...THE LONDON MINERAL WATER COMPANY INCOME STATEMENT FOR MONDAY £ Revenues 420 This is the value of goods sold, i.e. all 350 bottles that you have sold even though some have not yet been paid for. The amount still to be paid – the Debtor of £60 – is included in the Balance Sheet. (Transaction 4) Less Cost of Goods Sold (175) This is the cost to you of the 350 bottles that you have sold during Monday. You bought them for £0.50 each. This is not the cost of all of the 500 bottles that you bought. The remaining 150 bottles that remain unsold at the end of Monday are included in the Balance Sheet as Inventory (£75) as you expect to sell them on Tuesday. Note that you still have to pay for 100 bottles and this Creditor of £50 is also included in the Balance Sheet. (Transactions 4 and 2) Gross Profit 245 The Gross Profit equals Sales minus Cost of Goods Sold Less Operating Expenses Ice (15) The cost incurred during the day (and paid in cash) (Transaction 5) Food (10) The cost incurred during the day (and paid in cash) (Transaction 5) Wages (75) The cost incurred during the day (and paid in cash) (Transaction 6) Depreciation (20) The depreciation charge represents Monday’s share of the wearing out of the ...
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...ACC00152 Business Finance Topic 3 Tutorial Answers 1. Widget Pty Ltd is analysing the prospect of purchasing an additional (and very specialised) widget-making machine, the XX1000. The XX1000 costs $150,000 installed and has an effective life of 10 years. The company will use the prime cost depreciation method for tax purposes and management expects it will be able to sell the machine at the end of its effective life for about $20,000. It is estimated that the additional machine will increase annual revenues by $200,000 and operating expenses will be around 80% of revenues. The expansion will require an additional initial investment of $5,000 in its stock of raw materials, which will be recovered at the end of the project. The company's tax rate is 30% and the required return is 12%. Prepare a schedule of the relevant cash flows generated by the new machine, calculate the NPV, and advise management as to whether they should invest the new machine. Depreciation: For an effective life of 10 years, the prime cost depreciation rate is 10%. Therefore: 150000 x 10% = $15000 depreciation expense per year. | Year 0 | Years 1-9 | Year 10 | Revenue | | $200 000 | $200 000 | Operating costs (200 000 x 80%) | | (160 000) | (160 000) | Depreciation | | (15 000) | (15 000) | Gain on sale of equipment* | | | 20 000 | EBIT | | 25 000 | 45 000 | Tax | | (7 500) | (13 500) | Incremental earnings | | 17 500 | 31 500 | Add back depreciation | | 15 000 | 15 000...
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...® a practical guide for business calculations ALASTAIR L. DAY Alastair Day has worked in the finance industry for more than 25 years in treasury and marketing functions and was formerly a director of a vendor leasing company specializing in the IT and technology industries. After rapid growth, the directors sold the enterprise to a public company and he established Systematic Finance plc as a consultancy specializing in: • financial modelling – review, design, build and audit • training in financial modelling, corporate finance, leasing and credit analysis on an in-house and public basis • finance and operating lease structuring as a consultant and lessor Alastair is author of a number of books including three published by FT Prentice Hall: Mastering Financial Modelling, Mastering Risk Modelling and The Financial Director’s Guide to Purchase Leasing. Alastair has a degree in Economics and German from London University together with an MBA and is an associate lecturer of finance with the Open University Business School. Excel a practical guide for business calculations Tools enabling managers to carry out financial calculations have evolved in the last 20 years from tables through calculators to programs on PCs and personal organisers. Today, the majority of those in finance have Excel on their desks and increasingly on their laptops or pocket computers. Mastering Financial Mathematics in Microsoft ® Excel provides a comprehensive set of tools and ...
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...a 304 Lehman College City University of New York Department of Health Sciences HAS 304: Health Care Finance Institutions Fall, 2014 Instructor: Chul-Young Roh, Ph.D., MPA Office: 422C Gillet Hall E-mail: chulyoung.roh@lehman.cuny.edu Phone: 718-960-8679 Office Hours: Tuesday and Thursday at 10am-noon Required Text: Required Text: Gapenski, Louis (2012), Fundamental of Healthcare Finance, 2nd ed., Chicago, IL, AUPHA, ISBN- 978-1-56793-475-5 Course Goal This course focuses on financial and managerial accounting, basic financial management concepts, long-term financing, capital investment decisions, and related topics. Course Purpose Today’s health care environment requires managers who are trained to identify finance problems and who have the skills to solve these problems. The purpose of this course is to teach students the fundamental concepts of healthcare finance, with an emphasis on provider organizations, in such a way that they are better prepared for managerial positions in public health organizations. Competencies and Learning Objectives 1. Apply principles of accounting and financial management in public health and health services organizations 2. Demonstrate written and oral skills for communicating health policy and management issues...
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...Fundamentals of Corporate Finance by Robert Parrino and David S. Kidwell John Wiley & Sons, Inc.. (c) 2009. Copying Prohibited. Reprinted for Krishna Chebolu, Bank of America Chebolu.Krishna@bankofamerica.com Reprinted with permission as a subscription benefit of Books24x7, http://www.books24x7.com/ All rights reserved. Reproduction and/or distribution in whole or in part in electronic,paper or other forms without written permission is prohibited. i Table of Contents Chapter 20: Options and Corporate Finance................................................................................1 Overview................................................................................................................................1 20.1 Financial Options...........................................................................................................2 Call Options ......................................................................................................................2 Put Options......................................................................................................................5 American, European, and Bermudan Options.................................................................6 More on the Shapes of Option Payoff Functions.............................................................7 20.2 Option Valuation............................................................................................................8 Limits on Option...
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...OUTLINE OF MBA 520 Fall Semester 2008 Business Finance Instructor: Grant McQueen Teaching Assistants: Mark Cherrington & Office: 636 TNRB Christian Hsieh Phone: 422-3017 Office: 324 TNRB Office Hours: MW 2:00 - 3:00 p.m. Phone: 422-6835 e-mail: Office hours: forthcoming Home page: Course Description and Objectives This course introduces basic financial concepts all business managers should understand regardless of functional specialization. Topics include financial analysis and planning, time value of money, valuation, capital budgeting, risk/return trade-offs, cost of capital, and capital structure. The pedagogical approach used is a mixture of lectures and case examples. Cases are often used as a vehicle for discussing the complexities of real-world financial problems. To benefit most from this method of teaching, you will want to come prepared to discuss the cases in detail. By the end of the semester, students should be able to: (1) describe essential characteristics of the finance profession and institutions, (2) be conversant in basic financial jargon, (3) value paper assets (stocks and bonds) and tangible assets (capital budgeting) using the tools of time value of money, including NPV and IRR, (4) explain the various sources of financing, their associated costs, and their advantages and disadvantages, (5) calculate and use financial statements and ratios to analyze a business and create and use pro forma statements for planning...
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...edu/numeracy/vol7/iss1/art8 Authors retain copyright of their material under a Creative Commons Non-Commercial Attribution 4.0 License. Review of Financial Intelligence for Entrepreneurs: What You Really Need to Know about the Numbers by Karen Berman and Joe Knight, with John Case. Abstract Berman, Karen and Knight, Joe, with John Case. Financial Intelligence for Entrepreneurs: What You Really Need to Know about the Numbers, (Boston MA: Harvard Business Press, 2008). 285 pp. ISBN 978-1-4221-1915-0. From “The art of finance (and why it matters)” (Part One) through “Creating a financially intelligent company” (Part Eight), Financial Intelligence for Entrepreneurs is an engaging explanation and appreciation of financial statements and financial ratios. Short, easily digested chapters; just-in-time boxes to introduce terminology; easy, direct, in-text calculations from bare-bones, hypothetical financial statements to illustrate concepts; a 44-page appendix of crafted exercises on the income statement, balance sheet, cash-flow statement, and financial ratios from two public companies for deeper understanding; a detailed 19-page index for quick, after-you’ve-read-it navigation – all make for an efficient learning opportunity for readers who want a...
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...Kirt C. Butler, Solutions for Multinational Finance, 4th edition Chapter 6 Currency Options and Options Markets Answers to Conceptual Questions 6.1 What is the difference between a call option and a put option? A call option is an option to buy the underlying asset at a predetermined exercise price. A put option is an option to sell the underlying asset at the exercise price. 6.2 What are the differences between exchange-traded and over-the-counter currency options? Exchange-traded currency options are standardized as to currencies, maturity, exercise prices, and settlement procedures. Over-the-counter options traded by commercial and investment banks can be tailored to fit the needs of the client. 6.3 In what sense is a currency call option also a currency put option? Because an option to buy one currency is simultaneously an option to sell another currency, currency options are both a call (on one currency) and a put (on the other currency). 6.4 In what sense is a currency forward contract a combination of a put and a call? A currency forward contract to buy currency f at a forward price of FTd/f at time T can be replicated by purchasing a European call option on currency f with the same expiration date and an exercise price Kd/f = FTd/f and simultaneously selling a put option at the same exercise price and maturity date. Conversely, a short forward contract on currency f is a combination of a written call on f and a purchased put on f with...
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...and the lease payments are deemed to be material. AASB 117 describes the risks and rewards of ownership as follows: Risks include the possibilities of losses from idle capacity or technological obsolescence and of variations in return because of changing economic conditions. Rewards may be represented by the expectation of profitable operation over the asset’s economic life and of gain from appreciation in value or realisation of a residual value. AASB 117 dedicates a number of paragraphs (paragraphs 10 to 12) to assist in determining whether a lease is a finance lease or an operating lease. A finance lease is to be capitalised. These paragraphs state: 10. Whether a lease is a finance lease or an operating lease depends on the substance of the transaction rather than the form of the contract. Examples of situations that individually or in combination would normally lead to a lease being classified as a finance lease are: (a) the lease transfers ownership of the asset to the lessee by the end of the lease term; (b) the lessee has the option to purchase the asset at a price that is expected to be sufficiently lower than the fair value at the date the option becomes exercisable for it to be reasonably certain, at the inception of the lease, that the option will be exercised; (c) the lease term is for the major part of the...
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...FIN200 Corporate Finance (2nd Term 2012-2013) Solution for Corporate Finance, Ross, Westerfield, and Jaffe, 9th edition CHAPTER 20 ISSUING SECURITIES TO THE PUBLIC Answers to Concepts Review and Critical Thinking Questions 1. A company’s internally generated cash flow provides a source of equity financing. For a profitable company, outside equity may never be needed. Debt issues are larger because large companies have the greatest access to public debt markets (small companies tend to borrow more from private lenders). Equity issuers are frequently small companies going public; such issues are often quite small. Additionally, to maintain a debt-equity ratio, a company must issue new bonds when the current bonds mature. From the previous question, economies of scale are part of the answer. Beyond this, debt issues are simply easier and less risky to sell from an investment bank’s perspective. The two main reasons are that very large amounts of debt securities can be sold to a relatively small number of buyers, particularly large institutional buyers such as pension funds and insurance companies, and debt securities are much easier to price. They are riskier and harder to market from an investment bank’s perspective. Yields on comparable bonds can usually be readily observed, so pricing a bond issue accurately is much less difficult. It is clear that the stock was sold too cheaply, so Eyetech had reason to be unhappy. No, but, in fairness, pricing the stock in such a situation...
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...Description This is an advanced course in the financial management of the firm. Since the participants are assumed to be knowledgeable about the topics found in the first financial management course, the emphasis is placed on fully understanding the principles underlying a sound financial decision in the modern corporation. The course goal is to apply relevant knowledge, skills and exercise professional judgment as expected of a senior financial executive or advisor, in taking or recommending decisions relating to the financial management of an organization. The approach will be a combination of lecture and discussion, always with a focus on good managerial financial decision-making. Prerequisites: Financial management or equivalent. Topics Covered: 1. The role and responsibility of the senior financial executive 2. Evaluate potential investment decisions and strategic consequences 3. Acquisitions and mergers 4.Corporate re-organization strategies. 5.Advanced treasury and risk management techniques. 6.Financial management of multinationals. 7. Emerging issues in finance and financial management Lecture Format: Lecture/Discussion. Technical Requirements In addition to a confident level of computer and Internet literacy, certain minimum technical requirement must be met to enable a successful learning experience. Technical requirements include but are not limited to: Hardware • A Pentium processor or equivalent Mac system;...
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... 5. I can swiftly identify daily business transactions and provide operational solutions and direct subordinates in daily routine works 6. Accountable in my works and other employees can depend 7. Have the ability to work under pressure 8. Can manage stress when there is pressure 9. Can lead the Finance team in terms of daily works, Trainings and advice required to complete daily transections 10. I am friendly 11. I work in a structured and well organised style and minimum supervision required from the superiors. 12. Understand most of the financial terms, Principals and procedures and code of ethics. 13. Have intermediate level knowledge and clear understanding of the IFRS and GAAP Accounting Standards 14. Creative thinking. Weakness 1. I get upset if the tasks assigned has not been completed in the given time frame 2. When I assign a work to subordinate if they act negative I get angry 3. Find difficult to give time for personal life (Family) 4. Need additional training and knowledge of the latest accounting software broadly used to Opportunities 1. Lot of High profile companies hiring Finance Managers locally and overseas 2. Opportunity to work as CFO 3. Various short term and long term online courses available to develop skill and profession 4. CFO, Marketing Director and HR Director Post occupied by foreigners. The Company MD encourage locals to take over these positions. Threats 1. Challenging...
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...Unit Summary : BSB119 Global Business In addition to the Official Unit outline found on QUT Virtual this document will provide specific information about the unit as it will run this semester. Semester | Semester One, 2016 | Unit CoordinatorLecturer | Name: Associate Professor Rumintha WickramasekeraPhone: 3138 1560Room: GP Z1046Email: bsb119@qut.edu.au | | Name: Dr Alvin TanPhone: 3138 1257Room: GP Z 1051Email: ac.tan@qut.edu.au | Unit Administrator | Name: Ms. Jan HeffernanPhone: 31381850Room: GP Z1018Email: j.heffernan@qut.edu.au bsb119@qut.edu.au | Academic queries | Email: bsb119etutor@qut.edu.au | Administrative queries | Email: bsb119@qut.edu.au | Tutor contact details | Available in Contact Us section of Blackboard | Lecture Schedule Date: Week Beginning | Lecture Topic | Readings from textbook | Week 129 February | Introduction * Overview of Australian Business Environment * Globalisation and interdependencies * Drivers of internationalisation | Ch 1(pp19 to 28 & 43 to 63) | Week 27 March | Introduction to IB Theories and Databases * Models/theories of internationalisation * Country analysis * EIU, GMID Databases | Ch 2 (pp90-108) | Week 314 March | Business environments – Socio-economic characteristics * Country profile and macro-segmentation * Levels of economic and social development * Determinants of market potential | Ch 7 | Week 421 March | Business environments – cultural diversity...
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...Challenges Facing the Finance Industry This paper will explore three problems facing the finance industry. Those problems include cybersecurity, compliance with regulation, and risk management. Three solutions will also be addressed later in this paper. 1 When one thinks about the finance industry, banks, credit agencies, insurance companies, and equity firms may come to mind. Over the years financial institutions have not been up to par. With the financial crisis that happened in 2008, the world is still recovering and paying high taxes for the amount of debt that it acquired. As a result of that crisis, the financial industry faces challenges that include cybersecurity, complying with regulation, and risk management. Although the industry faces these challenges, there are solutions that can make things operate smoother. One of the finance industries biggest challenge this year is cybersecurity. According to Hewitt, “The potential hacking of sensitive customer information is a top threat facing the financial industry in 2014.” Technology is vastly changing, and more people are beginning to use different softwares to handle the financial side of the business. With technology evolving, hackers are getting more experienced, and cyber-attacks are beginning to occur more frequently and more wide spread than they have been in the past. According to Rodriguez, “As the cost of technology decreases, the barriers to entry for cybercrime drop, making it easier...
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...Introduction Value Added Tax is one of the most important sources of tax revenues in Bangladesh. Since its introduction in 1991, VAT is one of the most effective and efficient tools in resource mobilization. Value Added Tax has emerged as a principal instrument of taxing domestic consumption world wide during last four decades. It is now in operation in more than 130 Countries. Value added tax is a primary source of tax revenue in many European and other developed countries. Its importance is also increasing in the developing countries because of its effectiveness in mobilizing local resources. VAT proves to be an efficient tool for revenue collection; its performance, therefore, has direct impact on fiscal mobilization, macroeconomic stability, and development. The basic advantages of Value Added Tax can be stated as its neutrality, tranparency, certainty and self policing mechanism. Customs is an Authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods including animals, personal effects and hazardous items in and out of a country. Depending on local legislation and regulations, the import and export of some goods may be restricted or forbidden, and the customs agency enforces these rules. Customs duty synonyms of tariff and involves a tax on commodities entering and leaving the country. In Bangladesh the levy and chargeability of customs duty are governed by the Customs Act 1969. Objective...
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