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Advantages and disadvantages of various valuation methods

Describe the advantages and disadvantages of these 3 valuation methods: 1) the Discounted Cash Flow method (fundamental method) 2) the Venture Capital Method and 3) the First Chicago Method. In answering the question, assume that you plan to value a startup. response is 1,236 words plus references

Practice Problems

Problem 8-6 Cost of Assets, Subsequent Book Values and Balance Sheet preparation The following events took place at Pete's Painting Company during 2008. a. On January 1, Pete bought a used truck for $14,000. He added a tool chest and side-racks for ladders for $4,800. The truck is expected to last four years and then be so

Multiple Choice Questions - finance practice quiz

25. A common size income statement: a. uses the same dollar amount of revenues for each year. b. expresses items as a percentage of revenues. c. makes comparisons between years more difficult. d. is useful in estimating the impact of inflation. 26. Which of the following is(are) an example of a measure of leverage?

Multiple Choice Questions - finance (securities, auditors and more)

19. Firms that issue registered securities are required to file, with the SEC on an annual basis, which of the following? a. An annual report. b. A prospectus. c. A form 10-K. d. A set of financial statements. e. All of these. 20. Management's statement of responsibility: a. usually refers to the company's syst

Multiple Choice Questions - finance (earnings per share, cash flows and more)

14. The earnings per share of common stock calculation: a. is made by dividing net income by the number of shares of common stock outstanding at the end of the year. b. is complicated by the declaration of cash dividends during the year. c. includes gains or losses from treasury stock transactions. d. is complicated by t

Multiple Choice Questions - finance

When common stock has a par value: a. the liability of the stockholders is limited to the par value. b. there will probably be additional paid-in capital in the balance sheet. c. the market value of the stock will be higher than if there is no par value. d. the paid-in capital will equal the par value of the number o

Multiple Choice Questions - finance practice quiz

If the market price of a bond exceeds its face amount: a. the coupon rate is less than the market interest rate. b. the coupon rate is more than the market interest rate. c. the company's ROI and working capital have been increasing over time. d. the maturity rate has been declining. The amortization of bond discount:

Finance: Portfolio weighting, After tax cash flows, Systematic risk

14. You own a portfolio that consists of $8,000 in stock A, $4,600 in stock B, $13,000 in stock C, and $5,500 in stock D. What is the portfolio weight of stock A? A. 14.79 percent B. 15.91 percent C. 18.42 percent D. 19.07 percent E. 25.72 percent 10. Assume a project has e

Transactions, Company's Income Statement

1: Listed below are transactions or items that are frequently reported in financial statements. 1. Income effect due to changing from the double-declining-balance method to the straight-line method of depreciation. 2. Collection of accounts receivable. 3. Purchase of an insurance policy on December 31 that provides coverage

Build a business outline for Wal-Mart

Please help me in bulding an outline about Wal-Mart company with citations and references. The following points are important: 1-brief description of the company 2-description of firm's budgeting process 3-management accounting information system 4-costing process 5-capital decision, capital acquisition and structure 6

Purchase of Fixed Assets for Cash

1. Consider the current asset accounts (cash, accounts, receivable and inventory) individually and as a group. What impact will the following transactions have on each account and current assets in total (Increase, Decrease, No change)? (Hint: Each transaction has two sides that are equal in amount but opposite in sign. Consider

Personal Finance Investing Bonds

Summarize the concept of investing in bonds. include a definition of what kind of investment a bond is, how bonds are bought and sold, how bond prices are affected by interest rate fluctuations, and what type of investors are best suited for investing in bonds, and what expectations they should have. Be sure to include a brief a

Biases Situations Associates

Which one of the following biases best applies to this situation where one associates A with being better than B? An article just appeared in a respected journal that attributes behavioral biases to mispricing of different classes of common stock. For instance, the authors suggest that if class B shares of common stock have b


Company ABC has expected sales of 12,000 units this year, an ordering cost of $6 per order and carrying costs of $1.60 per unit. What is the average inventory? 310 units 300 units 150 units 155 units None of the above 9.The operating cycle begins when _____ and ends when___

Valuation Process and Acquisition Process

There is both an Acquisition Process and Valuation Process that an organization will undertake. Please Describe the valuation process in detail and secondly, compare and contrast the business valuation approaches. Identify the potential strengths and weaknesses that may exist for each approach

Cost Cutting Measures

After reviewing all the cost cutting measures I anticipate I could cut back and save approximately $15000 a year if I put those measures into practice. Some of the cost cutting measures would not be hard to do because I do not smoke and I make my own coffee at home. However, I do love my shoes and I love to pamper myself with

Current & Future Trends in Financial Services

Please help with the following problem. SUBJECT: The Future of the Financial System and Trends in the Money and Capital Markets QUESTION: If you were managing a small bank or insurance agency in your local community, what current and future trends in financial services and institutions would likely have the greatest impac

Finanace - Impact on Shareholders

Please help with the following problem. Currently a firm has $1 million in 10% debt. The firm also has 50,000 shares outstanding that sell for $40 each. The firm used the $1.0 million to repurchase stock, as they previously were an all equity firm. Three states of the economy are possible: a slump under which the firm would

Growth rates and common stock valuation

Business has been good for Keystone Control Systems, as indicated by the four-year growth in earnings per share. The earnings have grown from $1.00 to $1.63. a. Determine the compound annual rate of growth in earnings (n = 4) b. Based on the growth rate determined in part a, project earnings for next year. c. Assume t

Mortgage Amortization

On September 30, 2009, Dixon Inc. incurs a 30-year $700,000 mortgage liability in conjunction with its purchase of a candy factory. This mortgage is payable in equal monthly installments of $3,758 which include interest computed at an annual rate of 5%. The first monthly payment is made on October 31, 2009. This mortgage is f

Article Summary

Summarize the article below. 652 words ----------------------------- Copyright Thomson Tax and Accounting d/b/a RIA Jan/Feb 2007 [Headnote] With much of the Sarbanes-Oxley compliance effort now behind them, chief financial officers are using a suite of methodologies that are comprised under business performance mana


A company produces two products: Product A and Product B. Each product must go through two processes. Each Product A produced requires 2 hours in Process 1 and 5 hours in Process 2. Each Product B produced requires 6 hours in Process 1 and 3 hours in Process 2. There are 80 hours of capacity available each week in each process.


10. Jo's Coffee Company owns two stores in Arizona. Their corporate office is considering eliminating the one of their stores due to declining sales. Segmented contribution income statements are as follows and common fixed costs are allocated on the basis of sales. West East Total

Problems about Special Order and Maximizing Profits

1. Gamboa's Company has a capacity of 50,000 units per year and is currently selling all 50,000 for $500 each. Keller Company has approached Gamboa about buying 5,000 units for only $450 each. Gamboa has a normal variable cost of $380 per unit, including $50 per unit in direct labor. Gamboa could produce the special order on an

Loan Interest Rates Terms

See attached file for tables. Section I: Computational Problems 1. Big Sky Montana Corporation must install $1.875 million of new machinery in its bottling operation. It can obtain a bank loan for 100% of the purchase price or it can lease the machinery. [ Assume the following apply: 1. The machinery falls into the MA

Adjustable and Fixed Rate Mortgages

Consider the following scenario: John buys a house for $150,000 and takes out a five year adjustable rate mortgage with a beginning rate of 6%. He makes annual payments rather than monthly payments. Unfortunately for John, interest rates go up by 1% for each of the five years of his loan (Year 1 is 6%, Year 2 is 7%, Year

Financial Reporting and Theory

Please identify what accounting standard is the UK and US using at the moment. Detail describe what is the difference between principle based accounting standard and rules based accounting standard. What is the US current status/objectives on current convergence project between the FASB and the IASB. Critically assess how t