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Can the numbers lie? A management accountant discussion of fad-like innovations.

Question: "As managers we need to be wary of the fad-like innovations proposed by management accountants. We know if our company is in control if we earn at least the required rate of return on our investments. At the end of the day the numbers don't lie." Discuss the above statement and explain whether you think managemen

Conducting Finance Based Calculations

1. You are given the following information: Stockholders' equity $3.75 billion, price/ earnings ratio 3.5, common shares outstanding 50 million, and market/ book ratio 1.9. Calculate the price of a share of the company's common stock. 2. Raser Trucking has $12 billion in assets, and its tax rate is 40%. Its basic earning powe

Debt versus Equity Financing

Debt versus Equity Financing "Why do things have to be so complicated?" said Bob to Andrew, as he sat at his desk shuffling papers around. "I need you to come up with a convincing argument." Bob's company, Symonds Electronics, had embarked upon an expansion project, which had the potential of increasing sales by about 30% pe

Forecasted Sales and its Affect on Balance Sheet - EEM Inc

EEM, Inc. has the following balance sheet: EEM, Incorporated Balance Sheet as of 12/31/X0 Assets Liabilities and Equity Cash $ 1,000 Accounts payable $ 5,300 Accounts receivable 7,200 Bank note payable 3,200 Inventory 6,100 Long-term assets 4,200 Equity 10,000 $18,500 $18,500 It has estimate

Finance: Bond Valuation

An investor has two bonds in his portfolio that have a face value of $1000 and pay a 10% annual coupon. Bond L matures in 15 years, while bond S matures in 1 year. a. What will the value of each bond be if the going interest rate is 5%, 8%, and 12%? Assume that only one more interest payment is to be made on Bond S at its mat

Accounting/Finance Analysis

A fund manager states: "I refuse to buy any company that makes a voluntary accounting change, since it's certainly a case of management trying to hide bad news." Can you think of any alternative interpretation?


1. Presented below is information related to copyrights owned by Yaeger Corporation at December 31, 2004: Cost $3,600,000 Carrying amount 3,200,000 Expected future net cash flows 2,800,000

Case analysi of systematic or unsystematic

It has been a little over 1 year since the collapse of Lehman Brothers which was the first major event in the downturn of our stock market and economy. In the past year we have witnessed some fairly significant financial events ~ would you categorize these events as the result of systematic or unsystematic risk? Why? (at least

Finance Problem

Please help with the attached problem. Thank you. Stocks A and B have the following historical returns: Year Stock A's Returns, Stock B's Returns 2001 -18.00% -14.50% 2002 33.00 21.80 2003 15.00 30.50 2004 0.50 (7.60) 2005 27.00 26.30 a. Calculate the average rate of r

Business Finance: Stock, Tax, Interest

10. Mr. Frost controls proxies for 32,000 of the 60,000 outstanding shares of Express Frozen Foods, Inc. Mr. Cooke heads a dissident group that controls the remaining 28,000 shares. There are seven board members to be elected and cumulative voting rules apply. Frost does not understand cumulative voting and plans to cast 80,

Financial Problems

Nast Store has derived the following consumer credit scoring model after years of data collecting and model testing: Y = (0.20 x EMPLOYMT) + (0.4 x HOMEOWNER) + (0.3 x CARDS) Where: EMPLOYMT = 1 if employed full-time, 0.5 if employed part-time, and 0 if unemployed HOMEOWNER = 1 if homeowner, 0 otherwise CARDS = 1 if presentl

Lott Manufacturing: Quantity Discounts

Lott Manufacturing Inc. has been ordering parts for its production process in lots of 10,000 units. Each order costs the firm $50 to place, and holding costs per unit average $3. Lott uses 200,000 units every 250 days. Lott Manufacturing was recently approached by its supplier with a new quantity discount program. The supplie

Scenario Summary in Microsoft Excel

JumboMags makes an exceptional line of magnetized wheels that custom car builders use in kits. They provided you with the following information: Product: A13847 - Jumbo Mag Selling Price at $185.00/unit Variable Cost: $87.50 Fixed Cost: $250,000 Units Sold Last year: 10,800 JumboMags gave you the following po

Unit 5 - Statement of Cash Flows

4-5 paragraphs Details: Your friend Lucy slept through a class in which her professor explained the concepts of depreciation and amortization. Use the Library's Accounting links and/or dictionary sources and the Internet to learn about these concepts, and then write a 4-5 paragraph explanation of the concepts for Lucy. Be

Financial Aspects of Marketing Management

The group product manager for ointments at American Therapeutic Corporation was reviewing price and promotion alternatives for two products: Rash Away and Red Away. Both products were designed to reduce skin irritation, but Red Away was primarily a cosmetic treatment whereas Rash Away also included a compound that eliminated a

Corporate Finance

Practice Exercises: 1. What is the present value of the following cash-flow stream if the interest rate is 6 percent? Year Cash Flow 1 $200 2 $400 3 $300 2. The only capital investment required for a small project is investment in inventory. Profits this year were $10,000, and inventory increased from $4,000


Co A has a standard deviation of 42% per year and a beta of +.10. Co. B has a standard deviation of 31% a year and a beat of +.66. Which investment is safer for a diversified investor?


Co. A is about to pay a dividend of $3.15 per share. Its future EPS and dividends are expected to grow with inflation, which is forecasted at 3% per year. What is the company's stock price? The nominal cost of capital is 10%.

Break-Even Point for an Off-Broadway Theater

Letitia Green own a small, independent off-Broadway theater. Her theater is about to begin performing a new play titled "Franklin County Blues." Letitia has invested her own funds to get the play off the ground, and wants to know how many tickers need to be sold before the theater breaks even. Information about the play follow


You have estimated the following probability distributions of expected future returns for Stock X and Y: Stock X Probability Return Stock Y Probability Return 0.1 -10% 0.2 2% 0.2 10% 0.2 7

Operating Leverage for Pepsi and Coca-Cola

In its 2006 annual report, the coca-cola company reported sales of $24.09 billion for fiscal year 2006 and 23.10 billion for fiscal year 2005. The company also reported operating income of 6.31 billion, and $6.09 billion in 2005 and 2006, respectively. Meanwhile,Pepsi, reported sales of $35.14 billion in 2006 and $32.56 billion

Financial Concepts

Deflections, LLC, currently net leases its headquarters office building for $50,000 per month, and this lease has two years left to run. (Under a commercial fully net lease, the tenant pays for all maintenance, repairs, insurance and property taxes.) Deflections considers the rent to be less than the current market rate, but ex


See attachment 1 (chapter 5) Co. A is about to pay a dividend of $3.15 per share. Its future EPS and dividends are expected to grow with inflation, which is forecasted at 3% per year. What is the company's stock price? The nominal cost of capital is 10%. (Problem 17 page110) 2. (chapter 6) Calculate the IRR for the follow

Firm Performance: Ratios and Recommendations

In millions of dollars A B C D Sales $250 $10 $15 $25 Net Income after tax 3 0.5 2.25 3 Total Assets 15 7.5 15 24 Stockholders' equity 10 5.0 14 10 How can I get total asset turnover, the net profit margin


Journal Entries for each transaction During July 2009, Krogue, Inc., completed the following transactions. entry for each transaction. July 2 Received $320,000 for 80,000 shares of capital stock. 4 Purchased $90,000 of equipment, with 75% down and 25% on a note payable. 13 Purchased $250,000 of inventory, paying 40%