Share
Explore BrainMass

Finance

Potential Problems with an Agency Relationship

The recent experience of the U.S. financial sector with the so called subprime crisis and the attendant attempts at financial market reform have centered to some large extent on the behavior of executives in those firms who have had alleged conflict of interest relationships. In financial theory we call this "the agency problem"

Financial Management: Define terms and their roles in finance

Resource: Financial Management Define each term below and identify their roles in finance. ? Finance ? Efficient market ? Primary market ? Secondary market ? Risk ? Security ? Stock ? Bond ? Capital ? Debt ? Yield ? Rate of return ? Return on investment ? Cash flow Format your paper consistent with APA gu

Promotion and Price

Can you help me with the following assignment/project? Vacations Fitness/Exercise products Gay men or women Black women aged 18-30 1. Explain what you think would be an appropriate promotions strategy for the groups listed above. In doing so compare and contrast the two promotions strategies explaining why you think

Opportunity cost

Explain "opportunity cost" and how it relates to the definition of economics. To illustration this concept, give your explanation of the following decisions that would entail the greatest opportunity cost: a.Allocating a square block in the heart of New York City for a surface parking lot, OR b. Allocating a square block at th

Finding Annual Operating Cash Flow

Please help answer the following question. Hi Fliers is considering making and selling custom kites in two sizes. The small kites would be priced at $9 and the large kites would be $24. The variable cost per unit is $5 and $11, respectively. Jill, the owner, feels that she can sell 2,600 of the small kites and 1,700 of the l

1. The Internal Revenue Code authorizes deductions for trade or business activities if the expenditure is "ordinary and necessary". 2. Tax cost recovery methods include depreciation, amortization, and depletion. 3. The basis for a personal use asset converted to business use is the lesser of the asset's cost basis or fair market value on the date of the transfer or conversion. 4. An asset's tax adjusted basis is usually greater than its book adjusted basis. 5. All tax gains and losses are ultimately characterized as either ordinary or capital. 6. Generally, interest income is taxed at preferential capital gains rates and dividend income is taxed at ordinary rates. 7. When a taxable bond is issued at a premium, the taxpayer must calculate and apply the yearly amortization amount to reduce a portion of the actual interest payments that taxpayers include in gross income. 8. One purpose of Form W-4 is to determine an employee's withholding. 9. Employers receive a deduction for compensation paid to and employment taxes paid on behalf of employees. 10. Defined benefit plans specify the amount of benefit an employee will receive on retirement while defined contribution plans specify the amounts that employers and employees will (or can) contribute to an employee's plan. 11. A taxpayer can only receive a saver's credit if she contributes to a qualified retirement account. 12. Renting a residence may have nontax advantages over owning a home. 13. Taxpayers meeting certain requirements may be allowed to exclude at least a portion of gain realized on the sale of a principal residence.

1. The Internal Revenue Code authorizes deductions for trade or business activities if the expenditure is "ordinary and necessary". 2. Tax cost recovery methods include depreciation, amortization, and depletion. 3. The basis for a personal use asset converted to business use is the lesser of the asset's cost basis or fair mark

Pricing...

(a.) You know from data collected on the Widget Market that market demand and market supply have both increased recently. As manager of the facility, what decisions should you make regarding production levels and pricing for your Widget facility? Remember that supply and demand are about the market supply and market demand, w

Policy Calculations Insurers Operate

1. Assume that insurers operate in an environment where price regulation does not exist. Describe two potential benefits that this type of system provides to consumers as well as two potential costs. 2. Define agency costs and discuss whether these costs reduce business value. 3. Describe the common objectives that employ

Differentiate between a defined contribution pension plan and a defined benefit pension plan. Explain how the employer's obligation differs between the two types of plans. Question 10 Identify the five components that comprise pension expense. Briefly explain the nature of each component. E.20-7 (Basic Pension Worksheet) The following defined pension data of Doreen Corp. apply to the year 2008. Projected benefit obligation, 1/1/08 (before amendment) 560,000 Plan assets, 1/1/08 546,200 Prepaid/accrued pension cost (credit) 13,800 "On January 1, 2008, Doreen Corp., through plan amendment, grants prior service benefits having a present value of " 100,000 Settlement rate 9% Service cost 58,000 Contributions (funding) 55,000 Actual (expected) return on plan assets 52,280 Benefits paid to retirees 40,000 Prior service cost amortization for 2008 17,000 Instructions For 2008, prepare a pension worksheet for Doreen Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts. E.22-19 (Error Analysis; Correcting Entries) A partial trial balance of Julie Hartsack Corporation is as follows on December 31, 2008. dr. cr. Supplies on hand 2,700 Accrued salaries and wages 1,500 Interest receivable on investments 5,100 Prepaid insurance 90,000 Unearned rent 0 Accrued interest payable 15,000 Additional adjusting data: A physical count of supplies on hand on December 31, 2008, totaled $1,100. Through oversight, the Accrued Salaries and Wages account was not changed during 2008. Accrued salaries and wages on December 31, 2008, amounted to $4,400. The Interest Receivable on Investments account was also left unchanged during 2008. Accrued interest on investments amounts to $4,350 on December 31, 2008. The unexpired portions of the insurance policies totaled $65,000 as of December 31, 2008. $28,000 was received on January 1, 2008 for the rent of a building for both 2008 and 2009. The entire amount was credited to rental income. Depreciation for the year was erroneously recorded as $5,000 rather than the correct figure of $50,000. A further review of depreciation calculations of prior years revealed that depreciation of $7,200 was not recorded. It was decided that this oversight should be corrected by a prior period adjustment. Instructions Assuming that the books have not been closed, what are the adjusting entries necessary at December 31, 2008? (Ignore income tax considerations.) Assuming that the books have been closed, what are the adjusting entries necessary at December 31, 2008? (Ignore income tax considerations.)

Please see attached Question 2 Differentiate between a defined contribution pension plan and a defined benefit pension plan. Explain how the employer's obligation differs between the two types of plans. Question 10 Identify the five components that comprise pension expense. Briefly explain the nature

Bedrosian Incorporated Line of Credit

PROBLEM ATTACHED IN THE FILE Bedrosian Incorporated has a line of credit from the Belmont National Bank that is due to be renewed on February 1. The bank has requested the company's current Income Statement and Comparative Statements of Financial Position which appear below. TAX RATE 40% KEEP SCROOLING DOWN T

FedEx Corporation SEC 10K

1. Compute the margin, turnover, and return on investment (ROI) in 2005 for each of FedExâ??s four business segments (Hint: page 99 reports total segment assets for each business segment.) 2. Assume that FedEx established a minimum required rate of return of 15% for each of its business segments. Compute the residual inco

Advanced Taxation: Stock, type of entity, basis, distributions

Sarah owns 45% of the stock in a C corporation that had a profit of $260,000 in 2011. Kevin owns a 45% interest in a partnership that had a profit of $260,000 during the year. The corporation distributed $30,000 to Sarah, and the partnership distributed $30,000 to Kevin. 1. How much income does Kevin report for 2011? 2. Ho

Financial Analysis Problem of Acme

Please help with solution / explanation for the following problem: Acme Manufacturing is a decentralized corporation. Divisions are treated as investment centers. In recent years, Acme has been running about 11% ROA for the corporation as a whole, and has a cost of capital of 9%. One of their most profitable divisions is

Increase in service level for newspaper stand operating cost change

Suppose that a newspaper stand is operating under the following conditions; paper cost $.4, have no salvage value, and sell for $.80. If the salvage value is increased by$.1, what is the increase in service level? a) .5 b) 1 c) 0.07 d) 0 e) unable to determine given only the above information.

Expected Return Portfolio Stocks

Consider the following information for three stocks, A,B,and C, and portfolios of these stocks. The stocks' returns are positively but not perfectly positively correlated with one another ... the correlation coefficients are all between 0 and 1 Stock Expected Standard Deviation Beta

Professional Skills Essay

Describe situations that you have been through which would be appropriate to apply on these two professional skills: 1. Managing Conflict Skills 2. Negotiations Skills Where possible, try to relate all skills in a 'business / financial situation' as my major is Finance. The assignment structure should be as below:

Playing the stock market: Why would a good stock drop by $3.00 in one day?

Why would a good stock drop by $3.00 in one day? What do you tell your client if the market drops again tomorrow and his stock drops with it? Are some people emotionally unsuited to handle the stresses of the ups and downs of the stock market? Should some people stay out of the stock market? If so, what are their invest

MBA Risk Concepts

Risk that can be eliminated through diversification is called ______ risk. a. unique b. firm-specific c. diversifiable d. all of the above Asset A has an expected return of 20% and a standard deviation of 25%. The risk free rate is 10%. What is the reward-to-variability ratio? a. .40 b. .50 c. .75 d. .80

Constant- growth model for Metatrend's stock

Metatrend's stock will generate earnings of $6 per share this year. The discount rate for the stock is 15%. and the rate of return on reinvested earning also is 5%. a. Find both the growth rate of dividends and the price of the stock if the company reinvests the following fraction of its earnings in the firm:(i) 0%; (ii) 40%,

Accounting and Finance: Balance Sheet and Income Statement

#1. (Balance sheet and income statement) Johnson's Scuba Co. has a weird accountant who reported the balance sheet and income statement items in alphabetical order. Please put these items in the correct format for a balance sheet and income statement for Johnson's Scuba Co. for the year ending January 31. All of the data are in

Cost of Internal Equity Capital and External Equity Capital

1.The common stock for Grapevine Plumbing Company currently sells for $40 per share. If a new issue is sold, the flotation cost is estimated to be $7 per share. The company had earnings of $2.00 per share four years ago. Next year, the company expects to have earnings of $3.22 per share. The company maintains a constant dividend

Loan Amortization

Messineo LLC borrowed $15,000 at a 14% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal annual end of year payments. As the CFO of Messineo, LLC you must prepare a report of the pertinent information in a short summary for the CEO. a. Calculate the annual end of year loan payment amou