Recommend 1 approach to retain pilots at Southwest Airlines and Consider methods for retaining employees, meeting pilot needs, and cost.

This internship is turning into a great hands-on learning opportunity for you. Your manager has tasked you with proposing a talent management plan for pilots at Southwest Airlines. Your proposal will be considered by the Director of HR to make a formal plan.

Develop a 3- to 4-page proposal that include the following:

  • A recommendation of 3 recruitment sources that are best suited to recruit pilots. Consider the quantity of resumes generated, the percentage of resumes likely to result in accepted offers, the time to fill a position, and the cost to fill a position.
  • An evaluation of common methods used to select a candidate
  • Recommend 3 methods for selecting new pilots.In your evaluation, consider reliability, validity, utility, and legality.
  • An evaluation of common methods used to train and develop employees
  • Recommend 3 methods for training pilots at Southwest Airlines. Consider learning and development outcomes, cost of training and development, effectiveness of training and development, and risks.
  • An evaluation of common performance management systems
  • Recommend 1 method for performance management of pilots at Southwest Airlines. Consider strategic congruence, validity,reliability, acceptability, and specificity.
  • An evaluation of common methods to minimize voluntary turnover
  • Recommend 1 approach to retain pilots at Southwest Airlines. Consider methods for retaining employees, meeting pilot needs, and cost.

Recommend 3 methods for training pilots at Southwest Airlines.

This internship is turning into a great hands-on learning opportunity for you. Your manager has tasked you with proposing a talent management plan for pilots at Southwest Airlines. Your proposal will be considered by the Director of HR to make a formal plan.

Develop a 3- to 4-page proposal that include the following:

  • A recommendation of 3 recruitment sources that are best suited to recruit pilots. Consider the quantity of resumes generated, the percentage of resumes likely to result in accepted offers, the time to fill a position, and the cost to fill a position.
  • An evaluation of common methods used to select a candidate
  • Recommend 3 methods for selecting new pilots.In your evaluation, consider reliability, validity, utility, and legality.
  • An evaluation of common methods used to train and develop employees
  • Recommend 3 methods for training pilots at Southwest Airlines. Consider learning and development outcomes, cost of training and development, effectiveness of training and development, and risks.
  • An evaluation of common performance management systems
  • Recommend 1 method for performance management of pilots at Southwest Airlines. Consider strategic congruence, validity,reliability, acceptability, and specificity.
  • An evaluation of common methods to minimize voluntary turnover
  • Recommend 1 approach to retain pilots at Southwest Airlines. Consider methods for retaining employees, meeting pilot needs, and cost.

Do you think finance departments are the best place to train future CEOs?

The Role of the Financial Manager
Assignment Overview
Due to the increasingly complex nature of corporate finance, more and more corporations are tapping their chief financial officer to become their chief executive officer. The CFO brings substantial financial expertise to the position of CEO. However, there may be other reasons why the CFO is not necessarily the best person to become the CEO.
Please note that the CFO must have an external orientation: After all, the company is owned by its shareholders and if the company is to operate so as to raise the value of the shares it must consider not only the internal structure of the organization, its products, competitors etc., but it must consider the interaction between what the company ‘does’, and the way the ‘market’ evaluates its performance. It is the combination of the two that plays a role in affecting the market price of the shares and shareholders value. The individuals who must have an eye on this are usually the CEO and the CFO.
Please read the articles below, which are both available in Proquest. You need to be logged onto Proquest in order to access the links. If the links don’t work you can look up the articles in Proquest using “publication search”.
How a CFO can graduate to CEO
Corporate Finance; London; Jun 1999; Janine Brewis
Abstract:
Positions of power within corporates are highly sought after, and today’s chief financial officers and finance directors are increasingly becoming aware that they now have a realistic opportunity of becoming CEO. Part of the reason for the trend towards recruiting CFOs who can behave as strategic partners is that the investor community looks much more critically at the business performance and management strengths and weaknesses of corporates. This strategic positioning gives them an opportunity to buff up their image, and make themselves seen as a more credible candidate to take over the CEO role.
Do CFOs Really Make Good CEOs
Institutional Investor; New York; Aug 1989; Picker, Ida
Abstract:
With the proliferation of corporate takeovers, leveraged buyouts, and restructuring in the US, it would seem that chief financial officers (CFO) hold the keys to executive wisdom. Recruiters report a growing trend of grooming CFOs for chief executive officer (CEO) positions, with some estimating that nearly 25% of top corporate leaders are former CFOs. Analysts, academics, and headhunters agree that the ideal CEO communicates well, is adept at managing managers, understands the company’s product and operations, and provides a consistent vision. A recent survey by Management Practices Quarterly reveals that, of 83 new CEOs appointed in 1988, more than 18% came from operations-production backgrounds, some 23% had technical training, while only 14.4% had a financial background. D. Wayne Calloway, who became CEO of PepsiCo in May 1986, was formerly the company’s CFO and is probably the best example of the valuable experience CFOs can bring to the CEO position.
Assignment Expectations
Read the two articles above, look for newer articles on the subject by browsing the web and then write a two-page paper answering the following question:
Do you think finance departments are the best place to train future CEOs? Provide two actual examples of CFOs of publicly-traded companies who became CEOs of publicly-traded companies within the past 5 years. Do these individuals have the CPA and/or CFA designations?
Include a discussion of both the pros and cons of hiring a CFO to be CEO. Try to cite at least three articles in your paper in support of your arguments in favor of and against hiring a CFO to be a CEO. Remember to include a reference list and to refer to the articles you use in the body of your paper.

What realistic alternatives are available to Farah for making payment?

What realistic alternatives are available to Farah for making payment?

Farah Jeans of San Antonio, Texas, is completing a new assembly plant near Guatemala City. A final construction payment of Q8,400,000 is due in six months. (“Q” is the symbol for Guatemalan quetzals.) Farah uses 20 precent per annum as its weighted average cost of capital. Today’s foreign exchange and interest rate quotations are as follows:

Construction payment due in six months (A/P, qutezals) 8,400,000
Present spot rate (quetzals/$) 7.0000
Six-month forward rate (quetzals/$) 7.1000
Guatemalan quetzal six-month interest rate (per annum) 14.000%
U.S. dollar six-month interest rate (per annum) 6.000%
Farah’s weighted average cost of capital (WACC) 20.000%

Farah’s treasury manager, concerned about the Guatemalan economy, wonders if Farah should be hedging its foreign exchange risk. The manager’s own forecast is as follows:

Highest expected rate 8.0000
Expected rate 7.3000
Lowest expected rate 6.4000

What realistic alternatives are available to Farah for making payment? Which method would you select? Give reasons for your answer. (5.2)

Calculating the Free Cash Flow Valuation for 2011-2015

Apple Inc. Financial Analysis (Sp2014)
Your report should include Financial Statement Info from the last 3 years. Go to http://finance.yahoo.com/ and type in Apple company name or (AAPL) ticker symbol. Enter. If you scroll down the left hand menu to the bottom, you will see the Financials section. Yahoo provides the last 3 years worth of financial statement data from the balance sheet and income statement, so this will make it easy on getting the data. You can then cut and paste the data into an excel spreadsheet from which you may set up your ratio calculations. You may need to use one of the “paste special” options to get it to work best.
Write a report on a company using the financial ratios Listed below. You should compare the last 3 years of financial statements. Use only year-end numbers to do the comparison (fiscal or calendar year end depending on the company).
Ratios- Return on Assets, Return on Equity, Return on Capital, Inventory Turnover Ratio, Debt to Equity Ratio, Operating profit margin, Interest coverage ratio, P/E Ratio, Asset Turnover Ratio, Market to Book Value, Operating profit margin, Quick Ratio, & Current Ratio.

The report should be approx. 3 to 4 pages, but if you find more material that you wish to include, then you are free to do so. The report will be graded on the accuracy and applicability of what you include, not on the quantity or volume of the report.

The report should start with a complete, but brief description of the company and the business that they are in. It should include an overview of the industry, competition, and challenges if any as well as competitive advantages.

It would be preferable if the company you choose has debt and pays dividends. From the debt you can calculate the debt ratios including the liquidity ratios, and from the dividends you can calculate the Dividend Discount model to estimate the company’s value. You could also calculate k, your required rate of return, g, your growth rate, and b, the retained earnings plowback rate.

Calculating the Free Cash Flow Valuation for 2011-2015

Lastly, you should summarize the report and add your own conclusions including whether or not you would like to invest in it.

What is the initial outlay?What are the benefits over time?

In November 2000, Francesca Cerini, managing director of Fonderia di Torino S.p.A., was considering the purchase of a Vulcan Mold-Maker automated molding machine. This machine would prepare the sand molds into which molten iron was poured to obtain iron castings. The Vulcan Mold-Maker would replace an older machine and would offer improvements in quality and some additional capacity for expansion. Similar molding-machine proposals had been rejected by the board of directors for economic reasons on three previous occasions, most recently in 1999. This time, given the size of the proposed expenditure of about (euros) €1 million, Cerini was seeking a careful estimate of the project’s costs and benefits and, ultimately, a recommendation of whether to proceed with the investment.

The Company

Fonderia di Torino specialized in the production of precision metal castings for use in automotive, aerospace, and construction equipment. The company had acquired a reputation for quality products, particularly for safety parts (i.e., parts whose failure would result in loss of control for the operator). Its products included crankshafts, transmissions, brake calipers, axles, wheels, and various steering-assembly parts. Customers were original-equipment manufacturers (OEM), mainly in Europe. OEMs were becoming increasingly insistent about product quality, and Fonderia di Torino’s response had reduced the rejection rate of its castings by the OEMs to 70 parts per million.

This record had won the company coveted quality awards from BMW, Ferrari, and Peugeot, and had resulted in strategic alliances with those firms: Fonderia di Torino and the OEMs exchanged technical personnel and design tasks; in addition, the OEMs shared confidential market-demand information with Fonderia di Torino, which increased the precision of the latter’s production scheduling. In certain instances, the OEMs had provided cheap loans to Fonderia di Torino to support capital expansion. Finally, the company received relatively long-term supply contracts from the OEMs and had a preferential position for bidding on new contracts.

Fonderia di Torino, located in Milan, Italy, had been founded in 1912 by Francesca Cerini’s great-grandfather, Benito Cerini, a naval engineer, to produce castings for the armaments industry. In the 1920s and 1930s, the company expanded its customer base into the automotive industry. Although the company barely avoided financial collapse in the late 1940s, Benito Cerini predicted a postwar demand for precision metal casting and positioned the company to meet it. From that time, Fonderia di Torino grew slowly but steadily; its sales for calendar-year 2000 were expected to be €280 million. It was listed for trading on the Milan stock exchange in 1991, but the Cerini family owned 55% of the common shares of stock outstanding. (The company’s beta was 1.25. )

The company’s traditional hurdle rate of return on capital deployed was 14%. (This rate had not been reviewed since 1984.) In addition, company policy sought payback of an entire investment within five years. At the time of the case, the market value of the company’s capital was 33% debt and 67% equity. The debt consisted entirely of loans from Banco Nazionale di Milano bearing an interest rate of 6.8%. The company’s effective tax rate was about 43%, which reflected the combination of national and local corporate income-tax rates.

Francesca Cerini, age 57, had assumed executive responsibility for the company 20 years earlier, upon the death of her father. She held a doctorate in metallurgy and was the matriarch of an extended family. Only a son and a niece worked at Fonderia di Torino, however. Over the years, the Cerini family had sought to earn a rate of return on its equity investment of about 18%—this goal had been established by Benito Cerini and had never once been questioned by management.

The Vulcan Mold-Maker Machine

Sand molds used to make castings were prepared in a semi-automated process at Fonderia di Torino in 2000. Workers stamped impressions in a mixture of sand and adhesive under heat and high pressure. The process was relatively labor intensive, required training and retraining to obtain consistency in mold quality, and demanded some heavy lifting from workers. Indeed, medical claims for back injuries in the molding shop had doubled since 1998 as the mix of Fonderia di Torino’s casting products shifted toward heavy items. (Items averaged 25 kilograms in 2000.)

The new molding machine would replace six semi-automated stamping machines that, together, had originally cost €415,807. Cumulative depreciation of €130,682 had already been charged against the original cost; annual depreciation on those machines had been averaging €47,520 a year. Fonderia di Torino’s management believed that those semi-automated machines would need to be replaced after six years. Cerini had received an offer of €130,000 for the six machines.

The current six machines required 12 workers per shift (24 in total) at €7.33 per worker per hour, plus the equivalent of 3 maintenance workers, each of whom was paid €7.85 an hour, plus maintenance supplies of €4,000 a year. Cerini assumed that the semi-automated machines, if kept, would continue to consume electrical power at the rate of €12,300 a year.

The Vulcan Mold-Maker molding machine was produced by a company in Allentown, Pennsylvania. Fonderia di Torino had received a firm offering price of €850,000 from the Allentown firm. The estimate for modifications to the plant, including wiring for the machine’s power supply, was €155,000. Allowing for shipping, installation, and testing, the total cost of the Vulcan Mold-Maker machine was expected to be €1.01 million, all of which would be capitalized and depreciated for tax purposes over eight years. (Cerini assumed that, at a high and steady rate of machine utilization, the Vulcan Mold-Maker would need to be replaced after the eighth year.)

The new machine would require two skilled operators (one per shift), each receiving €11.36 an hour (including benefits), and contract maintenance of €59,500 a year, and would incur power costs of €26,850 yearly. In addition, the automatic machine was expected to save at least €5,200 yearly through improved labor efficiency in other areas of the foundry.

With the current machines, more than 30% of the foundry’s floor space was needed for the wide galleries the machines required; raw materials and in-process inventories had to be staged near each machine in order to smooth the workflow. With the automated machine, almost half of that space would be freed for other purposes (although at present there was no need for new space).

Certain aspects of the Vulcan Mold-Maker purchase decision were difficult to quantify. First, Cerini was unsure whether the tough collective-bargaining agreement her company had with the employees’ union would allow her to lay off the 24 operators of the semi-automated machines. Reassigning the workers to other jobs might be easier, but the only positions needing to be filled were those of janitors, who were paid €4.13 an hour. The extent of any labor savings would depend on negotiations with the union. Second, Cerini believed that the Vulcan Mold-Maker would result in even higher levels of product quality and lower scrap rates than the company was now boasting. In light of the ever-increasing competition, this outcome might prove to be of enormous, but currently unquantifiable, competitive importance. Finally, the Vulcan Mold-Maker had a theoretical maximum capacity that was 30% higher than that of the six semi-automated machines; but those machines were operating at only 90% of capacity, and Cerini was unsure when added capacity would be needed. The latest economic news suggested that the economies of Europe were headed for a slowdown.

Case 57 Fonderia di Torino S.P. A. (Attached)
For this case, you have two choices to write your report:Either replicate the model Using MSFT to demonstrate the optimal capitalstructure trade-off theory (more quantitative analysis), or follow HowKimberly-Clark Uses Real Options (somewhat quantitative analysis, but moreconcentrated on the qualitative analysis).
You should try to answer the following questions:
1. Please assess the economicbenefits of acquiring the Vulcan Mold-Maker machine. What is the initial outlay?What are the benefits over time? What is an appropriate discount rate? Does thenet present value (NPV) warrant the investment in the machine?
. 2. What uncertainties or qualitativeconsiderations might influence your recommendation? How, if at all, would aninflation rate of 3% (or higher) affect the attractiveness of the VulcanMold-Maker? Please estimate the impact on NPV from a change in any of thoseelements.
3. ShouldFrancesca Cerini proceed with the project?
Tocompletely answer the above questions, you should also consider the followingquestions (you need not to directly answer these questions). If you can answerthe following questions, answers to the above required can be easily identified.
1. What is the basic nature of the problem inthis case?
2. What are the cash flows associated with theVulcan Mold-Maker?
3. What are the cash flows associated with thesemiautomated machines?
4. What discount rate did you use? What DCF didyou get?
5. Are you uncertain about any of the assumptions? What does a sensitivityanalysis of those assumptions reveal?
6. Are there qualitative issues that we shouldaddress but which are not reflected in the DCF analysis?
7. What should Francesca Cerinirecommend to her board of directors?

 How many years will it take to triple your money at 17% compounded monthly?

Question 1
1. How many years will it take to triple your money at 17% compounded monthly?
Enter your answer rounded off to TWO decimal points. Do not enter “years” in the answer box.

1 points
Question 2
1. Suppose you invest $19,792. If the interest rate is 7% compounded quarterly for the first 10 years and 14% compounded monthly for the next 5 years, what is the future value after 15 years?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 3
1. A project has the following cash flows. What is the internal rate of return?
Year 0 1 2 3
Cash flow -$121,000 68,150 $42,200 $39,100

13.47%

14.39%

13.85%

14.82%

12.71%
1 points
Question 4
1. The present value of a 10-year annuity is $181,566. If the interest rate is 11% and payments are made at the end of each period, what is the amount of each payment?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 5
1. Debbie wants to have $19,640 in her bank account 5 years from now. The account will pay 1.2% interest per month. How much money does she need to put in her bank account at the end of each month to achieve this goal?
Enter your answer rounded off to two decimal points. Do not enter % or $ in the answer box.

1 points
Question 6
1. If you receive $825 at the end of each year for the first two years and $628 at the end of each year for the next two years.
Assume interest rate is 5%. What is the value at the end of the 4th year? That is. solve for FV at the end of the 4th year.

Note: Enter your answer rounded off to two decimal points. Do not enter $ in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points
Question 7
1. ABC, Inc. has a total asset turnover of 2.7 and a net profit margin of 5.5%. The firm has a return on equity of 23.6%. Calculate Marshall’s debt ratio.
Enter your answer as a percentage rounded off to two decimal points. Do not enter % in the answer box. For example, if you get 0.1234567, then enter as 12.35 in the answer box.

1 points
Question 8
1. ABC Company has net working capital of $2,964, current assets of $3,273, long-term debt of $1,111, and equity of $5,320. What is the amount of net fixed assets?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box

1 points

Question 9
1. ABC Company has $439,077 of operating income after all costs but before $59,298 of interest income, $51,157 of dividend income, and taxes. What is the tax expense?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 10
1. What is the net present value of the following cash flows? Assume an interest rate of 8%
Year CF
0 -$12,583
1 $7,045
2 $6,092
3 $6,785
2. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answers box.
3.
1 points
Question 11
1. ABC’s current assets comprise of cash, accounts receivables, and inventory. ABC has $13,956 in cash, $7,508 in accounts receivables, and $7,019 in inventory. If the current ratio is 2.7 times, compute the quick ratio.
Note: Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

1 points
Question 12
1. ABC Company has a debt ratio of 0.73. What is the debt-equity (D/E) ratio?
Note: Enter your answer rounded off to two decimal points. For example, if your answer is 0.123456789 then enter as 0.12 in the answer box.

1 points
Question 13
1. ABC Company offers a perpetuity which pays annual payments of $19,081. This contract sells for $255,564 today. What is the interest rate?
Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points
Question 14
1. Suppose an investment offers to double your money in 31 years. What annual rate of return are you being offered if interest is compounded semi-annually?
Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points
Question 15
1. Which one of the following capital budgeting technique ignores time value of money?

Profitability Index

Modified Internal Rate of Return (MIRR)

Payback

Net Present Value (NPV)

Internal Rate of Return (IRR)
1 points
Question 16
1. ABC Company earned $435,273 in taxable income for the year. How much tax does the company owe on this income?
Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points
Question 17
1. If you receive $1,939 at the end of each year for the first three years and $2,224 at the end of each year for the next two years. What is the future value of this cash flow stream? Assume interest rate is 4%.
Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points
Question 18
1. Suppose you take a mortgage for $124,884 for 16 years with annual payments. If the annual interest rate is 4.5%, calculate the total interest amount paid over the life of the loan. That is, calculate the total interest paid in 16 years.
Hint: Use the amortization table.
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 19
1. ABC is reviewing a project that will cost $2,213.The project will produce cash flows $772 at the end of each year for the first two years and $595 at the end of each year for the next three years. What is the profitability index? Assume interest rate is 9%.
Note: Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

1 points
Question 20
1. ABC Company had beginning retained earnings of $2,188. During the year, the company reported sales of $21,574, costs of $7,869, depreciation of $1,304, dividends of $915, and interest paid of $2,181. The tax rate is 18 percent. What is the retained earnings balance at the end of the year?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 21
1. ABC Company lists total assets of $4,947, current liabilities of $241 , long-term debt of $322 , and 346 shares of common stock. If the market price per share is $65, what is the market-to-book ratio?

Enter your answer rounded off to two decimal points.

1 points
Question 22
1. You are given the following information about ABC Company:
Interest expenses = $25,509
Times Interest Earned Ratio = 4 times
Tax Rate = 36.3%
What is the net income?
Enter your answer rounded off to two decimal points.

1 points
Question 23
1. What is the future value of $26,200 invested for 21 years at 5% compounded semi-annually?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 24
1. What is the effective rate of 23.85% compounded quarterly?
Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points
Question 25
1. You are given the following data for ABC Inc.:
Net income = $600
Net operating profit after taxes (NOPAT) = $1,291
Total assets = $2,500
Stockholders’ equity = $1,800
Total debt = $700
Total operating capital = $6,613
Barnes’ weighted average cost of capital is 15.8%.
What is the economic value added (EVA)?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 26
1. ABC, Inc. has total assets of $155,311, current assets of $29,370, current ratio of 3.9, and equity multiplier of 7.3. Compute long term debt.
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 27
1. Consider a taxable bond with a yield of 10.5% and a tax-exempt municipal bond with a yield of 4.7%. At what tax rate would you be indifferent between the two bonds?
Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points
Question 28
1. ABC Company has total assets of $789,024. There are 52,104 shares outstanding with a market value of $27 per share. If the net profit margin is 9.4% and the total asset turnover is 2.5, what is the price/earnings (P/E) ratio?
Enter your answer rounded off to two decimal points.

What is the amount of net fixed assets?

Question 1
ABC’s current assets comprise of cash, accounts receivables, and inventory. ABC has $13,956 in cash, $7,508 in
accounts receivables, and $7,019 in inventory. If the current ratio is 2.7 times, compute the quick ratio.
Note: Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as
12.35 in the answer box.

1 points
Question 2
ABC Company lists total assets of $4,961, current liabilities of $381 , long-term debt of $602 , and 307 shares of
common stock. If the market price per share is $63, what is the market-to-book ratio?
Enter your answer rounded off to two decimal points.

1 points
Question 3
Suppose an investment offers to double your money in 38 years. What annual rate of return are you being offered if
interest is compounded semi-annually?
Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For
example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points
Question 4
The present value of a 10-year annuity is $159,878. If the interest rate is 8% and payments are made at the end of
each period, what is the amount of each payment?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 5
ABC Company has net working capital of $1,845, current assets of $3,274, long-term debt of $2,890, and equity of
$1,085. What is the amount of net fixed assets?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box

1 points
Question 6
You are given the following data for ABC Inc.:
Net income = $600
Net operating profit after taxes (NOPAT) = $906
Total assets = $2,500
Stockholders’ equity = $1,800
Total debt = $700
Total operating capital = $5,710
Barnes’ weighted average cost of capital is 14.1%.
What is the economic value added (EVA)?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 7
Suppose you invest $17,450. If the interest rate is 9% compounded quarterly for the first 10 years and 14%
compounded monthly for the next 5 years, what is the future value after 15 years?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 8
Suppose you take a mortgage for $48,195 for 16 years with annual payments. If the annual interest rate is 3.5%,
calculate the total interest amount paid over the life of the loan. That is, calculate the total interest paid in 16 years.
Hint: Use the amortization table.
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 9

ABC Company has a debt ratio of 0.69. What is the debt-equity (D/E) ratio?
Note: Enter your answer rounded off to two decimal points. For example, if your answer is 0.123456789 then enter
as 0.12 in the answer box.

1 points
Question 10
A project has the following cash flows. What is the internal rate of return?
Year
Cash flow

0
-$121,000

1

2

68,150

$42,200

3
$39,100

13.47
%
14.82
%
13.85
%
14.39
%
12.71
%
1 points
Question 11
ABC Company had beginning retained earnings of $1,685. During the year, the company reported sales of $19,405,
costs of $7,823, depreciation of $1,077, dividends of $1,366, and interest paid of $2,058. The tax rate is 15 percent.
What is the retained earnings balance at the end of the year?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 12
ABC Company has $664,521 of operating income after all costs but before $52,937 of interest income, $37,323 of
dividend income, and taxes. What is the tax expense?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 13
ABC Company earned $438,069 in taxable income for the year. How much tax does the company owe on this
income?
Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For
example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points
Question 14
ABC Company has total assets of $897,844. There are 38,626 shares outstanding with a market value of $22 per
share. If the net profit margin is 9.9% and the total asset turnover is 2.1, what is the price/earnings (P/E) ratio?
Enter your answer rounded off to two decimal points.

1 points
Question 15
ABC, Inc. has a total asset turnover of 1.5 and a net profit margin of 12.2%. The firm has a return on equity of
21.7%. Calculate Marshall’s debt ratio.
Enter your answer as a percentage rounded off to two decimal points. Do not enter % in the answer box. For
example, if you get 0.1234567, then enter as 12.35 in the answer box.

1 points
Question 16
You are given the following information about ABC Company:
Interest expenses = $19,275
Times Interest Earned Ratio = 1.9 times
Tax Rate = 21.6%
What is the net income?
Enter your answer rounded off to two decimal points.

1 points
Question 17

ABC Company offers a perpetuity which pays annual payments of $8,888. This contract sells for $252,557 today.
What is the interest rate?
Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For
example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points
Question 18
If you receive $1,807 at the end of each year for the first three years and $749 at the end of each year for the next
two years. What is the future value of this cash flow stream? Assume interest rate is 5%.
Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For
example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points
Question 19
What is the net present value of the following cash flows? Assume an interest rate of 7%
Year

CF

0

-$13,455

1

$7,562

2

$6,861

3

$7,633

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answers box.

1 points
Question 20
If you receive $312 at the end of each year for the first two years and $682 at the end of each year for the next two
years.
Assume interest rate is 9%. What is the value at the end of the 4th year? That is. solve for FV at the end of the 4th
year.

Note: Enter your answer rounded off to two decimal points. Do not enter $ in the answer box. For example, if your
answer is $12.345 then enter as 12.35 in the answer box.

1 points
Question 21
What is the effective rate of 17.65% compounded quarterly?
Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For
example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points
Question 22
How many years will it take to triple your money at 4% compounded monthly?
Enter your answer rounded off to TWO decimal points. Do not enter “years” in the answer box.

1 points
Question 23
ABC, Inc. has total assets of $107,099, current assets of $24,497, current ratio of 2.9, and equity multiplier of 3.4.
Compute long term debt.
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 24
Consider a taxable bond with a yield of 10.4% and a tax-exempt municipal bond with a yield of 5.5%. At what tax
rate would you be indifferent between the two bonds?
Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For
example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points
Question 25
Debbie wants to have $66,897 in her bank account 5 years from now. The account will pay 0.9% interest per month.
How much money does she need to put in her bank account at the end of each month to achieve this goal?
Enter your answer rounded off to two decimal points. Do not enter % or $ in the answer box.

1 points
Question 26
What is the future value of $21,662 invested for 10 years at 11% compounded semi-annually?
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points
Question 27
ABC is reviewing a project that will cost $2,081.The project will produce cash flows $594 at the end of each year
for the first two years and $784 at the end of each year for the next three years. What is the profitability index?
Assume interest rate is 7%.
Note: Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as
12.35 in the answer box.

1 points
Question 28
Which one of the following capital budgeting technique ignores time value of money?
Profitability Index
Payback
Modified Internal Rate of Return
(MIRR)
Net Present Value (NPV)
Internal Rate of Return (IRR)

Why would a company use the Internal Rate of Return versus the Payback method when evaluating investment options?

Hello Puja

Topic 1:

Why would a company use the Internal Rate of Return versus the Payback method when evaluating investment options? What are the limitations of these two methods?

Topic 2:

Web Field Trip

Go to the “Calculators” section of the FinAid website (http://www.finaid.org) at http://www.finaid.org/calculators/ . Click the College Cost Projector link under the “Costs” heading, and use the calculator to estimate the cost of your education until graduation (use a 7% tuition inflation rate).

Next, go to http://www.usatoday.com/news/nation/census/2002-07-18-degree-dollars.htm and read the article on how much more a college graduate earns over their earning life than a high school graduate.

Next, estimate how much more a college graduate earns each year versus a high school graduate. Estimate how long your working life is until retirement.

Finally, use your favorite search engine to find an online calculator to assist in calculating the net present value. Enter the cost of your estimated college education (as a negative–it is an investment you are spending money on). Estimate the life of your working career and pick an appropriate discount rate.

Be prepared to discuss your findings in the Discussion area.

This question is based on your Web Field Trip.

Is your investment in a college education a positive or negative NPV project? Does the NPV of your investment in education effectively measure the true value of an education?

 

Assignment:

 

Kingston, Inc. management is considering purchasing a new machine at a cost of $4,154,018. They expect this equipment to produce cash flows of $777,270, $779,537, $922,254, $1,052,101, $1,331,951, and $1,159,218 over the next six years. If the appropriate discount rate is 15 percent, what is the NPV of this investment? (Enter negative amounts using negative sign e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25.)

The NPV is

 

Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $2,142,658. have a life of five years, and would produce the cash flows shown in the following table.

Year Cash Flow
1 $601,875
2 -279,639
3 693,922
4 990,764
5 876,835

What is the NPV if the discount rate is 12.71 percent? (Enter negative amounts using negative sign e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25.)

NPV is

 

Timeline Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $961,967, and project B’s cost is $1,038,935. Cash flows from both projects are given in the following table.

 

Year Project A Project B
1 $86,212 $586,212
2 313,562 413,277
3 427,594 231,199
4 285,552

 

What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.)
Discounted payback periods of project A ___________

 

Discounted payback periods of project B _____________

 

Which will be accepted witha discount rate of 8 percent? __________

 

Timeline should choose _____________

 

 

 

Compute the IRR on the following cash flow streams:

a. An initial investment of $26,568 followed by a single cash flow of $40,728 in year 6. (Round intermediate calculations to 4 decimal places, e.g. 1.2512 and final answer to 2 decimal places, e.g. 15.25%.)
IRR ___________%

 

b. An initial investment of $920,179 followed by a single cash flow of $1,495,024 in year 4. (Round intermediate calculations to 4 decimal places, e.g. 1.2512 and final answer to 2 decimal places, e.g. 15.25%.)

IRR _________%

 

 

c. An initial investment of $1,804,620 followed by cash flows of $1,384,595 and $1,444,193 in years 2 and 4, respectively. (Round answer to 2 decimal places, e.g. 15.25%.)

IRR _________%

 

Draconian Measures, Inc., is evaluating two independent projects. The company uses a 15.42 percent discount rate for such projects. The costs and cash flows for the projects are shown in the following table. What are their NPVs?

Year Project 1
Project 2
0 $(7,656,981) $(10,906,459)
1 3,273,419 1,987,946
2 1,779,079 3,425,083
3 1,468,895 3,168,471
4 1,139,143 3,845,484
5 1,193,849 4,308,099
6 1,489,916
7 1,456,167

What are their NPVs? (Enter negative amounts using negative sign, e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25.)
The NPV of project 1 is $______, and the NPV of Project 2 is $ ___________

 

Jekyll & Hyde Corp. is evaluating two mutually exclusive projects. The cost of capital is 15 percent. Costs and cash flows are given in the following table.

Year Project 1 Project 2
0 -$1,134,369 -$1,228,455
1 232,225 350,035
2 324,730 350,035
3 420,660 350,035
4 467,450 350,035
5 692,250 350,035

Calulate NPV and IRR of two projects. (Enter negative amounts using negative sign, e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25 or 12.25%.)

NPV of project 1 is $____________

NPV of project 2 is $_______

IRR of project 1 is _________%

IRR of project 2 is ________%

 

Which project should be acceted?

 

Jekyll and Hyde Corp. should accept

A. project 2

B. Neither project

C. project 1

 

 

The __________ capital budgeting technique is the most appropriate one to use.

*Internal rate of return

*payback period

*accounting rate of return

*net present value

What rate shouldbe used to calculate a project’s net present value?

*coupon interest rate on bonds

*cost of capial

*required rate of return on equity

*treasury bll rate

If a project’s IRR exveeds its ______, the project should be _____.

cost of capial rejected

cost of capital acceped

mirr rejected

npv accepted

 

Boomer Biscuit Inc. needs to automate its production line. The project costs $275,000 and is expected to provide after-tax cash flows of $73,306 for eight years. Management estimates its cost of capital is 12 percent. What is the project’s MIRR?
16%

1%

12%

18%

The capital-budgeting process starts with a firm’s

sales forecast
strategic plan
financial plan
business plan

 

 

All of the following represent examples of key reasons for making capital expenditures except

replacing production equipment.
installing energy efficient bulbs throughout the company’s facilities.
floating a corporate bond issue.
renewal of a company’s fleet of delivery trucks.

 

 

 

Which of the following is not one of the steps necessary for conducting a capital budgeting analysis?

Estimate the project’s future cash flows.
Compute the project’s NPV.
Determine the cost of the project.
Decide on how the capital required will be raised.

 

 

 

 

 

Which one of the following is not an advantage of the NPV method of analyzing capital projects?

It is easy to understand even without an accounting or finance background.
It uses a discounted cash flow technique to adjust for the time value of money.
It is consistent with the goal of maximizing shareholder value.
It provides a direct (dollar) measure of how much a capital project will increase or decrease the value of a firm

What forces do you think might motivate a competitor to “throw caution to the wind”. Discuss

What forces do you think might motivate a competitor to “throw caution to the wind”. Discuss

Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?Most of the time, the buyer is wasting his or her money when buying an ergogenic aid to improve performance. Still, even well-educated athletes often take them. What forces do you think might motivate a competitor to “throw caution to the wind” and buy and take unproven supplements sold as ergogenic aids? What role might advertising play?