Case Study: Marisa Name: Marisa Demographics Marisa is an 11-year-old Hispanic-American female. Marisa is in the 7th grade at a local school. She lives with her biological mother and her stepfather. Marisa has three siblings: one brother and two sisters. Marisa is the oldest child. Marisa’s biological father is inconsistently in her life, and visits with her a couple of times a year. He lives in the same city as Marisa, but doesn’t seem to hold a job long enough for her mother to collect child support. Marisa is the only child from her mother’s first marriage; her siblings were born during her mother’s current marriage. Treatment History Marisa has been to therapy “a couple of times” when she was 6 years old. Marisa’s mother reports that she (mother) has always had difficulty “managing Marisa’s behavior.” Current Treatment Marisa reports that she visits her school counselor sometimes. Current Medical N/A Current Disposition Marisa’s mother has brought Marisa into your office seeking counseling for oppositional behavior. Marisa’s mother reports “Marisa is so disrespectful; she talks back, yells at me, and just won’t do what she is told.” While you are talking with Marisa and her mother they describe a recent argument. Marisa reports that her mother “slapped me” during the argument. Marisa’s mother reports, “She hit me; I had to do something.” As you tell Marisa and her mother that you are a mandatory reporter and start describing what that means, Marisa’s mother gets upset and leaves the office, taking Marisa with her. Notes Due to the intake paperwork, you have the family’s address and demographic information. © 2014. Grand Canyon University. All Rights Reserved. Alternative Assessment MGMT 2023 – Financial Management Section 1 - Compulsory (30 marks) INSTRUCTIONS: Answer all questions in this section. 1. Evaluate the following diagram and explain how the players in the financial market collaborate to acquire funding and ensure economic efficiency. (4 marks) 2. Clarksville Printing Company sold 1,500 finance books for $85 each to University of the West Indies (UWI) in 2019. These books cost Clarkesville $62 each to produce. In the marketing of the books, the Company paid $4,600 to a marketing firm, and it also borrowed $50,000 on January 1, 2019, on which the Company paid 10 percent interest. Both interest and principal are paid on December 21, 2019. Depreciation expense for the year was $8,000 and Clarksville’s tax rate is 25 percent. a. Verify whether Clarksville Printing Company made a profit in 2019, by presenting an income statement in good form. (3 marks) b. Explain the impact of the new loan of $50,000 and the depreciation expense on the cash flows. (2 marks) c. Determine the Operating Cash Flow for Clarksville Company. What accounts for the difference in the net income and the operating cash flow? (2 marks) 3. As the Fund Manager for Ba.

1. Case Study: Marisa
Name: Marisa
Demographics
Marisa is an 11-year-old Hispanic-American female. Marisa is
in the 7th grade at a local school. She lives with her biological
mother and her stepfather. Marisa has three siblings: one
brother and two sisters. Marisa is the oldest child. Marisa’s
biological father is inconsistently in her life, and visits with her
a couple of times a year. He lives in the same city as Marisa,
but doesn’t seem to hold a job long enough for her mother to
collect child support. Marisa is the only child from her mother’s
first marriage; her siblings were born during her mother’s
current marriage.
Treatment History
Marisa has been to therapy “a couple of times” when she was 6
years old. Marisa’s mother reports that she (mother) has always
had difficulty “managing Marisa’s behavior.”
Current Treatment
Marisa reports that she visits her school counselor sometimes.
Current Medical
N/A

2. Current Disposition
Marisa’s mother has brought Marisa into your office seeking
counseling for oppositional behavior. Marisa’s mother reports
“Marisa is so disrespectful; she talks back, yells at me, and just
won’t do what she is told.” While you are talking with Marisa
and her mother they describe a recent argument. Marisa reports
that her mother “slapped me” during the argument. Marisa’s
mother reports, “She hit me; I had to do something.” As you tell
Marisa and her mother that you are a mandatory reporter and
start describing what that means, Marisa’s mother gets upset
and leaves the office, taking Marisa with her.
Notes
Due to the intake paperwork, you have the family’s address and
demographic information.
© 2014. Grand Canyon University. All Rights Reserved.
Alternative Assessment
MGMT 2023 – Financial Management
Section 1 - Compulsory (30 marks)

3. INSTRUCTIONS: Answer all questions in this section.
1. Evaluate the following diagram and explain how the players
in the financial market collaborate
to acquire funding and ensure economic efficiency.
(4 marks)
2. Clarksville Printing Company sold 1,500 finance books for
$85 each to University of the West
Indies (UWI) in 2019. These books cost Clarkesville $62 each
to produce. In the marketing of the
books, the Company paid $4,600 to a marketing firm, and it also
borrowed $50,000 on January 1,
2019, on which the Company paid 10 percent interest. Both
interest and principal are paid on
December 21, 2019. Depreciation expense for the year was
$8,000 and Clarksville’s tax rate is 25
percent.
a. Verify whether Clarksville Printing Company made a profit in
2019, by presenting
an income statement in good form. (3 marks)
b. Explain the impact of the new loan of $50,000 and the
depreciation expense on the
cash flows. (2 marks)
c. Determine the Operating Cash Flow for Clarksville Company.
What accounts for
the difference in the net income and the operating cash flow?

4. (2 marks)
3. As the Fund Manager for Bank of Trinidad and Tobago
Limited, you are to advise the following
two (2) clients based on their respective financial situations.
a. Your best friend has asked to assist him in making the best
investment out of the following
options. Which would you advise him to choose and why,
considering the risks are the same
for all the options. Show all workings to support your answer.
Option 1: $12,000 in 5 years at 6 percent interest.
Option 2: $15,000 in 2 years at 9 percent interest.
Option 3: $15,000 today. No strings attached.
Option4: $5,000 each year for 2 years at 7 percent interest
compounded
semiannually. (3 marks)
2
b. Betty Kay has a contract under which she will receive the
following payment for the next 5
years: $1,000, $2,000, $3,000, $4,000 and $5,000. She will

5. then receive an annuity of $8,500
a year for the end of the 6th through the end of the 15th year.
She is offered $30,000 to cancel
the contract. If the payments are discounted at 14 percent
should she cancel the contract? Show
all workings. (5 marks)
4. You work as the treasurer of a large manufacturing
corporation where earnings are down
substantially as a result of COVID-19. In an environment where
interest rates are going to decline
over the next three to six months, you want to invest in fixed-
income securities to make as much
money as possible for the firm. The board recommends
investing in one of the following securities:
• Three-month Treasury Bill
• Twenty-year Corporate Bonds
• Twenty-year zero-coupon Treasury Bonds
Describe a suitable strategy based on your knowledge of bond
theory, which may allow the
company to maximize its profit if it were to undertake one of
these investments. Further, advise
the board on what is best for the company at this time given
your knowledge of other investment
options in the market. (4 marks)
5. Rhea owns shares in Riko Corp. Currently, the market price
of the stock is $36.34. The
company expects to grow at a constant rate of 6 percent for the
foreseeable future. Its last dividend

6. was worth $3.25. Rhea’s required rate of return for such stocks
is 16 percent. She wants to find
out whether she should sell her shares or add to her holdings.
Calculate the value of this stock and
advise Rhea on what she should do.
(3 marks)
6. You are trying to decide whether to invest in one or both of
two different stocks. The market
risk premium and risk-free rate are 6 percent and 4 percent
respectively.
Beta Expected Return
(%)
Stock 1 0.8 7.0
Stock 2 1.2 9.5
Use your knowledge of the CAPM and the SML which you
learnt in this course and determine
whether you should invest in either, one, or both of these
stocks. Provide all workings to support
your answer. (4 marks)

7. 3
Section 2 - CASE ANALYSIS (30 marks)
INSTRUCTIONS:
1. Read the case below carefully and answer ALL the questions
which follow.
2. Your answers may be entered using a Microsoft Excel
spreadsheet OR may be entered in a table
format using Microsoft Word.
HEALTHY OPTIONS INC.
Healthy Options is a Pharmaceutical Company which is
considering investing in a new production line
of portable electrocardiogram (ECG) machines for its clients
who suffer from cardiovascular diseases.
The company has to invest in equipment which costs $2,500,000
and falls within a MARCS
depreciation of 5 years, and is expected to have a scrap value of
$200,000 at the end of the project.
Other than the equipment, the company needs to increase its
cash and cash equivalents by $100,000,
increase the level of inventory by $30,000, increase accounts
receivable by $250,000 and increase
accounts payable by $50,000 at the beginning of the project.
Healthy Options expects the project to
have a life of five years. The company would have to pay for

8. transportation and installation of the
equipment which has an invoice price of $450,000.
The company has already invested $75,000 in Research and
Development and therefore expects a
positive impact on the demand for the new product line.
Expected annual sales for the ECG machines
in years one to three are $1,200,000, and $850,000 in the
following two years. The variable costs of
production are projected to be $267,000 per year in years one to
three and $375,000 in years four and
five. Fixed overhead is $180,000 per year over the life of the
project.
The introduction of the new line of portable ECG machines will
cause a net decrease of $50,000 in
profit contribution after taxes, due to a decrease in sales of the
other lines of tester machines produced
by the company. By investing in the new product line Healthy
Options would have to use a packaging
machine which the company already has and which will be sold
at the end of the project for $350,000
after-tax in the equipment market.
The company’s financial analyst has advised Healthy Options to
use the weighted average cost of
capital as the appropriate discount rate to evaluate the project.
Information about the company’s sources
of financing is provided below:
• The company will contract a new loan in the sum of
$2,000,000 that is secured by machinery
and the loan has an interest rate of 6 percent. Healthy Options
has also issued 4,000 new bond
issues with an 8 percent coupon, paid semiannually, and which

9. matures in 10 years. The bonds
were sold at par, and incurred floatation cost of 2 percent per
issue.
• The company’s preferred stock pays an annual dividend of 4.5
percent and is currently selling
for $60, and there are 100,000 shares outstanding.
• There are 300,000 million shares of common stock
outstanding, and they are currently selling
for $21 each. The beta on these shares is 0.95.
Other relevant information about the company follows:
The 20-year Treasury Bond rate is currently 4.5 percent and you
have estimated market-risk premium
to be 6.75 percent using the returns on stocks and Treasury
Bonds from 2010 to 2019. Healthy Options
has a marginal tax rate of 25 percent.
As a recent graduate of the UWIOC, The General Manager of
the company has hired you to work
alongside the Financial Controller of the company to help
determine whether the company should invest
in the new product line. He has provided you with the following
questions to guide you in your
assessment of the project and to present your findings to the
Company.

10. 4
REQUIRED:
7. Determine the weighted average cost of capital (WACC) for
Healthy Options. (9 marks)
8. Calculate the initial investment cash-flows. (2 marks)
9. Calculate the after-tax operating cash-flows. (10 marks)
10. Determine the tax on salvage value of the equipment, then
show the terminal year cash-flows.
(3 marks)
11. Identify three (3) relevant cash flows which were mentioned
in the case and how they should
be treated in the capital budgeting decision. (3 marks)
12. Taking into consideration all the information given,
determine the Net Present Value of the
project and advise the company on whether to invest in the new
line of product. (3 marks)
(Use your answer to Q7 rounded to the nearest whole in the
calculations of the other questions where
necessary.)

11. 5

12. TIME VALUE TABLES
6
7
MGMT 2023
Suggested Formula Sheet
Cash Flow from Assets = Cash Flow to Creditors + Cash Flow
to Stockholders

13. Operating Cash Flow Interest Paid Dividend Paid
- DNet Working Capital - Net New Borrowing - Net New
Equity
- Net Capital Spending Cash Flow to Creditors Cash Flow to
Stockholders
Cash Flow from Assets
EBIT Ending Net Fixed Assets
+ Depreciation - Beginning Net Fixed Assets
- Taxes + Depreciation .
Operating Cash Flow Net Capital Spending
Ending Net Working Capital (CA – CL)
- Beginning Net Working Capital (CA-CL)
Change in Net Working Capital
Ending L.T. Debt Ending Equity
- Beginning L.T. Debt - Beginning Equity
Net New Borrowing - Addition to Retained Earnings
Net New Equity
IncomeTaxable
LiabilityTax
RateTaxAverage =
sLiabilitieCurrent
sInventorie-AssetsCurrent
RatioQuick =

14. sLiabilitieCurrent
AssetsCurrent
RatioCurrent =
Interest
EBIT
EarnedInterest Time =
Interest
onDepreciatiEBIT
Ratio CoverageCash
+
=
Assets Total
Equity Total-Assets Total
Assets Total
Debt Total
RatioDebtTotal ==
TA
DE
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EMor
-
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1

15. 1
1
Equity
Assets Total
MultiplierEquity
Equity Total
Debt Total
RatioEquity -to-Debt =
8
Cash Cycle = Operating Cycle – Accounts Payable Period
Price-Earnings Ratio = Market price per share/ EPS
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E(Rp) = WA*E(RA) + WB*E(RB)
R = E(R) + U
WACC = WE*RE + WP*RP + WD*RD*(1-tc)
Modified Accelerated Cost Recovery System

22. Property Class
Year 3-Year 5-Year 7-Year
1 33% 20% 14%
2 45% 32% 25%
3 15% 19% 18%
4 7% 12% 12%
5 12% 9%
6 5% 9%
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27. 3
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PCN-545 Treatment Plan Template
Directions: Complete the treatment plan template for the case
study of Marisa. An example has been provided for you. Once
the table is completed, address the questions listed below the
table. Your response to each question should be 100-125 words.
You must cite the specific legal standards of the state in which
you plan to practice when answering the questions.
Example:
Date
Problem Statement
Goal
Objective
Length of Service
Goal Date
When was this goal created?
In the clients own words :
“I want to worry less”
In clinical words, what will it look like by the end of treatment?
Relate back to the problem statement.

28. Client will reduce worry from daily to weekly
What methods of treatment and frequency will you use to
achieve treatment goals?
Weekly talk therapy meetings. Weekly DBT
How long will treatment be?
Client will attend individual therapy for 8 weeks; client will
attend group therapy for 13
When will this particular goal be achieved?
Client reduce worry from daily to weekly by 3/15/17
Client Name: <Enter Client name>
Date
Problem Statement
Goal
Objective
Length of Service
Goal Date

29. Client Signature and Date
Counselor Signature and Date
1. At what point will you report Marisa's situation to the state?
(use the state in which you plan to practice)
2. If you were to report the situation, where would you report it
(e.g., agency/organization)? Why?
© 2014. Grand Canyon University. All Rights Reserved.
© 2014. Grand Canyon University. All Rights Reserved.