Strategic Investment Decisions Involving Valuable Business...
Valuation Questions
Question 1:
A strategic option is a valuation approach applied by firms when making strategic investment
decisions involving valuable business opportunities. The approach is premised on the idea of
remedying the shortcomings of DCF analysis model. This approach allows firms to value
investment opportunities by ascertaining on future value benefits that a specific project would bring
to firm, rather than looking at cash flow. Strategic options enable the management to formulate
strategic decisions to inform on future opportunities that would be created through today's
investments. Possible future operations are valued using strategic options, as no cash flow is
analyzed, but rather analysis of opportunity for investing ... Show more content on Helpwriting.net
...
Thus, during valuation the firm must undertake strategic mapping on these elements to select real
investment project.
However, strategic option is subject to abuse – particularly due to absence of any formal valuation
procedures. This means that strategic option can be highly politicized by the management. In
practice, this valuation approach is myopic and may lead firms to undervaluing the future, and thus,
to under–invest by deferring viable investment projects. Also, at times managers may use strategic
options by inputting informal procedures or personal bias by deliberately championing or defending
certain investment opportunities – causing overinvestment.
Question 2:
Adjusted Present Value (APV) approach is an income–based valuation method employed as a
variant to DCF tool, but does not use any WACC calculation. By using APV method, one can
ascertain enterprise value by separating out as well as accounting for tax attributes of
debts/borrowing and inherent incremental bankruptcy risk associated with additional debt. During
valuation, the APV approach measures a firm's enterprise value (EV) as the value of a company
devoid of debt ('unlevered enterprise), plus prevent value of tax savings from company's debt.
Specifically, APV valuation estimates unleveraged cost of equity most often using CAPM approach,
expected cash flow of an
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The Determinate And Impact Of Optimal Leverage Ratio
The Determinate and Impact of Optimal Leverage Ratio
Leverage ratio is a key factor of a company which is closely related with company's capital
structure, financing cost and financial strength. Many research paper analyzed how to determine the
optimal leverage ratio and explained why companies should use leverage.
Theoretical Literature
Pareja (2008) built theoretical model about weighted average cost of capital (WACC) of companies
which use leverage finance. They argued that the traditional opinion that believed leverage ratio was
the most important factor in determine WACC and when leverage ratio is constant, WACC is
constant does not hold true when pricing finite free cash flow. They used a numerical example
showed that WACC is depend on the discount rate which is used to pricing tax shield. If we assume
that the discount rate for tax shield is simply cost of debt and leverage ratio is constant, WACC will
not be constant. In this case, they must make some more assumption other than constant leverage
ratio to ensure the constant WACC. In the end, they found that the sufficient conditions of constant
WACC are 1. There is enough EBIT to fully earn the tax shield, 2. Taxes are paid when accrued, 3.
The risk of TS is cost of unleveraged cost, 4. Tax rate T, is constant, 5. Interest rate on debt is equal
to the (market) cost of debt.
Empirical Literature
Castro (2016)'s research built a model to describe the target leverage and speed of adjustment across
three life cycle

Boeing 7E7 Case Study Essay
Executive Summary A key factor in determining a project's viability is its cost of capital [WACC].
The estimation of Boeing's WACC must be consistent with the overall valuation approach and the
definition of cash flows to be discounted. Note that this process is a forward looking focus and is
laden with uncertainty. It is how the assumptions are modeled that many costly mistakes can be
made. While finding a rate of return for an individual project, it is important to remember that
WACC is only appropriate for an individual project. The many factors affecting WACC are: general
economic conditions, market conditions, the firm's operating and financial decisions, amount of
financing, business risk, constant financial ... Show more content on Helpwriting.net ...
The interest coverage ratio for 2002 was 5.30 and the current ratio was 0.85 . See also the
Appendices for other relevant Boeing statistics. Analysis of Boeing's 7E7 Project It is suggested that
the travel industry and the aerospace and defense industry as a whole will continue to grow on the
basis of the strong demand emanating from domestic demand as well as globalization. This may
give a major boost to the demand for 7E7s as the airlines are already concerned about high fuel
costs intensifying out of increased demands from emerging economies like India and China and
reduced production. Better design modifications is going to be a major strength for the 7E7 as
Boeing is betting on the future of small–mid size airplanes which can fly short as well as long
distances with its fuel efficient engines. From an investment perspective, with interest rates at it's
lowest in decades, with 911 behind us, and barring a major pandemic such as SARS, the timing
seems right for Boeing to pursue this endeavor. Nevertheless, as Boeing gears up for its all–new 7E7
airliner, arch rival Airbus may already be putting 7E7 orders at risk by talking to airlines about a
similar plane. Airbus is viewed a having advanced technologies coupled with a conglomerate
backing and Boeing has not come up with any new innovative ideas in the last ten

HCS 405 Week 1 Health Care Financial Terms Worksheet Paper
HCS 405 week 1 Health Care Financial Terms Worksheet Paper Introduction The HCS 405 week 1
financial terms worksheet throws light on some of the most basic concepts of the healthcare
business. Understanding health care financial terms is a prerequisite for both academic and
professional success. The health care business helps the nation by providing the building blocks that
the citizens need to live a successful and healthy life. The worksheet is intended to ensure that the
students understand some of the basic terms used in the business world of the health care industry.
The purpose of HCS 405 individual and team assignments is to make the students aware about the
numerous strategies employed in the financial and other departments of a ... Show more content on
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This assignment is intended to ensure you understand some of the basic terms used in this course.
Complete the worksheet below according to the following guidelines: In the space provided, write
each term's definition as used in health care management. You must define the term in your own
words. In the space provided after each term's definition, summarize a health care management
scenario that illustrates the importance of the skill, concept, procedure, or tool to which the term
refers. In the scenario, you may wish to consider the following: Why is the skill, concept, procedure,
or tool necessary for accurate record keeping, operational efficiency, excellent patient services,
employee management, regulatory compliance, reducing costs, forecasting, and so forth? What
successes are enabled by an adequate understanding or appropriate application of the skill, concept,
procedure, or tool? What risks or failures are associated with an inadequate understanding or
inappropriate application of the skill, concept, procedure, or tool? Save the completed worksheet as
a Microsoft® Word document with your name in the file name. Submit the file to your instructor.
About Author This article covers the topic for the University Of Phoenix HCS 405 Final Exam. The
author is working in the field of education from last 5 years. This article covers the basic of HCS
405 Individual Assignment from UOP. Other topics

Financial Accounting And Reporting Standards
Financial Accounting and Reporting Standards
Jeremy J Boston
Saint Leo University Abstract Financial accounting has become more complex as our country
grows. The United States has established a core financial body to ensure all financial statements are
published within the prescribed guidelines so that any creditor or investor is able to read and
understand the information. The FASB was created to ensure that these guidelines are followed and
they are well–paid individuals so there is little chance of them keeping ties with their private firms
which creates a trust with the public. The FASB crated a conceptual framework that all companies
must adhere to. This ensures that investors, creditors and the public receive an honest ... Show more
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Financial Statements and Financial Reporting
Challenges
Along with the demand for a more universal form of accounting report come many challenges.
Many of them are in the form of the Sarbanes–Oxley Act. Scandals within the accounting
departments in companies such as Enron, Rite Aid, and Xerox caused this act to be created. The
Sarbanes–Oxley Act created the Securities and Exchange Commission, SEC, which helped
standardize all financial information that was passed along to the stockholders. Auditors were
affected as a part of the act in the sense that they became more independent and strong. The audit
committee's became independent members with prior financial expertise. They were however
limited to no more than a 5–year partner rotation within their respective firms. CEO's and CFO's
were also to be help more accountable for their financial reporting. CEO's and CFO's are now
required to personally sign off and certify financial statements. If there is a mistake they forfeit their
entire bonus. Within each organization there is also requires being an internal checks and balances
process to prevent and detect possible fraud. Most of all, there the Sarbanes–Oxley Act establishes a
code of ethics for all senior financial officers. This act is to ensure that public trust is maintained at
all times.
Objectives
According to Keiso, Weygandt, and Warfield (2013), Financial reporting's goal is to "provide
financial information about

Mercury Athletic: Valuing the Opportunity Essay examples
Summary
The background of this paper we need to mention is that West Coast Fashions, Inc. (WCF), a large
designer and marketer of branded apparel announced a strategic reorganization calling for a
divestiture of certain assets, and one of the divisions it intended to shed was Mercury Athletic, its
wholly owned footwear subsidiary. John Liedtke, the head of business development for Active Gear,
Inc. (AGI), a privately held athletic and casual footwear company, contemplated an acquisition
opportunity of Mercury that would significantly improve his business. So, he wanted to evaluate this
opportunity.
This paper introduces the basic situation and feathers of current athletic and casual footwear
industry and raises that active management of ... Show more content on Helpwriting.net ...
Also using the average tax rate of 40%, we can estimate the unlevered beta. Unlevered beta =
1.5578/[1+(1–0.4)*0.249]=1.355316 Levered beta = 1.355316[1+(1–0.4)*0.25]=1.558613 After–tax
cost of debt = 0.06*(1–0.4)=0.036=3.6%
Cost of equity = riskless rate + Beta (Risk premium) = riskless rate + Beta (riskless rate – expected
market return) = 4.69%+ 1.558613*(9.7%–4.69%)=0.124987=12.4987%
WACC= Cost of Equity* Weight + After–tax Cost of Debt* Weight = 12.4987%*(1–
20%)+3.6%*20%=0.10719=10.719%
If the leverage increases from expected level, D/C will increase, the levered beta will increase, the
cost of equity will increase, the after–tax cost of debt will keep the same. In addition, the weight of
the after–tax cost of debt will increase and the weight of the cost of equity will decrease. It looks
like that it is difficult to determine how WACC will change. However, according to the Figure 3–8
about the effects of capital structure in Chapter 15, we can find that when the debt ratio is 40%,
WACC reaches the minimum value, so in this case, when the leverage change from 20% to 40%,
WACC will decrease, and when the leverage bigger than 40%, WACC will increase.
On the other side, if the leverage decrease from

A Summary and Technical Analysis of the Under Armour, Inc....
Abstract
Under Amour, Inc. is a performance based apparel company that is quickly growing to become one
of the top companies in the industry. They are known for high–quality, innovative products that are
giving athletes a competitive advantage. This paper describes the history of the company, analyzes
the company's performance and required rate of return, discusses the projected future growth rate of
earning, values the company, and provides a recommendation to buy stock at the estimated price
target of Keywords: stock analysis, return on equity, projected future growth rate, required rate of
return, intrinsic value A Summary and Technical Analysis of the Under Armour, Inc. (UA) Stock on
the New York Stock Exchange Under ... Show more content on Helpwriting.net ...
Although Under Armour has done well over the past few years, they face though competition from
top players like Nike and Adidas. These larger companies have more resources and a greater
presence in the international market. There is also a threat of new entrants, and since UA does not
hold patents for its products, new and existing companies may begin to compete for a spot in the
performance apparel market. Other threats include the company's limited bargaining power
(resulting from their diverse supplier base) and the leverage held by wholesale customers.
Fortunately, UA does have the advantage of strong brand recognition, a reputation for innovative
and high–quality products, and testimonials of world–renowned athletes, minimizing the threat of
substitute products. Although the company was established more than fifteen years ago, Under
Armour, Inc. continues to be in the growth phase of its life cycle. Revenues this quarter increased
almost 23% year over year, and the Compound Annual Growth Rate (CAGR) for the last five years
is about 24%. This is higher than the average quarterly revenue growth (Y/Y) of 8% for the apparel
industry, and places UA above eight percent of its competitors. UA has also outperformed most of
its competitors in quarterly Earnings Per Share (EPS) growth. With an EPS Growth (Qtrly YoY) of
166.7%, the company is ranked 5th of the 152 in the textile–apparel industry, as reported by Yahoo
Finance. This past quarter the

Atmospheric System Essay
'Low pressure atmospheric systems have more of a short term impact than high pressure systems.'
Discuss. Low pressure atmospheric systems are also known as depressions or cyclones and they
form in mid– and high–latitudes. They are formed by the mixing of cold and warm air, the warm air
is lighter, so it rises above the denser, cold air and forms a centre of low pressure. High pressure
atmospheric systems are also known as anticyclones and have very different characteristics to
depressions. Anticyclones are large masses of subsiding air, which produces high pressure at the
surface. There are a variety of difference between anticyclones and depressions, including the
weather conditions, the length of time they last and the impact they ... Show more content on
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The impacts of anticyclones and depressions vary, as does the period they remain and the effect they
have. The North American blizzard of 2003 lasted for five days throughout February and occurred
on the East Coast of the USA and Canada. It was a record–breaking blizzard, which caused 27
deaths and over $14 million worth of damage. The cities in America were bought to a standstill, as
there was a range of 38–76cm of snow covering the ground. The cause for such an unusually
extreme blizzard was the fact that the conditions were favourable, with moisture from the Atlantic
Ocean enhancing precipitation and a high pressure system over Canada, allowing cold air to be
brought down coastal areas. This meant that the precipitation was mainly snow, hence the record–
breaking statistics. The effects this storm had were mainly short–term, but the roof of the historic
Railroad Museum collapsed and 27 people lost their lives. Additionally, transport infrastructure was
brought to a halt, and three major airports were also closed.
So, the impacts of depressions are mainly short–term, although the destruction can be horrendous,
whereas, anticyclones usually cause long–term impacts on a country such as the Drought in Britain
and Europe in 2003. This drought effected many locations, but the main focus was on the UK,
France and Portugal. Not all impacts are negative, as the heat wave did boost the tourist industry in
most countries and sales for summer items such as

Boeing777Casestudysolution
The Boeing 777
Darden Case Study UVA–F–1017
Case Study Assignment
Subject: Cost of capital − cost of equity and cost of debt; beta risk; estimation; capital structure. The
task for students is to evaluate the 777 against a financial standard, the investors' required rate of
return. The general objective of this case is to exercise students' skills in estimating corporate
(divisional/project) costs of capital – cost of equity and WACC. Case Questions, Analysis, and
Directions: Read and analyze the case, and prepare an "Executive Summary" of this case. Write it as
if you were writing it to the members of Boeing's Board of Directors, who may not know much
about the project or finance. Your Executive Summary will include: (1) A brief ... Show more
Search for any recent stories about the 777 project and discuss briefly the project's progress and
success.
Notes and Hints: The WACC is equal to the weighted average of the component capital costs, e.g.,
the weight in debt times the after–tax cost of debt financing plus the weight in equity times the
after–tax cost of equity financing corresponding to the leverage: WACC = (D/V)*Rd*(1− tax rate) +
Re*(E/V), where "tax rate" = marginal corporate tax rate (assume 34%), Rd = the before–tax cost of
debt (info about the premium above long–term government rates is provided in tables), Re is the
cost of equity, D and E are the market values of debt and equity. V = (E + D). Remember that the
higher leverage means the higher equity risk (and cost of equity Re) and that you will have to "un–
lever" and "re–lever" your firm's cost of equity and any other firm (pure–plays) when evaluating a
project in a specific division. Note that your firm (and comparable "pure–play" firms) may have
different leverage (capital structures) than the target leverage of your firm and estimated equity
'betas' will reflect the past leverage!! Also, your firm may have several divisions and the individual
divisional projects may have different risks and thus different costs of capital!! Pay special attention
to the information and questions under the "The 777" case segment (pages 6–9). State your
parameters & assumptions very clearly. Someone looking at your analysis should be

Advantages And Disadvantages Of Financing For Jacqui Llc
A small business with no revenue, no track record and no sales screams high–risk. Luckily, there are
other pockets to pick to help your small business get the financing it needs to grow and thrive .In
these essay want to explain about other potential sources of financing for Jacqui LLC . And I
explain about the advantages and disadvantages of using equity capital and debt capital to finance a
small business's growth. And I give for Jacqui Rosshandler to investment offer from Arthur Shorin.
Finding the money to start their small businesses is usually one of the first problems that
entrepreneurs face. For most people, this process can be hard and very frustrating. What makes this
process frustrating is a combination of wrong expectations and ... Show more content on
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The last one Venture capitalists. It is finance provided for an equity stake in a potentially high
growth company. .
Debt and equity financing are your two basic options to raise money for a start–up company or
growing business. Debt financing includes long–term loans you get from the bank. Equity financing
is private investor money you get in exchange for a share of ownership in the business. Now I want
to explain about the advantages and disadvantages of using equity capital and debt capital to finance
a small business's growth. The advantages of Debt is financing allows you to pay for new buildings,
equipment and other assets used to grow your business before you earn the necessary funds. This
can be a great way to pursue an aggressive growth strategy, especially if you have access to low
interest rates. Closely related is the advantage of paying off your debt in installments over a period
of time. Relative to equity financing, you also benefit by not relinquishing any ownership or control
of the business. Interest on the debt can be deducted on the company's tax return, lowering the
actual cost of the loan to the company. Raising debt capital is less complicated because the company
is not required to comply

Angus Cartwright
Angus Cartwright Case Study
In September 2003, John DeRight and Judy DeRight, both cousins, decided that they both wanted to
invest in real estate. The cousins felt that real estate would allow them the "benefits of
diversification, protection from future inflation, and tax advantages." John, a risk averse person, was
a retired businessman and was willing to spend $9 million in this investment. John would rely on
stock dividends and other income that totaled approximately $1 million. On the other hand, Judy
was a risk tolerant businesswoman who owned her own chemical company and had $16 million of
funds available for investment. Judy's after–tax income came out to be approximately $1.1 million.
The cousins contacted Angus Cartwright ... Show more content on Helpwriting.net ...
Of the four properties, Stony Walk has the highest net cash from sale ($8347.87), net book value
($9649.72), amortization and reserve, taxable income, tax benefits, and monthly mortgage rate
($8000). However, Stony Walk has the lowest gain on sale. The next property presented to John and
Judy was Ivy Terrace, an 80–unit apartment under construction in Arlington, Virginia. Even though
this property has the lowest Net Present Value ($619) and lowest monthly mortgage ($5,500), there
exist the greatest increase in Cap Rate from purchase to sale price (9.12% to 9.51%). Based on
calculations, 72% of total benefits will be derived from cash flow while 41% of total benefits will
come via future value. This property has the second highest After Tax Cash Flow (ATCF) but has
the lowest remaining loan balance at sale ($4583.03), net cash from sale ($4868.34), net book value
($5545.45), and capital gains. Ivy Terrace has the highest depreciation and has the lowest percent of
total benefit from future value and lowest amortization and reserve among the four properties.
Finally, the developer of Ivy Terrace guarantees 93% occupancy. The final property Cartwright
presented to John and Judy DeRight was the Fowler Building, a two–story 60,000 square foot office
building that was still under construction. This property has the highest profitability index and
breakeven occupancy but has the lowest

Generally Accepted Accounting Principles in Health Care
Generally Accepted Accounting Principles in Health Care Basic financial statements are valuable
documents in the management of health care organizations. Financial statements are helpful in the
management of health care organizations and determination of their credit worthiness. Investors and
other stakeholders also find the statements highly beneficial in determining the appropriateness for
investment in the health care organization. Accepted accounting principles are conventions set to
regulate formalized systems of accounting; especially applied in America. Set by the financial
accounting and standards board, accepted accounting principles guide the preparation of basic
financial statements in all organizations (Riahi–Belkaoui, 2004). The basic financial statements
include the balance sheet, cash flow statement, statement of changes in the organization's assets and
statements of operations. Health care organizations must adhere to generally accepted accounting
principles that are relevant to their operations. Different accepted accounting principles are
applicable to the management of health care organizations and preparation of financial documents.
Since most health care organizations must conform to the auditing standards by CPA, they must use
the various accepted accounting principles.
The concept of matching of cash versus accrual systems The accrual principle requires that all
current transactions should be on record at the time of their occurrence. Recording

Mortgage Component For The Fairfield Of Tallahassee
For this section of the report, we will take into consideration the applicable costs in development of
the proposed lodging facility in conjunction with our forecasted operating statement and the
financing components involved in the project. We intend to forecast an estimate of return given the
assumptions of the project.
Mortgage Component
For the Fairfield of Tallahassee, we will use the provided term sheet to assume that suggest a
blended interest rate of 5.28% percent, 20–year amortization mortgage with a 0.08164 constant, and
an 80 percent loan–to–value ratio is appropriate. The term sheet of the loan will be provided in the
addenda of this report
Estimate of Equity Yield Component
The remaining capital required ... Show more content on Helpwriting.net ...
Equity Yield
We have forecasted the equity yield to be earned by the equity investor to be approximately
$4,099,171.51 based upon the assumption of a required 18% return. The results are summarized in
the following table.
Conclusion
In determining the potential feasibility of the Fairfield of Tallahassee, we analyzed the lodging
market, researched the area's economics, reviewed the estimated development cost, and prepared a
forecast of income and expense. Given the assumptions made in the content of this report the equity
and debt investor should be provided a positive return which confirms the feasibility of the
acquisition for the Fairfield of Tallahassee.
We hereby certify that we have no undisclosed interest in the property and our employment and
compensation are not contingent upon our findings. This study is subject to the comments made
throughout this report and to all assumptions and limiting conditions set forth herein. The
conclusions presented in this report are based upon the information available and received at the
time the report was filed. NHCG has taken every possible precaution to evaluate this information for
its complete accuracy and reliability. Parts of this report were prepared or arranged by third–party
contributors, as indicated throughout the document. While third–party contributions have been
reviewed by NHCG for reasonableness and consistency for including in this report, third–party
information has not

Factors That Influence Rainfall in the United States
Factors that Influence Rainfall in the United States
A type of precipitation is rainfall and it develops when water vapor condenses into droplets in the
atmosphere thus becoming too heavy to stay suspended in the air so gravity causes them to fall. The
pattern or occurrence of rainfall in the United States or basically anywhere in the world depends on
several factors such as ground elevation, wind directions, location within a continental mass, areas
of low pressure, cool fronts, jet streams and even mountain ranges. For instance mountains have an
influence on wind and wind is an important feature in rainfall, "The windward sides of mountainous
islands in the trade wind regime are among the rainiest places on earth, where rains exceed ... Show
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When the pressure is 'high' it means that the air's pressure is higher than the pressure of the
surrounding air in the area. A 'low' is where it is lower. This means that where the air is slowly
descending the pressure is high and vice versa. So, as air descends, it warms, which inhibits the
formation of clouds. This means that the air that descends in high pressure area has to get to high
altitudes in some way which is why air actually rises in low pressure areas. Winds tend to blow into
low pressure areas because are moves from higher pressure areas into lower pressure areas. When
the wind moves into a low area the air moves up and eventually cools and rainfall comes about.
Also the low pressure that causes the air to rise has to do with the Criolis Effect, which is the force
caused by the Earth's spin that redirects moving air to the right in the Northern Hemisphere and to
the left in the Southern Hemisphere. According to meteorologist Tony Pann, who works with
Coriolis Effect stated, "With the Coriolis effect, air circulates in patterns that depend on latitude. At
the mid–latitudes of the USA, most weather systems move from west to east. However, systems
tend to move from east to west near the poles and in the tropic" (Pann). The upslope flow is also
related low pressure areas which is basically the result of air rising and cooling while being forced
to ascend to higher terrain.

Calaveras Vinesyard Case
Warute Phanthumkmol
Calaveras Vineyards Case
Dear Dr. Lynna Martinez,
After reviewing your projections of Calaveras Vineyards, I used the adjusted present value method
to come up with the value of the company. With this method, I assume that the whole firm is
financed only through equity. Therefore, when calculating the free cash flow, debt was not taken
into account. Despite that, the net present value of interest shields is added back to compensate the
debt in the capital structure. With this method, the company is valued at $9.62 million.
In order to assess Calaveras' value, I calculated the free cash flow from 1994 to 1998. The free cash
flow from each year derived from adding Earnings before Interest and Taxes, ... Show more content
on Helpwriting.net ...
You were hired back then to develop and implement a strategy to lift the company out of the bulk–
wine category and into the premium–brand segment of the market. In addition to that, your resume
is stronger than the others. Your education is better than the others and you had a lot of experience
in directing the making of wine. Not only that you trained in family–owned winery and distillery,
but you also gained a lot of experience in champagne and white–wine technology at the Moet et
Chandon installation in Epernay when you took trips to Europe.
Please note that if you decide to buy the company, you might become more conservative. Currently,
you are the vice president/general manager and winemaker of Calaveras. If you buy the company as
proposed, you will own 85% of the company. This means that you will relate to the company in two
ways; as a manager, and also an owner. Therefore, I am assuming that you will become more
conservative because it's always better to expect less, so you wouldn't forecast too positively. A
reduction in forecasted real growth rate from 2% to 1–1.5% is what I am expecting you might do.
Thank you. Please do not hesitate to ask if you have any further questions.
Best regards,
Warute

Chapert 13 Quiz
CHAPTER 13 – MULTIPLE CHOICE QUESTIONS
1. Managerial accounting information is generally prepared for a. shareholders b. creditors c.
managers d. regulatory agencies
C is correct.
Section "Management accounting basics" – Management accounting focuses mainly on the
preparation of reports for the internal users of financial information, i.e. managers are all levels of
the entity.
2. Managerial accounting information a. relates to the entity as a whole and is highly aggregated b.
relates to sub–units of the entity and may be very detailed c. is prepared only once a year d. is
constrained by the requirements of generally accepted accounting principles
B is correct.
Section "Management accounting ... Show more content on Helpwriting.net ...
Both direct materials and indirect materials are classified as a. raw materials b. manufacturing
overhead c. merchandise inventory d. non–current assets
A is correct.
Section "Management cost concepts" – Both direct and indirect materials are included in raw
materials.
24. The work of factory employees that can be physically associated with converting raw materials
into finished goods is classified as a. manufacturing overhead b. indirect materials c. indirect labour
d. direct labour
D is correct.
Section "Management cost concepts" – The work of factory employees that can be physically and
economically traced to converting raw materials into finished goods is considered direct labour.
25. Which one of the following would not be classified as manufacturing overhead? a. Indirect
labour b. Direct materials c. Insurance on factory building d. Indirect materials
B is correct.

Section "Management cost concepts" – Direct materials are classified as direct materials, not
manufacturing overhead.
26. In manufacturing a product, prime costs are a. raw materials and manufacturing overhead b.
indirect materials and manufacturing overhead c. indirect labour and manufacturing overhead d.
direct materials and direct labour
D is correct.
Section "Management cost concepts" – Direct materials and direct labour are often referred to as
prime costs because of their direct association with the manufacturing

Essay on Calaveras Vineyards
To: Dr. Lynna Martinez
Subject: Calaveras Vineyards Valuation
As per your request, my associates and I have calculated a valuation for Calaveras Vineyards using
the present value of cash flows. We used the valuation of future cash flows method in order to value
to value the company. We have come to the conclusion, based on a number of future projections,
that the best valuation of the vineyards is $4,356,000 in assets and $1,104,000 in equity.
The process at determining this valuation was as follows:
1. First, using the projected EBIT forecasted income statement; we took out the 37% tax, change in
working capital, and CAPEX for 1994–1998 and added back the depreciation and amortization
expenses to arrive at free cash flows. We ... Show more content on Helpwriting.net ...
The range that we chose to use for growth rates was 1%, 1.5%, 2%, and 2.5%. We believe that
Calaveras will continue to produce a high quality wine upholding a strong brand name and position
in the market. Along with this, we believe that the wine industry as a whole will be growing into the
future because of a growing economy. These rates represent indefinite growth; therefore, we are
positioning your company to be growing slightly above the industry average.
The free cash flow that we used to calculate the terminal value was from the year 1997. We did this
because we felt that the cash flow in 1998 was not a true representation of future cash flows. In
1998, there was a large drop in current liabilities due to the drop in current loans; this caused the
change in working capital to be unusually high. We believe, Calaveras will return to normal levels
of working capital. This will be after the new marketing push and establishment of more revolving
line of credit for planned future growth in sales.
5. We discounted the terminal values of free cash flows at the same discount rate that we discounted
the free cash flows. We then averaged the range of present value terminal values to get an average
present terminal value of free cash flows. This value was $1,820,000.
We then calculated the terminal values of the interest tax shields by taking the 1998 interest tax
shield and using the terminal value

A Firm 's Total Market Value
The results obtained from the cooperation of Modigliani and Miller in 1958, was an attempt to
prove that the financial decisions should not be significant in the perfect conditions of the market,
after being published the Modigliani and Miller theory became the main theory of the capital
structure.
In the M&M theory it suggested that the market is fully efficient, meaning that there are no taxes,
however in the theory Modigliani and Miller included the taxes to be able to reflect their theories in
reality, and the theory also suggested that there are no bankruptcy costs.
There are three propositions that were published by Modigliani and Miller which are:
Proposition 1: A firm's total market value is independent of its capital structure. ... Show more
Modigliani & Miller applied their theories with two modules, one which doesn't include the taxes
and this is their first findings, and another one with taxes to make it more realistic.
The First Proposition without taxes:
In this part Modigliani & Miller stated that the firm's value is not affected by the structure of the
capital between Equity and Debt, They proved this by having an example of two firms that has got
the same conditions in everything, same cash flow, same operational risks and same opportunity
costs. One of the firm's capital structure is all equity and the other firm's capital structure is a
mixture between equity and debt, since the form of financing (debt or equity) can neither change the
firm's net operating income nor its operating risk, the values of levered and unlevered firms will be
the same.
They have concluded that the value of the levered firm = the value of the unlevered firm, only if
they have the same conditions, same risk levels, cash and opportunity cost.
This approach were formed without applying the taxes, but with including the taxes it should be as
the following:
The First Proposition with taxes:
In this section Modigliani and Miller applied the first proposition approach with taxes, findings to
this is that the capital structure directly impact the firm's market value, this is because M&M found

A Study Of Bitopological Spaces
Abstract. In 1995, A.A. Nasef and T. Noiri [6] introduced the notion of strongly
 – irresolute functions. In the present paper, we generalize this notion to the setting of
bitopological spaces and obtain some characterizations and properties of pairwise strongly semi–
preirresolute functions.
AMS Mathematics Subject Classifications (2010): 54E55, 54A05, 54C10, 54D05.
Key words and phrases: semi–preopen, (i, j)–semi–preopen, semi–preirresolute, pairwise strongly
semi–preirresolute.
1. Introduction and preliminaries
The study of bitopological spaces was initiated by Kelly [4] in 1963. Abd ElMonsef et al. [1]
introduced the notion of
 –open sets and
 –continuity in topological spaces. On the other hand, Andrijevic [2] called
 –open sets semipreopen and obtained many properties of such subsets. Recently, Khedr et al. [5]
have investigated the notions of semi–preopen sets and semi–precontinuity in bitopological spaces.
In 1995, Nasef and Noiri [6] defined and studied the concept of strongly
 – irresolute functions. The purpose of the present paper is to extend the concept of strongly  –
irresoluteness to the setting of bitopological spaces.
Throughout the present paper, (X, 1, 2) and (Y, 1, 2) always mean bitopological spaces. For a
subset A of a space X, i–c1(A) (resp. i–int(A)) denotes the closure (resp. interior) of A with
respect to i
, for i = 1,2. However, i–c1(A) and
i–int(A) are briefly denoted by c1i(A) and inti(A), respectively, if there is no possibility of

Using Discounted Cash Flow
Introduction
This assignment is to analyse and discuss the use of Discounted Cash Flow "DCF" to value Henkel
AG.
Discounted Cash Flow Valuation is based upon the notion that the value of an asset is the present
value of the expected cash flows on that asset, discounted at a rate that reflects the riskiness of those
cash flows. Specify whether the following statements about discounted cash flow valuation are true
or false, assuming that all variables are constant except for the variable discussed (Rubinstein,
2003). As described by Emhjellen and Alaouze (2003), the discounted net cash flow is one of the
most popular tool used for finance valuation.
The assignment will specifically discuss three key areas to DCF; Cost of Equity, ... Show more
The usual method of selling equity in a company is to sell shares of stocks. Selling equity provides
the advantage that dividends will result on profitability. However, there 's huge advantage that
shareholders will expect a continuous return on their investment and if any stock fail it will be sold
off which in return will devaluate the company (Brigham and Ehrhardt, 2009).
Risk Free Rate
The risk free rate is defined as the return on a portfolio or security that has no covariance with the
market. This is a highly used method for estimating the cost of equity capital. To estimate the risk
free rate it's important to consider government default–risk free bonds since government bonds
come in many maturities. The risk free rate reflects three components; the rental rate, inflation, and
maturity risk or investment rate risk which are all economic factors that are found in the yield to
maturity for any given maturity length.
For Henkel AG risk free rate we will use a 10 year bond because it has the least risk. A longer bond
give the company a bigger picture of the future, for example 3 to 6 years are not long enough, on the
other hand 18 years are too long.
We will pick 3.38 because inflation needs time to be more established.
Calculation of Treasury Rate: (4.52 + 4.74) / 2 = 4.63

The above results is made by taking in account the rating of Hankel AG, while its rating A which is
rated

Qrt Floods Essay
The weather of the months leading up to the South–East Queensland floods not only gives an
indication of the weather patterns before the flood, but shows the continuity and change in the
weather, which ended up causing this catastrophic natural disaster. The SE QLD floods was the
result of a continuum of a build–up of conditions, which can be seen in the synoptic charts.
As seen in the Mid September month, there were many high pressure systems of 1025+ hectopascals
affecting australia, in particular the south–west areas of the country. The ridges of the high–pressure
systems impacted the North–east parts of Australia as well, including most of QLD. This caused
clear skies, and dry weather seen in most of QLD, with some areas having their ... Show more
With the dominant cold front impacting the south and south–east area of the state, more prominent
rainfall was found, in which QLD experienced wet and generally warm days in the north, and wet
and cool days in the south east. On the 25th of the month, North Queensland was impacted from the
low pressure system condition, bringing heavy rain, for example most of the Cairns region recorded
more than 200mm during the week. With a trough extending from Northern Territory to QLD also
brought strengthened conditions to this area of the country. This trough is the beginning of an
easterly dip, which are good sources of flood conditions. This weather in November impacted this
area of QLD greatly, meaning as the disaster unfolded, the conditions of SE QLD aided the disaster
to have an even greater impact.
http://www.bom.gov.au/climate/current/month/qld/archive/201110.summary.shtml
The November month was the month leading up to the SE Qld floods. From the synoptic charts, the
conditions evident show the ultimate lead up in conditions for the natural disaster. The pressure
systems have moved southerly, in which QLD is not being significantly impacted by many pressure
systems. A High pressure system in the East of Australia of 1023 hectopascals is lightly impacting
the state, bringing warmer temperatures, in which 76% of the state experience

Management Advisory Services Review
(632) 407–5937/(632) 415–0873 e–mail: support@reviewer–online.com website: www.reviewer–
online.com
THE CPA LICENSURE EXAMINATION SYLLABUS MANAGEMENT ADVISORY SERVICES
(Effective October 2006 Examination)
This subject tests the candidates' knowledge of, and proficiency in the concepts, standards,
techniques, and methodology applicable to management services / consultancy practice by CPAs;
management accounting; financial management–related services; capital budgeting concepts and
techniques; and project feasibility studies. Each examination will contain a minimum of 50 and a
maximum of 70 multiple choice questions, allocated to the different subject areas, as indicated
below.
1.0 Management Accounting–Related Services
1.1 Role, ... Show more content on Helpwriting.net ...
Concept of margin of safety, operating leverage and profit planning b. Responsibility accounting,
transfer pricing, performance evaluation, and balanced scorecard 1. Goal congruence and motivation
2. Types of responsibility centers (revenue, cost, profit and investment); transfer pricing – rationale
and need; alternative transfer pricing schemes and multinational transfer pricing 3. Advanced
analysis and appraisal of performance: financial and nonfinancial performance measures 4.
Performance measurement in multinational companies; distinguishing performance of managers
from performance of organization units; executive performance measures and compensation;
environmental and ethical responsibilities 5. Nature of the balanced scorecard; perspectives of the
balanced scorecard; aligning the balanced scorecard to strategy; features of a good balanced
scorecard; pitfalls when implementing a balanced scorecard 6. Evaluation of the success of strategy;
strategic analysis of operating income c. Functional and activity–based budgeting 1. Definition of
budget 2. Difference between planning and control 3. Functions of budgeting 4. The purposes of the
budget 5. Advantages and limitations of budgets 6. Types of budgets 7. Budgeting terminologies
defined 8. The management process of preparing the master budget
9. The budget period 10. Budget cycle of a manufacturing firm 11. Steps in developing a master
budget 12. Comprehensive budget illustrated 13. Flexible budgeting 14.

Arcadian Microarray
See discussions, stats, and author profiles for this publication at:
https://www.researchgate.net/publication/228180753 Arcadian Microarray Technologies, Inc.
ARTICLE · OCTOBER 2008 READS 516 2 AUTHORS, INCLUDING: Robert F. Bruner
University of Virginia 287 PUBLICATIONS 1,490 CITATIONS SEE PROFILE Available from:
Robert F. Bruner Retrieved on: 25 January 2016 Username: TO ACCESS THIS DOCUMENT
This is a protected document. The first two pages are available for everyone to see, but only faculty
members who have verified faculty status with Darden Business Publishing are able to view this
entire inspection copy. Submit VERIFIED FACULTY If you have verified faculty status with
Darden Business Publishing, ... Show more content on Helpwriting.net ...
Copyright © 2005 by the University of Virginia Darden School Foundation, Charlottesville, VA. All
rights reserved. To order copies, send an e–mail to sales@dardenpublishing.com. No part of this
publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in
any form or by any means–electronic, mechanical, photocopying, recording, or otherwise–without
the permission of the Darden Foundation. ◊ –2– UVA–F–1496 Arcadian Microarray Technologies,
Inc. Following the completion of the Human Genome Project1 in 2003, which sought to map the
entire human DNA sequence2, several companies had developed technologies for researchers to
exploit that mountain of data. Specifically, those new products helped scientists find the links
between the variations in a person's genetic code and their predisposition to disease. It was hoped
that ultimately this would usher in an era when disease diagnosis, treatment, and prevention could
be tailored to an individual's unique genetic identity. Arcadian Microarray Technologies, Inc.,3
headquartered in Arcadia, California, was founded in 2003 by seven research scientists, two of
whom had been major contributors to the Human Genome Project itself. The team had developed a
unique DNA scanning device in the form of a waferlike glass chip that could allow scientists to
analyze thousands of human genes or gene fragments at one time,

Basic Financial Concepts and Pinkerton
Executive Summary. Wathen is attempting to value the proposed acquisition of Pinkerton in an
effort to determine whether bids of $85 million to $100 million is value enhancing for CPP's
shareholders. Additionally, Wathen must choose between two financing options: (1) raising $100
Million via a $75 million debt structure at 11.5% interest rate together with a $25 million equity
investment for a 45% stake in the combined company and (2) a $100 million debt facility at 13.5%
interest rate. General Assumption. We assumed that Wackenhut is comparable to Pinkerton, and
therefore that Wackenhut's asset beta reflects that of Pinkerton. Additionally, we assumed that
Pinkerton's bond rating is A. As such, we assumed a debt service ratio for ... Show more content on
Helpwriting.net ...
With the synergies expected, the value to CPP increases by $14.6 Million (see exhibit 4). Generally
for the particular small firms to maintain rating of A, the firms have to maintain a debt service ratio
of 6. Hence it is practical to assume interest coverage ratio of 6.0x in the long term for Pinkerton in
this case. Pinkerton gets benefit from 34% tax shield, which account for the value of $15.4 Million
(see exhibit 5). Therefore, as calculated in exhibit 6, the total value of Pinkerton from 3 sources to
CPP in expected case is $119.7 Million. This is higher than the $100 million asking price.
Financing: Free cash flow after debt service is still positive in both options. For the value to existing
shareholder, as option 1 CPP gives premium of $15.2 Million over $25 Million for 45% stake of
CPP to investors, option 2 of $100 Million Debt would be more preferable. Pessimistic Case
Valuation: We then perform the valuation exactly the same method as expected case. The value of
Pinkerton with less gross margin and more working capital needed is $67.1 Million (See exhibit 9
for 5 years valuation and exhibit 10 for terminal value). With lower performance, the value of 34%
tax shield is also lower to $10.8 Million (see exhibit 12). Without any additional incremental value
to CPP (exhibit 11), total Pinkerton value from 3 sources is $77.9 Million (exhibit 13), which is
even less than the original proposed value of $85 Million from Wathen. Financing:

Rate Of Return On Equity
Second Proposition: Rate of return on equity:
The second proposition of Modigliani and Miller it states that as the financial risk rise the higher the
shareholders' rate of return.
Financial leverage increases the risk of a shareholder since it increases the variability of the EPS and
the ROE, this behaviour has got two directly proportion effects, Increase in the shareholders' return
however, it also increases the shareholders' financial risk.
As per this effect the shareholders' are expected to increase their return to be able to cover the higher
risk that they are going through.
Unlevered firms who has got no debt; their opportunity cost of capital is equal to their cost of equity
this means that the unlevered firm has got no risk, ... Show more content on Helpwriting.net ...
According to this figure the WACC was not affected by the capital structure, it remained constant
regardless the increase of equity, this means that without including taxes the firm's value is not
affected by the capital structure. (Kaplan Financial Knowledge Bank, 2012)
The Second Proposition with taxes:
As Modigliani and Miller did for the first proposition when they've included the effect of the tax,
they've applied the same thing on the second proposition in 1963 to make their theory closer to
reality.
In this proposition M&M stated that the corporate tax is equal to the current value of savings from
taxes, in this matter we can conclude that debt percentage in the capital structure and the WACC are
inversely proportional, companies would do that because according to the tax shield they pay less
taxes when they've got debt in their capital structure as shown in the Figure 2 below. (Brigham &
Ehrhardt, 2010).
According to (Pan, 2012) firms can benefit from having a higher percentage of debt in their capital
structure because of the tax shield, this will decrease the WACC while the value of the firm will
increase.
Third Proposition: Irrelevance of the Dividend Policy:
Modigliani and Miller in their study that was published in the journal of business "Dividend policy,
Growth and valuation of shares" stated that the dividend policy is not important for the value of the
firm. M&M argued in this proposition that in

Corporate And Industrial Businesses : Business Strategies
Chapter 1. This chapter discusses how shareholders have become more dominant than the
stakeholders in the corporate and industrial businesses. Managers are now focusing on appealing
shareholders because study shows that it creates better business, especially when companies are
going through an unattractive phase regarding shareholders. Chapter 2. Managing value is discussed
throughout the chapter and how it is important in developing business strategies. Three steps which
are vital in managing value are recognizing restricting opportunities, acting on these opportunities,
and establishing a value creation philosophy in the corporation. Managers must develop strategic
plans in order to create value for the business. Chapter 3. Fundamental ... Show more content on
Helpwriting.net ...
This chapter discusses the proof that the market does work by the way theory suggests. The four
categories which is stated in the book regarding the proof include: how changes in value and
valuation levels are linked, how the market not only focuses on short term performance but long
term as well, and the market concentrates on the essential economic results. It is also important to
note mentioned in the chapter that inexperienced consideration to account earnings will cause value
destroying decisions. Therefore, managers need to pay attention on increasing long term free cash
flow in order to be rewarded by greater share prices. Chapter 6. Similar to what I stated in the first
chapter, this chapter talks about how companies are wanting to create value for their shareholders. A
good point made in the chapter is how the managers should think about all the possible ways of how
to create value instead of why it should be created. Companies take various approaches in order to
create value, but although there are many approaches such as metrics not everyone is successful. We
noticed in the chapter when looking at the total returns of shareholders, only one third outperformed
their sector index by more than five percent. Every company will have to choose their route to
creating value all depending on where they want to be in a certain amount of time. Chapter 7.
According to this chapter, likelihoods of success are minimum for acquiring companies in an active
market and

Fin U02A2 Time, Value and Money
TIME VALUE OF MONEY: ANNUITY CASH FLOWS FIN u02a2 Would you rather have a
savings account that paid interest compounded on a monthly basis, or one that compounded interest
on an annual basis? Why? Compound interest arises when interest is added to the principal.
Therefore, the interest that has been added also earns interest. This addition of interest to the
principal is called compounding. If the savings account has $1,000 initial principal and 20% interest
per year, the account will have a balance of $1200 at the end of the first year, $1440 at the end of the
second year. Frequent or monthly compounding increases the future value (Cornett, Adair, &
Nofsinger, 2014, page 109–110). What is an amortization schedule and what are ... Show more
This means that the payments that are made at the end of every period are called ordinary annuity.
This is because ordinary annuity is the usual state of affairs. Under normal circumstances all
annuities are paid at the end of the period. Therefore, when annuity payments are made in advance,
like in house rents, they are called annuity due. The difference in the formula to calculate the two
different types of annuities is very small (Cornett, Adair, & Nofsinger, 2014, page 108). What
is the future value of a $ 500 annuity payment over five years if interest rates are 9 percent?
Recalculate the future value at 8 percent interest, and again at 10 percent interest. FVA5 = $500 x
(1+0.09)5 –1 = $500 x 5.9847 = $2,992.36 0.09 FVA5 = $500 x (1 + 0.08)5 –1 = $500 x 5.8666 =
$2,933.30 0.08 FVA5 = $500 x (1 + 0.10)5 – 1 = $500 x 6.1051 =$3,052.55 0.10 What is the present
value of a $700 annuity payment over four years if interest rates are 10 percent? Recalculate the
present value at 9 percent interest, and again at 11 percent interest. PVA4 = $700 x 1 – __1____ (1 +
0.10)4 = $700 x 3.1698655 = $2,218.91 0.10 PVA4 = $700 x 1 – __1__

Corporate Valuation
Methods of Corporate Valuation Prof. Ian H. Giddy, New York University | What is my company
worth? What are the ratios used by analysts to determine whether a stock is undervalued or
overvalued? How valid is the discounted present value approach? How can one value a company as
a going concern, and how does this change in the context of a potential acquisition, or when the
company faces financial stress? Finding a value for a company is no easy task –– but doing so is an
essential component of effective management. The reason: it's easy to destroy value with ill–judged
acquisitions, investments or financing methods. This article will take readers through the process of
valuing a company, starting with simple financial statements and ... Show more content on
Helpwriting.net ...
Book value is actually somewhat skeptically viewed in this day and age, since most companies have
latitude in valuing their inventory, as well as inflation or deflation of real estate depending on what
tax consequences the company is trying to avoid. However, with financial companies like banks,
consumer loan concerns, brokerages and credit card companies, the book value is extremely
relevant. For instance, in the banking industry, takeovers are often priced based on book value, with
banks or savings & loans being taken over at multiples of between 1.7 to 2.0 times book value.
Another use of shareholder's equity is to determine return on equity , or ROE. Return on equity is a
measure of how much in earnings a company generates in four quarters compared to its
shareholder's equity. It is measured as a percentage. For instance, if XYZ Corp. made a million
dollars in the past year and has a shareholder's equity of ten million, then the ROE is 10%. Some use
ROE as a screen to find companies that can generate large profits with little in the way of capital
investment. Coca Cola, for instance, does not require constant spending to upgrade equipment ––
the syrup–making process does not regularly move ahead by technological leaps and bounds. In
fact, high ROE companies are so attractive to some investors that they will take the ROE and
average it with the expected earnings growth in order to figure out a fair multiple. This is why a

The Basic Concepts Upon Which Financial Accounting is...
The Basic Concepts Upon Which Financial Accounting is Based Terms of Reference To prepare a
short report, which will explain the basic concepts upon which financial, accounting is based. The
need for accounting standards and why companies must comply with them. The Need for
Accounting Standards In order for the Profit and Loss and Balance Sheets accounts to make sense to
users who rely on them for their decision making purposes, there has to be consistency in the way
items are treated in the financial statements. Without this agreement it would be impossible to use
them to compare business performance. Limited companies have a statutory duty to comply with
these rules and it is the job of ... Show more content on Helpwriting.net ...
What are accounting standards? Accounting standards are authoritative statements of how particular
types of transaction and other events should be reflected in financial statements. Accordingly,
compliance with accounting standards will normally be necessary for financial statements to give a
true and fair view. Accounting standards issued by the Accounting Standards Board are designated
"Financial Reporting Standards" (or FRSs). Those issued by its predecessor bodies, and adopted by
the Board when it was created in 1990, are designated "Statements of Standard Accounting Practice"
(or SSAPs). Adoption by the Board gave the SSAPs the status of "accounting standards" within the
terms of Part VII of the Companies Act 1985. The Board reviews these SSAPs individually as
appropriate opportunities arise during the course of its work: so far, of the 22 SSAPs adopted in
1990, four have been withdrawn and superseded by FRSs. For example the statement that talk about
the disclosure of accounting policies is now called FRS 18. Five more are in the process of
withdrawal. Are accounting standards mandatory? Company's legislation does not directly require
compliance with accounting standards. However, the Companies Act 1985 requires accounts (other
than those prepared by small or medium–sized companies) to

Entry Into A Foreign Market Demands That Business Leaders...
Entry into a foreign market demands that business leaders carefully weigh the most effective
strategy. The most important choice an organization would need to make prior to entering a new
market, is determine if their mode of entry should involve an equity stake or not (Evans, 2005). This
paper will present two theoretical business scenarios that would be best served by either a non–
equity entry or an equity based entry.
Non–Equity Based Market Entry Peng (2014) provides the example of exporting goods as a non–
equity entry into a foreign market. Exporting provides an ideal means for a small business to
insulate itself from fluctuations in the local economy, and expand its customer base (Mules, 2014).
An ideal example of an organization which could potentially reap the benefits of exportation would
be a local food manufacture (Del Piano, 2015). A hypothetical exporter could be an Atlanta–based
company which produces peach salsa using locally grown ingredients. Peng (2014) notes that the
direct–export model provides numerous benefits for the business. First, exporting opens
opportunities for economies of scale to increase. Mules (2014) states that by increasing the number
of products produced, the cost of producing an individual item decreases. In other words, as the
business increases production to meet the demand of a larger client–base, their cost per item
decreases. Exporting provides a rapid increase in the economy of scale of the organization's
operations (Peng,

financial accounting
21. Generally accepted accounting principles c. derive their credibility and authority from general
recognition and acceptance by the accounting profession. 22. A soundly developed conceptual
framework of concepts and objectives should d. all of these. 23. Which of the following (a–c) are
not true concerning a conceptual framework in account–ing? c. It should be based on fundamental
truths that are derived from the laws of nature. S24. Which of the following is not a benefit
associated with the FASB Conceptual Framework Project? d. Business entities will need far less
assistance from accountants because the financial reporting process will be quite easy to apply. 25.
In the conceptual framework for financial ... Show more content on Helpwriting.net ...
all of these. 47. In classifying the elements of financial statements, the primary distinction between
revenues and gains is c. the nature of the activities that gave rise to the transactions involved. 48. A
decrease in net assets arising from peripheral or incidental transactions is called a(n) c. loss. 49. One
of the elements of financial statements is comprehensive income. As described in Statement of
Financial Accounting Concepts No. 6, "Elements of Financial Statements," comprehensive income
is equal to d. none of these. 50. Which of the following elements of financial statements is not a
component of compre–hensive income? b. Distributions to owners P51. Which of the following is
false with regard to the element "comprehensive income"? d. It excludes prior period adjustments
(transactions that relate to previous periods, such as corrections of errors). S52. According to the
FASB conceptual framework, earnings b. exclude certain gains and losses that are included in
comprehensive income. S53. According to the FASB Conceptual Framework, the elementsassets,
liabilities, and equitydescribe amounts of resources and claims to resources at/during a a. Yes No
S54. Which of the following basic accounting assumptions is threatened by the existence of severe
inflation in the economy? a. Monetary unit assumption. S55. During the lifetime of an entity
accountants

Real Estate Cheat Sheet
Cost Approach Formula: Cs – Ds + Vsl = V Value: An object, product or service that: has utility or
usefulness, Is scarce, Is desired by people (is in demand),Is transferable from one person to
anotherLand Appraisal Methods: Market or Direct Sales Comparison, Allocation, Abstraction,
Development, Land Residual Which Method to Use? 1)Market Method is considered most reliable,
but not practical if lot sales are not occurring in a neighborhood.(2)Allocation Method is quick and
easy, but only reliable if based on ample, recent data.(3)Abstraction Method is the one you will use
most often.(4)Development Method is a special case...appropriate for unimproved land.(5)Land
Residual Method uses Income Method, leads to circular reasoning. ... Show more content on
Helpwriting.net ...
The Cap rate is simply the property operating earnings divided by the property asset or value.
Reconciliation, Defined The process of reducing a range of value indications into an appropriate
conclusion for that analysis. Having applied different valuation methods, the appraiser makes a
determination of the single best supportable estimate of value. It is NOT an average of the valuation
methods, nor a narrowing of the values derived from each method (unless errors are detected).
Approach Relevance: Owner Occupied => Downplay Income Approach. Unique Property =>
Downplay Cost Approach. Income Properties => Downplay Cost Approach (unless buildings are
new) Zipf's Law: City Population = Largest City's Population ÷ Rank. City Pattern: Generally, cities
of similar size are not located near each other. Factors Underlying City Patterns, Economies of Scale
– Cheaper to produce goods in large volume, Economies of Agglomeration – Cost advantages to
colocating production factors, Positive Locational Externalities – "piggyback" benefits, Factors that
make centralization less productive or more costly:, Congestion, Pollution, Crime, Transportation
costs CPT: Central Place Theory: To reduce spatial friction, places of similar size, rank or function
will tend to be evenly spaced across a featureless plain. City–Economy Concepts: Economic Base:
(1) Local production for local consumption and export, (2) Investment returns, (3) Government
transfers. Export Base

Airthreads Essay
The Valuation of AirThread Connections We can use a combination of APV and WACC approach to
value AirThread Connections – using APV for 2008–2012, and using WACC to estimate the
terminal value. Use APV approach to value cash flows from 2008 to 2012 America Cable Company
(ACC) should use APV approach to value cash flows from 2008 to 2012. This is because ACC uses
classis LBO approach for acquisition where it purchases the target with significant amount of debt,
and then in the long run paid the debt to bring down the leverage to industry norms. The goal is to
use a tax efficient route and maximize the present value of tax shields, and minimize the amount of
up–front equity invested in the deal. Use WACC approach beyond 2008 to ... Show more content on
Helpwriting.net ...
Rev. 154.36x 154.36x 154.36x 154.36x 154.36x Total Sales Equip. Rev. 101 134.98 153.85 173.10
190.42 203.76 Prepaid Expenses 1.38% 1.38% 1.38% 1.38% 1.38% Total Prepaid Expenses 41.6
46.92 53.48 60.17 66.19 70.82 Accounts Payable 35.54x 35.54x 35.54x 35.54x 35.54x Total
Accounts Payable 260.8 335.42 382.38 430.18 473.20 506.33 Deferred Serv.

Advanced Managerial Finance
Question:
1. Locate the annual balance sheets for General Motors (GM), Merk (MRK), and Kellogg (K). For
each company calculate the long term debt–equity ratio for the prior two years. Why would these
companies use such different capitals structures?
2. Look up a company and download the annual income statements. For the most recent year,
calculate the average tax rate and EBIT, and find the total interest expense. From the annual balance
sheets calculate the total long–term debts (including the portion due within one year). Using the
interest expense and total long term debts, calculate the average cost of debt. Next, find the
estimated beta for the company on the S&P Stock Report. Use this reported beta, a current T–bill
rate, ... Show more content on Helpwriting.net ...
b) Size of the company The size of the company will affect the capital structure of company. This is
because large companies are generally lower business risk compare to small companies. Thus, large
companies can raise the debt capital easily. In this case, the Kellogg is expanding their business and
size of company is getting bigger, so they tend to use more debt than other companies.
c) Business risk If the company is more risky in the industry, the debt–equity ratio will generally
low because the company is difficult to raise debt capital due to the high risk. In this case, General
Motor and Merck have low debt–equity ratio due to the high business risk such as technology,
customer demands, and competitors and so on.
d) Tax Exposure Tax rate of the company will influence in making capital structure decisions. The
debt payments to the debtors are tax deductible. This would be the advantage for the company
which has high tax rate. So, if the company has the high tax rate, they will tend to use debt capital
structure to decrease their tax amount.
e) Flexibility Flexibility means the ability of company to raise its capital structure to the needs of
the different conditions nowadays. Company will more flexible when they have low debt–equity
ratio. Due to the initial debt of the company is low, so the company most probably has the ability in
paying back the debts. Thus, they will raise funds easily. In this case, General Motor and

American Home Products Case Essay
American Home Products Case Write–Up
1.
A combination of business risk and financial risk shows the risk of an organization's future return on
equity. Business risk is related to make a firm's operation without any debt whereas financial risk
requires that the firm's common stockholders make a decision to finance it with debt. Business risk
can be evaluated volatility in earnings and profits (coefficient of variation of returns on assets and of
operating profits). A measure of business risk is also asset beta or unlevered beta. In case of AHP, it
is 1.2 (βa) which is very low signifying low business risk for the firm.
AHP's business risk is low mainly because: 1. It has been operating on four main lines of business
that bear ... Show more content on Helpwriting.net ...
All this combined with dividend growth of 222% between 1972 – 1981, contributed to the firm's
AAA bond rating and to the popularity of AHP's stock among retail and, primarily, institutional
investors.It has been financing growth internally while paying out 60% of annual earning as
dividends.
Exhibit 2 Current capital structure | Total debt | 13.9 | Total debt/total capital | 0.90% | Interest
coverage ratio | 436.6x | Firm Value | 4447 million | Stock price | $30 |
In general, the lower the company's reliance on debt for asset formation, the less risky the company
is since excessive debt can lead to a very heavy interest and principal repayment burden. This is
demonstrated through statistics such as high financial risk, low interest coverage ratios, and high
debt ratios. However, when a company chooses to forgo debt and rely largely on equity, as in the
case of AHP, the company does so at the expense of a tax reduction effect supplied by interest
payments. Thus, a company has to consider both risk and tax issues when deciding on an optimal
debt ratio.
3.
In order to figure out the potential

Interlations And The Impacts Of Wind And Ocean Interactions
2.1 Wind and ocean interactions
When wind is experienced it mainly impacts the surface waters in the ocean, these waters are
subject to movement. Due to the effects of the Coriolis force air movement is deflected to the left in
the southern hemisphere. A phenomenon known as the Ekman spiral is initiated once water at the
surface begins to move. This surface movement initiates the bottom water layers to move as well to
the left of the force that is driving it. In addition, the Ekman spiral movement begins to weaken at
deeper water depths. The Ekman spiral force is directed downwards where it operates at right angles
to the wind, where in the southern hemisphere it operates to the left. Evidently the physical
atmospheric environment, the wind, interacts with the ocean altering ocean current speed and the
way in which water in its various depths are mixed together (Wanninkhof, 1992).
2.2 Circulation of the thermohaline
In addition to circulation driven by the wind in oceans there is circulation that exists due to
convection. These convection differences exist as a result of alterations in water density which
differs according to temperature and salinity adjustments present at the surface of the ocean.
Downward convection, the movement of heat energy, is administered by the size of what is known
as the thermocline which is commonly referred to as a temperature gradient. This temperature
gradient can be seen in figures 1.1 and 1.2 and it distinguishes warmer surface water from

Crocs Case Study Essay
CASE: Crocs, Inc. 1. Which comparable company is a useful peer for valuation purposes as of the
case date? Will it continue to be a good match into the future? Lululemon is a useful peer for
valuation purposes as of the case date. There are three main factors to determine a useful peer. First
one is comparable growth. Fiscal year 2006 sales growth of Crocs had been %227 and growth of
over %130 was likely for fiscal year 2007. On the other side, compound annual growth rate of sales
of Lululemon is over %100 (Exhibit 4). Second main factor is risk. Since that Crocs and Lululemon
are new highgrowth brands, they have comparable risks. Last one is profit margin. Crocs has high
margins on its products as a result of economies of scale. ... Show more content on Helpwriting.net
...
Prepare a succinct sensitivity analysis using profit margin as the key driver and revisit your "true"
value argument. I assume that COGS/Sales rate will be 5% higher than the original assumption.
After this assumption I calculate value of equity per share ($47.60) as following. In other words, 5%
increase in COGS/Sales results 26.84% decrease in the value of equity per share. Assumptions 2009
2010 2011 39.0% 28.0% 17.0% 48.0% 49.0% 50.0%
Growth % COGS/Sales %
2006 227% 43.5%
2007 134% 41.2%
2008 50.0% 48.0%
2012 6.0% 50.0%
PERIOD YEAR EBIT after tax (EBIAT) + Depreciation =Cash Flow from Operations (CFFO) +/–
Change in Net Working Capital +/– Capital Expenditures =Free Cash Flow (FCF) +Terminal Value
(TV) =Sum of FCF + TV Present Value – Market Value of Debt = Valuation of Equity / Number of
Shares Value of Equity per Share
2007
1 2008
2 2009 329.27 30.87 360.14

3 2010 407.12 41.83 448.95
4 2011 468.03 50.51 518.53
5 Steady 549.64 549.64
0 227.91 0 21.37 0

Proposed Acquisition of Southern Comfort
1.Executive Summary The case study has been approached from different valuation methods to
ascertain if there is value in the acquisition of Southern Comfort. These methods all yield the same
result, i.e. Southern Comfort is expensive at the asking price of $94.6million. The valuation
methods also examined the reasonableness of the acquisition using methods such as Free Cashflow
Analysis, Book Value methods and Price Earnings ratios analysis The qualitative aspects have also
been analysed to find out if there is value from a qualitative perspective. Methods such as SWOT
analysis have been utilized to check if there would be a 'perfect fit'. A perfect fit is basically an
analysis that the acquisition will bring synergy between the two ... Show more content on
Helpwriting.net ...
The acquisition of SC has also the potential to add on unique liquor which is mixed by a secret
formula and has exclusive rights which (see Appendix?) have a huge synergic benefit to the present
BF product mix–line offerings and brand equity. Besides, SC has strengthened channels of foreign
distribution and tremendous brand growth in 1977 compared with competitor brands in the same
product line. Because SC is not aggressively marketed and that it is wrongly positioned market,
because they think it is a whiskey. If acquired, SC could bring in the foreign penetration capabilities
and know–how to BF. If aggressively marketed and repositioned SC could add a lot of vale to BF
too. SC also has a well reputable brand offering and the management is well run and efficient, equal
to that of BF thus the acquisition of SC would fit well in BF style of management philosophy. SC
also has modern equipment which is an asset that could strengthen the asset base of BF and could be
used in the continued production of SC without replenishing the asset in the foreseeable future
and/or tries to adopt the production of SC to BF product line systems and standards. Thus the
operational strategic competitive position of BF could be enhanced. That could also improve agility
or obtain resources that are vital to future prosperity of the SC in particular and BF in general. The
two firms resemble each other in

Weighted Average Cost of Capital and Yeats
Extra Credit Assignment:
Yeats Valves and Controls Inc.
Completed as a Group with the Following Individuals: (in alphabetical order by last name)
Adetunji Adeniyi Tung F. Cheng Gregory Chiu Rashmin Patel WenHao Zhang
Course Title: Accounting and Finance Course No./Section: MG6093 Instructor: Frank X. Apicella
November 28, 2012
Yeats Valves Question
The following are questions which should focus the groups on important aspects of the Yeats Valves
case. Note the actual case name is Yeats Valves and Controls, Inc. The case number is UV0094.
There is also a spreadsheet – that number is UV0184.
As mentioned – the corresponding case is TSE ... Show more content on Helpwriting.net ...
It is the minimum return a company needs to earn in order to satisfy its investor base (as weighted
for the amount of debt vs. equity in the target/capital structure), which is what the company must
pay investors to raise new financing to support new projects or ventures. WACC is particularly
useful here because Yeats has no debt, thus, it is an equity financed company. In the case of Yeats,
the company must have capital to continue to develop and market its new Widening Gyre Program.
The formula for WACC = Re (E/V) + Rd (D/V)(1–t)
However, because Yeats does not have debt, the second half of this formula, Rd(D/V)(1–t) is not
necessary. Being that Yeats has zero debt, the value of its equity is in full, which represents its
Enterprise Value. Tax (t) is determined in the case as 40% or .40 (p. 5).
We must then calculate the CAPM for the cost of equity (see Excel sheet for details):
Re = Rf + Beta (Rm–Rf)
Re = Required Return on Equity
Rf = Risk Free Rate = 5.98 (p. 16)
Beta = Measure of Risk relative to the general market (volatility) = 1.5 (p. 5)
Rm–Rf = Equity Market Risk Premium (EMRP) = 5.5 (p. 16)

Rm = Market Risk
Rf = Risk Free Assets (U.S. treasury security)
With Beta at 1, the stock price changes in precise tandem with the market, but with Yeat's beta at
1.5, it is more risky than a group of peer stocks.
Thus,
Re = Rf + Beta (Rm–Rf)
Re = 5.98 + 1.5 x 5.5
Re = 14.23%, the cost of equity at for Yeats
Then calculate
WACC = Re

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