19 years after that date. Mary would prefer a one-time payment the day after she retires. What would this amount be if the appropriate interest rate is 7%?Issue C:
Mary’s replacement is unexpectedly hired away by another school, and Mary is asked to stay in her position for another three years. The board assumes the bonus should stay the same, but Mary knows the present value of her bonus will change. What would be the present value of her deferred annuity?Issue D:
Mary wants to help pay for her granddaughter Beth s education. She has decided to pay for half of the tuition costs at State University, which are now $11,000 per year. Tuition is expected to increase at a rate of 7% per year into the foreseeable future. Beth just had her 12th birthday. Beth plans to start college on her 18th birthday and finish in four years. Mary will make a deposit today and continue making deposits each year until Beth starts college. The account will earn 4% interest, compounded annually. How much must Mary s deposits be each year in order to pay half of Beth s tuition at the beginning of each school each year? -
Your primary reasons for wanting to participate in this program (draft)
$0.00Study in Japan
In no more than 500 words, describe your primary reasons for wanting to participate in this program. Include how this experience will further your academic, professional/career, and/or personal goals and why you are a good candidate for this particular program.
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Impact of shortage on the public
$2.00What is the impact to the nursing profession and to the public related to the projected nursing shortage? Discuss at least one way that the nursing profession is working toward a resolution of this problem.