Tell the story of a time that you faced failure in your life and learned something important from it. In your response, be sure to explain how you failed and the ways in which this failure led to an unusual outcome.

/in /by

Business report

Responding to a Narrative Prompt

Type your name and the date at the top of this page. Type or paste your draft into this document. Be sure that your draft is double-spaced and in 12 point, Times New Roman font.

Read the prompt below. Decide how you want to approach the topic. Then write a narrative response. You have 30 minutes to complete this assignment. Your assignment will be graded based on the Narrative Prompt Grading Rubric. The rubric can be found in your Unit Resources.

Prompt

Nobody wants to be considered a “failure.” The word suggests inability and incompetence, something that our culture frowns on. But sometimes a failure has unusual outcomes. For example, a high school student fails a history test on World War II. As a result, he has to retake the test. In doing so, he learns the importance of taking responsibility and studying ahead of time. In reviewing the material for the test, he might also be reminded of certain ideas that World War II exemplified—intolerance, passivity, and personal conscience.

Assignment:

Tell the story of a time that you faced failure in your life and learned something important from it. In your response, be sure to explain how you failed and the ways in which this failure led to an unusual outcome.

What are the advantages and disadvantages of paying cash dividends compared to no cash payments? What are the advantages and disadvantages of share buy backs compared to no cash payments? Which alternative (cash dividend, buybacks, no dividends or other policies) would be best for Berkshire Hathaway shareholders?

/in /by

Berkshire Hathaway: Dividend policy paradigm

1. What are the advantages and disadvantages of paying cash dividends compared to no cash payments?
2. What are the advantages and disadvantages of share buy backs compared to no cash payments?
3. Which alternative (cash dividend, buybacks, no dividends or other policies) would be best for Berkshire Hathaway shareholders?
4. Which alternative would you recommend and why?

Applying theoretical concepts and strategies as derived from scholarly journals and other sources to your practical personal finance issue, develop and critically evaluate your action plan for the future, in relation to achieving your personal finance goal/s identified.

/in /by

Read scholarly articles published in scholarly refereed journals, and explore Bloomberg and other sources, related to your chosen personal financial issue.

Applying theoretical concepts and strategies as derived from scholarly journals and other sources to your practical personal finance issue, develop and critically evaluate your action plan for the future, in relation to achieving your personal finance goal/s identified.

Tell the story of a time that you faced failure in your life and learned something important from it. In your response, be sure to explain how you failed and the ways in which this failure led to an unusual outcome.

/in /by

Business report

Responding to a Narrative Prompt

Type your name and the date at the top of this page. Type or paste your draft into this document. Be sure that your draft is double-spaced and in 12 point, Times New Roman font. Save the file as AML_S2_09.04_Critical Skills Practice_FirstInitial_LastName.docx.

Example: AML_S2_09.04_Critical Skills Practice_M_Smith.docx

Total score: ____ of 50 points

Read the prompt below. Decide how you want to approach the topic. Then write a narrative response. You have 30 minutes to complete this assignment. Your assignment will be graded based on the Narrative Prompt Grading Rubric. The rubric can be found in your Unit Resources.

Prompt

Nobody wants to be considered a “failure.” The word suggests inability and incompetence, something that our culture frowns on. But sometimes a failure has unusual outcomes. For example, a high school student fails a history test on World War II. As a result, he has to retake the test. In doing so, he learns the importance of taking responsibility and studying ahead of time. In reviewing the material for the test, he might also be reminded of certain ideas that World War II exemplified—intolerance, passivity, and personal conscience.

Assignment:

Tell the story of a time that you faced failure in your life and learned something important from it. In your response, be sure to explain how you failed and the ways in which this failure led to an unusual outcome.

An annuity is defined as a series of payments of a fixed amount for a specific number of periods. Thus, $100 a year for 10 years is an annuity, but $100 in Year 1, $200 in Year 2, and $400 in Years 3 through 10 does not constitute an annuity. However, the entire series does contain an annuity. Is this statement true or false?

/in /by

Principle of Finance

Questions (4-1)

(4-2)What is an opportunity cost rate? How is this rate used in discounted cash flow analysis, and where is it shown on a time line? Is the opportunity rate a single number that is used to evaluate all potential investments?

 

(4-3)An annuity is defined as a series of payments of a fixed amount for a specific number of periods. Thus, $100 a year for 10 years is an annuity, but $100 in Year 1, $200 in Year 2, and $400 in Years 3 through 10 does not constitute an annuity. However, the entire series does contain an annuity. Is this statement true or false?

 

(4-4)If a firm’s earnings per share grew from $1 to $2 over a 10-year period, the total growth would be 100%, but the annual growth rate would be less than 10%. True or false? Explain.

 

(4-5)Would you rather have a savings account that pays 5% interest compounded semiannually or one that pays 5% interest compounded daily? Explain.

 

Questions (5-1)

(5-2) “Short-term interest rates are more volatile than long-term interest rates, so short-term bond prices are more sensitive to interest rate changes than are long-term bond prices.” Is this statement true or false? Explain.

 

(5-3) The rate of return on a bond held to its maturity date is called the bond’s yield to maturity. If interest rates in the economy rise after a bond has been issued, what will happen to the bond’s price and to its YTM? Does the length of time to maturity affect the extent to which a given change in interest rates will affect the bond’s price? Why or why not?

 

(5-4) If you buy a callable bond and interest rates decline, will the value of your bond rise by as much as it would have risen if the bond had not been callable? Explain.

 

(5-5) A sinking fund can be set up in one of two ways. Discuss the advantages and disadvantages of each procedure from the viewpoint of both the firm and its bondholders.

What similar problems of the availability of cash and credit might new digital currencies such at Bitcoin solve? If money and financial instruments evolve, what kind of money is best for our society going forward?

/in /by

FIN WK 1

First, read the case Money and Credit on the American Frontier.

Additional readings (not required, but recommended by the case study’s author)

Michener, R. (2011, January 13). Money in the American colonies. Retrieved from http://eh.net/encyclopedia/money-in-the-american-colonies/
Schweikart, L. (2001, January 1). The non-existent frontier bank robbery. Retrieved from https://fee.org/articles/the-non-existent-frontier-bank-robbery/
Second, answer the questions below. In your initial response to the topic you have to answer all questions:

People often say that the gold standard is unworkable because there is not enough gold in circulation to back up the value of all the cash assets now stored in banks. Did it matter to frontier stores that the American dollar was backed by gold? Was there a backstop holding the financial system together? Considering that local stores and home-grown banks can organically develop and create their own forms of credit, what good is a national currency, or attempts to connect financial markets beyond the immediate area?

Like credit at a frontier store, Bitcoin has no physical presence, but is merely a string of written characters that represent an account balance. What similar problems of the availability of cash and credit might new digital currencies such at Bitcoin solve? If money and financial instruments evolve, what kind of money is best for our society going forward?

Reflection – the students also should include a paragraph in the initial response in their own words, using finance terminology, reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace or in everyday life.

Compare the portfolio weights for both the optimal risky portfolio and the optimal complete portfolio using the portfolio optimisation procedure in the Excel sheet for the three methods to forecast expected returns, a), historical, b) static CAPM, and c) Fama-French 3 factor.

/in /by

Analytical Research Report on a Portfolio Management Problem

On page 7.2 of the Excel sheet you should be able to observe the mean returns from the historical data, the standard deviations, correlations and the covariances. Undertake the following:

• Using the historical mean as the expected return, use the portfolio optimisation procedure in the Excel sheet to determine the portfolio weights of the optimal risky portfolio and the optimal complete portfolio. Select your own estimate of risk aversion for the individual stating what would happen if risk aversion changes (either up or down) from your own initial estimate. (You are given the chance to select a level of risk aversion, in part, to ensure you have flexibility over the diagram demonstrating the optimal complete portfolio and optimal risky portfolio.)

• Imagine you are doing security analysis on some of the stocks, what happens when you change the expected return? Select a security (or securities) of your choice and analyse the results.

• Compare the portfolio weights for both the optimal risky portfolio and the optimal complete portfolio using the portfolio optimisation procedure in the Excel sheet for the three methods to forecast expected returns, a), historical, b) static CAPM, and c) Fama-French 3 factor. Offer an interpretation of your findings.

When your analysis is complete write up your results as if you were presenting them to your client. Use graphs and tables. (You do not need to present all the results. Just select the ones that seem the most important to you and justify the reasons why you have chosen those particular results.) Make clear the weaknesses and strengths (referring to academic and professional papers where appropriate) of your analysis and recommend a course of action for your client.

Based on the cash flow shown over 10 years for three projects, which should be selected using the concept of IRR and Delta IRR? For machines U and V, details are provided. What will be the Delta IRR and which machine should be selected?

/in /by

Finance

Based on the cash flow shown over 10 years for three projects, which should be selected using the concept of IRR and Delta IRR?

MARR 14%

Year Project P Project Q Project R
0 $ (29,200.00) $(44,400.00) $(67,800.00)
1 $ 6,200.00 $ 8,825.00 $ 13,825.00
2 $ 8,200.00 $ 10,825.00 $ 16,825.00
3 $ 10,200.00 $ 12,825.00 $ 18,825.00
4 $ 12,200.00 $ 14,825.00 $ 20,825.00
5 $ (31,120.00) $ 11,825.00 $(24,815.00)
6 $ 12,504.00 $ (1,244.44) $ 14,825.00
7 $ 12,504.00 $ 6,618.88 $ 16,825.00
8 $ 12,504.00 $ 7,030.77 $ 18,825.00
9 $ 12,504.00 $ 7,483.84 $ 20,825.00
10 $ 12,504.00 $ 7,982.23 $ 22,825.00

Flag question: Question 2
Question 210 pts
The net cash flows for 4 machines are as shown. Match the Delta IRR with the correct values.

Year Project A Project B Project C Project D
0 $ (45,500) $ (52,900) $ (70,500) $ (90,000)
1 $ 7,200 $ 14,325 $ 8,000 $ 14,200
2 $ 9,200 $ 12,325 $ 10,000 $ 24,200
3 $ 11,200 $ 15,325 $ 12,000 $ 24,200
4 $ 13,200 $ 18,325 $ 16,325 $ 24,200
5 $ 15,200 $ 20,325 $ 18,325 $ 24,200
6 $ 17,200 $ 22,325 $ 18,325 $ 24,200
7 $ 13,325 $ 8,119 $ 21,198 $ 24,200
8 $ 15,325 $ 8,531 $ 25,301 $ 24,200
9 $ 17,325 $ 8,984 $ 29,404 $ 18,325
10 $ 19,325 $ 9,482 $ 33,507 $ 20,325

Flag question: Question 3
Question 310 pts
For machines U and V, details are provided. What will be the Delta IRR and which machine should be selected?

Machine U Machine V
Initial cost $320,000 $410,000
Life in years 5 6
Inflation (for costs and benefits) 2% p. y.
MARR 7% p. y. c. y.
Project life 12 years
Salvage value of machine today $44,800 $57,400
Machine market value with 2 years of use $153,600
First year estimated costs $39,500 $53,800
First year estimated benefits $113,900 $128,435

Flag question: Question 4
Question 410 pts
For Machines X and Y shown, what is the difference between the EUAW for the HICP and the LICP?

Machine X Machine Y
Initial cost $571,000 $933,000
Life 4 6
Inflation (for costs and benefit increase) 3.5% p. y.
MARR 8% p. y. c. y.
Project life 14 years
First year estimated costs $199,850 $363,870
First year estimated benefits $411,120 $606,450
Salvage value of machine today $143,500 $172,400
Market value of machine today with 2 years of use $256,950 $419,850

Flag question: Question 5
Question 510 pts
The City of Omniville has two options for a viaduct. One is a permanent cement canal and the other a cast iron (CI) pipe. If details for the options are as shown, at what rate of interest should the city be indifferent to either choice?

Cement Canal CI PIPE
Initial cost ($3,000,000) ($1,000,000)
Life Perpetual 15 years
Annual maintenance cost $250,000 $350,000
Salvage $0 $50,000
Initial Rate 5.0% p. y.

Flag question: Question 6
Question 610 pts
Data for two machines P and Q are as shown below. At what MARR will both machines be equally attractive for installation?

Machine P Machine Q
Initial cost $125,000 $275,000
Life in years 4 6
Inflation per year (for all costs) 2.00%
Benefit increase per year 4.50%
MARR per year compounded yearly 12.00%
Project life in years 12
First year estimated costs $33,750 $63,250
First year estimated benefits $65,000 $112,750
Salvage value of machine (% of initial cost) 12.00% 8.00%

Flag question: Question 7
Question 710 pts
Data for two machines are shown. Also, four graphs of NPW for the two machines is shown. Which graph represents the data shown below? Quiz 7-7(1).pptx

Machine P Machine Q
Initial cost $105,000 $155,000
Life in years 4 6
Inflation per year (for all costs) 2.00%
Benefit increase per year 4.50%
MARR per year compounded yearly 12.00%
Project life in years 12
First year estimated costs $28,350 $35,650
First year estimated benefits $54,600 $63,550
Salvage value of machine (% of initial cost) 12.00% 8.00%

Flag question: Question 8
Question 810 pts
Data for 3 machines are given. For the given MARR, which machine will have the highest EUAW and hence be selected for purchase?

MARR 8.0%

Year Project J Project K Project L
0 $ (101,500) $ (117,435) $ (153,612)
1 $ 6,950 $ 35,850 $ 64,950
2 $ 6,950 $ 35,850 $ 42,950
3 $ 6,950 $ 32,450 $ 52,950
4 $ 6,950 $ 31,950 $ 42,950
5 $ 32,950 $ 31,950 $ 6,950
6 $ 51,950 $ 24,950 $ (13,900)
7 $ 51,950 $ (49,900)
8 $ 51,950 $ 16,350
9 $ 51,950
10 $(103,900.00

What is financial statement analysis? Why is financial statement analysis an important area of study? What is learned from the process of financial statement analysis? Discuss the Biblical implications of reliable and representationally faithful financial statements.

/in /by

Discussion post

Create a discussion thread that addresses the following areas:

What is financial statement analysis?
Why is financial statement analysis an important area of study?
What is learned from the process of financial statement analysis?
Discuss the Biblical implications of reliable and representationally faithful financial statements.

What are the pros and cons of Carter’s as an acquisition target for a private equity firm? Is it an opportunity that you would pursue if you worked at Berkshire?

/in /by

LBO and Carter

1. What are the pros and cons of Carter’s as an acquisition target for a private equity firm? Is it an opportunity that you would pursue if you worked at Berkshire?

2. Attached find an LBO model template. Do the following:

  • Set your excel to iterate calculations (Options > Formulas > Tick the Iterate Calculations box)
  • Input summary projections for Carter’s, as per the case (Revenues, EBIT, D&A, Change in Working Capital, and Capital Expenditures in rows 6-16)
  • Input a financing structure, using Goldman Sachs’ proposed staple financing in the case (assume that only $17.5 million of the Revolver is drawn down at closing) and related interest costs (cells F53, F54, and F55 – back into the implied multiples of debt/EBITDA based on the absolute numbers provided in the case)
  • Input a purchase price (T5)
  • Input an exit multiple (cell P33)
  • Through trial and error, find a purchase price that leads to an IRR of 25% assuming an exit in 2005 (see row 42)
  • Post your implied purchase price and discuss your willingness to buy Carter’s at this level.