Defense Electronics

How long does it take $1,000 to quadruple in value if you have an 11% annual return? Assume annual compounding, and express your answer in years (to two decimals)
2) Assume the following spot and forward rates for the euro ($/euro).
Spot rate: $1.6277
30 day forward rate: $1.6330
90 day forward rate: $1.6353
120 day forward rate: $1.6387
A) What is the dollar value of one euro in the spot market?
B) Suppose you issued a 120-day forward contract to exchange 200,000 euros into Canadian dollars. How many dollars are involved?
C) How many euros can you get for one dollar in the spot market?
D) What is the 120-day forward premium?
3) The MacHardee Plumbing Company has common stock outstanding. The stock paid a dividend of $2.00 per share last year, but the company expects that earnings and dividends will grow by 25% for the next two years before dropping to a constant 9% growth rate afterward. The required rate of return on similar common stocks is 13%.

What is the per-share value of the company’s common stock?

4) Defense Electronics Corporation is considering building an overseas manufacturing facility to produce radar detection systems. As a consultant to DEC, you have the contract to determine the appropriate discount rate for evaluating this project.
Current information regarding DEC includes:
Debt: 25,000 bonds outstanding, each with a coupon rate of 6.5% paid semi-annually, par value of $1,000, maturity of 20 years, and current value of 96% of par.
Common Stock: 400,000 shares outstanding with a current value of $89/share. An annual dividend of $4.74 has just been paid, and dividends are expected to grow by 9% annually into the foreseeable future.
Preferred Stock: 35,000 shares of 6.5% stock with a par value of $100/share, and a current value of $99/share.
Tax rate: DEC’s combined tax rate is 34%.
Other liabilities: DEC has the usual accounts payable and accruals on its balance sheet, but does not regularly utilize any interest-bearing debt other than the bonds described above.
Risk Adjustment: Since the new manufacturing facility is to be built overseas, management is suggesting an adjustment factor of +2% to account for the increased riskiness.
Showing your work, recommend an appropriate discount rate for DEC’s proposed venture. You must show your work to receive any credit.

displaying total costs graphically.

Purpose of Assignment 

Electronic spreadsheets are useful tools, especially when creating a business budget. Once a spreadsheet is set up correctly in Excel®, values can be modified at any time, and the electronic spreadsheet will automatically update itself. Students will create a spreadsheet of computer equipment for a small fictional business where they are the owner. They will include the cost of all hardware and software needed for their employees, and calculate a monthly budget for the equipment. 

Assignment Steps 

Resources:

· Research hardware and software to satisfy operational requirements described above

· Microsoft Office 365, Office 2016: Introductory: Module 1: Creating a Worksheet and a Chart

· Microsoft Office 365, Office 2016: Introductory: Module 2: Formulas, Function, and Formatting

Scenario: Imagine you are the owner of a small internet business where you employ five people. You need to budget for the cost of hardware and software needed to run company operations. Each employee is required to work both in the office and remotely, and needs access to company data at all times. 

Choose the hardware and software that will provide your employees with the ability to stay connected to internal company data, communicate and collaborate with coworkers, and process data and sales information using wording, processing, and spreadsheet software applications. 

Create a business budget sheet using Microsoft® Excel®. In the budget sheet, do the following: 

· List the make and model of desired hardware devices and their cost.

· List software operating systems and applications for each device and their costs.

· Sum up the cost for both hardware and software for each employee, and then calculate the average monthly costs to maintain these systems.

· Insert a graph or chart displaying total costs graphically.

· Label columns/rows with titles reflecting data they contain.

· Use no more than two sheets in one workbook to display required data.

· Format data to highlight important totals. 

Note: this assignment only requires that you submit an Excel® Workbook file. There are no written or APA guideline requirements. 

Capital Management

Working Capital Management

 

Unit outcomes addressed in this Assignment:

·      Analyze working capital management in a healthcare organization.

·      Describe the tools that an organization manager can use to manage the revenue cycle.

 

Course outcome addressed in this Assignment:

 

Describe the overall planning process and the key components of the financial plan.

Instructions

Solve the following financial problems from your textbook, and submit the answers, including your work, in a Word or Excel document:

Problem 16.5 from page 602, Chapter 16 (Gapenski, 2012)

 

the slope of a regression line

1. Beta is estimated as the slope of a regression line fit to pairs of periodic returns, (rx, ry), where: (Points : 1)

rx is the return for a market index such as the S&P 500 Index. rx is the return for the stock being analyzed—for example, IBM’s return if we are estimating IBM’s beta. the slope measures the average return for the market portfolio for each percentage change in the value of the security of interest. ry is the return for the market index such as the S&P 500 Index.

Question 2. 2. Weights used in calculating the WACC should: (Points : 1)

sum to 1.00. always include Wd. be based on the book value of each source of financing. be calculated according to the price of each security—so if the price of a bond is $1,000, and the price of common stock is $50, then the weight of debt would be .20.

Question 3. 3. Which of the following statements regarding the cost of preferred stock is true? (Points : 1)

It is typically found by solving for an annuity’s discount rate. It is typically found by solving for an annuity due’s discount rate. It is found similarly to a perpetuity’s discount rate but with irregular spacing of the dividends. It is typically found by solving for a perpetuity’s discount rate.

Question 4. 4. In the Capital Asset Pricing Model, the market risk premium is best approximated by: (Points : 1)

the most recent one-year return on the S&P 500 Index (or another market index). the long-term historic return on a stock market index such as the S&P 500 (or another market index). the long-term average spread of the S&P 500 (or another market index) over the yield of long-term government bonds. the return of the S&P 500 (or another market index) over the current yield of long-term government bonds.

Question 5. 5. In the Capital Asset Pricing Model, the risk-free rate: (Points : 1)

links the CAPM to current market conditions. is the historic long-term average rate of government bonds. can be approximated by using yields on high-rated corporate bonds. is always the current yield on 30-year US government Treasury bonds.

Question 6. 6. Total risk is measured by: (Points : 1)

the standard deviation of returns. the firm’s beta. Moody’s, Standard & Poor’s, and Fitch ratings. the variability of EBIT.

Question 7. 7. The Hamada Equation allows the firm to: (Points : 1)

solve for a company’s total risk. adjust the beta of a pure-play firm for its use of debt financing. estimate its asset beta. Both b and c are correct.

Question 8. 8. Using the Capital Asset Pricing Model, estimate the required rate of return for Caterpillar Incorporated stock if the company’s beta is 1.87 (as of February 1, 2013). Use a risk-free rate of 3% and a market risk premium of 6%. (Points : 1)

8.61% 11.22% 14.22% 16.83%

Question 9. 9. The financing mix reflected in the WACC should: (Points : 1)

reflect the desired mix and not necessarily the mix being used to finance a specific project. vary from project to project, depending on how they are financed. always reflect the firm’s current capital structure. None of these answers is correct.

Question 10. 10. Chapter 9 discusses three different types of returns. Identify the item in the list below that is NOT one of those three types of returns. (Points : 1)

the actual rate of return the expected rate of return the risk-free rate of return the required rate of return

0

15

0

663841601

MultipleChoice

25

663841593

MultipleChoice

9

0

663841594

MultipleChoice

17

0

663841595

MultipleChoice

19

0

663841596

MultipleChoice

12

0

663841597

MultipleChoice

11

0

663841598

MultipleChoice

7

0

663841599

MultipleChoice

27

0

663841600

MultipleChoice

You may also discuss how the essay is successful with reservations.

Need a critical evaluation essay of  at least 700 words, but no more than 850.  The essay will be on the Declaration of Independence. I have decided the Declaration of Independence was a successful argument  and need to discuss why. You may use the structure of the argument, the tone, and the various types of support (ethos, pathos, and logos) as proof of the argument’s success. Make sure that your thesis has an introduction that contains a hook and a thesis, body paragraphs that discuss one proof at a time (one paragraph per example), and a conclusion. If you decide that the essay is not successful, then discuss the fallacies that the argument makes. You are still required to have a strong introduction (hook and thesis), body paragraphs that discuss one fallacy at a time, and a conclusion. You may also discuss how the essay is successful with reservations. In this case, point to both the support and the fallacies you have found in the work.

thesis is provided to work off:

Thomas Jefferson’s official way of stating the separation of Great Britain from the 13 colonies was through the Declaration of Independence, in which he used facts, history, and logic to demand freedom from English rule.

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    DeclarationofIndependence.docx
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    essayinstructions.docx
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    ENGL102CriticalEvaluationEssayRubric.pdf

Garza and Neely, CPAs, are preparing their service revenue (sales) budget for the coming year (2012). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.

Department    Quarter 1    Quarter 2    Quarter 3    Quarter 4
Auditing        2.420    1.920    2.150        2.500
Tax        3.130    2.620    2.200        2.600
Consulting        1.740    1.740    1.740        1.740

Average hourly billing rates are: auditing $84, tax $93, and consulting $104.

Prepare the service revenue (sales) budget for 2012 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.

Stanton Company is planning to produce 1,300 units of product in 2012. Each unit requires 3.50 pounds of materials at $5.00 per pound and a half-hour of labor at $13.60 per hour. The overhead rate is 90% of direct labor.

(a) Compute the budgeted amounts for 2012 for direct materials to be used, direct labor, and applied overhead.
(b) Compute the standard cost of one unit of product. (Round answer to 2 decimal places, e.g. 2.75.)
In Harley Company it costs $28 per unit ($18 variable and $10 fixed) to make a product that normally sells for $52. A foreign wholesaler offers to buy 4,770 units at $26 each. Harley will incur special shipping costs of $1 per unit. Assuming that Harley has excess operating capacity.

Indicate the net income (loss) Harley would realize by accepting the special order. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.)

Reject Order        Accept Order        Net Income
Increase
(Decrease)

Vintech Manufacturing incurs unit costs of $7 ($4 variable and $3 fixed) in making a subassembly part for its finished product. A supplier offers to make 11,100 of the part at $6.30 per unit. If the offer is accepted, Vintech will save all variable costs but no fixed costs.

Prepare an analysis showing the total cost saving, if any, Vintech will realize by buying the part. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.)

Make        Buy        Net Income
Increase
(Decrease)

Ridley Company has a factory machine with a book value of $89,100 and a remaining useful life of 4 years. A new machine is available at a cost of $201,000. This machine will have a 4-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $617,100 to $429,300.

Prepare an analysis showing whether the old machine should be retained or replaced. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.)

Retain
Equipment         Replace
Equipment         Income
Increase
(Decrease)

incorporate all responses

1.              Suppose the weighted average cost of capital of the Gadget Company is 10%. If Gadget has a capital structure of 50% debt and 50% equity, a before-tax cost of debt of 5%, and a marginal tax rate of 20%, then its cost of equity capital is

The below problem relates to question 2, 3, 4 and 5 below. You can incorporate all responses on one Excel spreadsheet

Barbara Andrade is an equity analyst who covers the entertainment industry for Greengable Capital Partners, a major global asset manager. Greengable owns a significant position with a large unrealized capital gain in Mosely Broadcast Group (MBG). On a recent conference call, MBG’s management states that they plan to increase the proportion of debt in the company’s capital structure. Andrade is concerned that any changes in MBG’s capital structure will negatively affect the value of Greengable’s investment. To evaluate the potential impact of such a capital structure change on Greengable’s investment, she gathers the information about MBG given in Exhibit A.

 

EXHIBIT A Current Selected Financial Information for MBG

Yield to maturity on debt 8.00%
Market value of debt $100 million
Number of shares of common stock 10 million
Number of shares of common stock $30
Cost of capital if all equity-financed 10.3%
Marginal tax rate 35%
   

 

Andrade expects that an increase in MBG’s financial leverage will increase its costs of debt and equity. Based on an examination of similar companies in MBG’s industry, Andrade estimates MBG’s cost of debt and cost of equity at various debt-to-total capital ratios, as shown in Exhibit B.

 

EXHIBIT B Estimates of MBG’s Before-Tax Costs of Debt and Equity

 

Debt-to-Total Capital Ratio Cost of Debt Cost of Equity
20% 7.7% 12.5%
30% 8.4% 13.0%
40% 9.3% 14.0%
50% 10.4% 16.0%

 

 

2.              MBG is best described as currently: A. 25% debt financed and 75% equity financed. or B. 33% debt financed and 66% equity financed. or C. 75% debt financed and 25% equity financed.

 

3.              Based on Exhibits A and B, the current after-tax cost of debt for MBG is:

 

Current after-tax cost of debt = 5.2%

 

 

4.                Based on Exhibits A and B, MBG’s current cost of equity capital is:

Current Cost of Equity Capital = 10.3%

 

5.              Based on Exhibits A and B, what debt-to-total capital ratio would minimize MBG’s weighted average cost of capital? A. 20% or. B. 30%. or C. 40%.

Calculating Returns and Variability

Assignment 5 Text edition 7: Chapter 12 – Questions and Problems – 5, 7, 8, 9, 12, 13. Rubric Assignment 5: Calculation Questions. Show your work – include formulas and step by step calculations. 5. Nominal versus Real Returns: What is the average annual return on Canadian stock from 1957 through 2008: a. In nominal terms? b. In real terms? 7. Calculating Returns and Variability: Using the following returns, calculate the arithmetic average returns, the variances and the standard deviations for X and Y. Returns Year X Y 1 6% 18% 2 24 39 3 13 -6 4 -14 -20 5 15 47 8.

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Assignment 5 Text edition 7: Chapter 12 – Questions and Problems – 5, 7, 8, 9, 12, 13. Rubric Assignment 5: Calculation Questions. Show your work – include formulas and step by step calculations. 5. Nominal versus Real Returns: What is the average annual return on Canadian stock from 1957 through 2008: a. In nominal terms? b. In real terms? 7. Calculating Returns and Variability: Using the following returns, calculate the arithmetic average returns, the variances and the standard deviations for X and Y. Returns Year X Y 1 6% 18% 2 24 39 3 13 -6 4 -14 -20 5 15 47 8. Risk Premiums: Refer to the table attached and look at the period from 1970-1975. a. Calculate the arithmetic average returns for large-company stocks and T-Bills over this period. b. Calculate the standard deviation of the returns for large-company stocks and T-Bills over this period. c. Calculate the observed risk premium in each year for the large-company stocks versus T-Bills. What was the average risk premium over this period? What was the standard deviation of the risk premium over this period? d. Is it possible for the risk premium to be negative before an investment is undertaken? Can the risk premium be negative after the fact? 9. Calculating Returns and Variability: You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past 5 years: 2 percent, -8 percent, 24percent, 19 percent and 12 percent. a. What was the arithmetic average return on Crash-n-Burn’s stock over this 5-year period? b. What was the variance of Crash-n-Burn’s returns for this period? The standard deviation? 12. Effects of Inflation: Look at table 12.1 (same table from Q8) and the attached figure (12.4), When were T-bill rates at their highest over the period of 1957 through 2008? Why do you think they were so high during this period? What relationship underlies your answer? 13. Calculating Investment Returns: You bought one of Great White Shark Repellant Co’s 7 percent…

resolve the situations

Assignment 2: LASA 1—The Time Value of Money

By Wednesday, October 15, 2014 submit a 4-5 page report based on the following problem:

Mary has been working for a university for almost 25 years and is now approaching retirement. She wants to address several financial issues before her retirement and has asked you to help her resolve the situations below. Her assignment to you is to provide a 4-5 page report, addressing each of the following issues separately. You are to show all your calculations and provide a detailed explanation for each issue.

Issue A:
For the last 19 years, Mary has been depositing $500 in her savings account , which has earned 5% per year, compounded annually and is expected to continue paying that amount. Mary will make one more $500 deposit one year from today. If Mary closes the account right after she makes the last deposit, how much will this account be worth at that time?

Issue B:
Mary has been working at the university for 25 years, with an excellent record of service. As a result, the board wants to reward her with a bonus to her retirement package. They are offering her $75,000 a year for 20 years, starting one year from her retirement date and each year for 19 years after that date. Mary would prefer a one-time payment the day after she retires. What would this amount be if the appropriate interest rate is 7%?

Issue C:
Mary’s replacement is unexpectedly hired away by another school, and Mary is asked to stay in her position for another three years. The board assumes the bonus should stay the same, but Mary knows the present value of her bonus will change. What would be the present value of her deferred annuity?

Issue D:
Mary wants to help pay for her granddaughter Beth’s education. She has decided to pay for half of the tuition costs at State University, which are now $11,000 per year. Tuition is expected to increase at a rate of 7% per year into the foreseeable future. Beth just had her 12th birthday. Beth plans to start college on her 18th birthday and finish in four years. Mary will make a deposit today and continue making deposits each year until Beth starts college. The account will earn 4% interest, compounded annually. How much must Mary’s deposits be each year in order to pay half of Beth’s tuition at the beginning of each school each year?

Turn in your completed work to the M3: Assignment 2 Dropbox by Wednesday, October 15, 2014.

Assignment 2 Grading Criteria
Maximum Points
Calculated the compounded interest over 20 years and evaluated the value of the savings account upon closing. (CO 1)
32
Calculated the bonus payout over 20 years vs. a one time payout with interest and distinguished which bonus option would be better for the client. (CO 1)
32
Calculated the present value of the bonus and analyzed the difference in bonus for the client. (CO 2)
32
Analyzed the tuition costs for the client and determined what the future costs will be and determined how these funds can be accumulated over time. (CO 4)
60
Written Components: Organization, usage and mechanics, APA elements, style
44
Total:
200