Premium Essay

Fi 515

In: Business and Management

Submitted By Silkee86
Words 3145
Pages 13
1 | On its 1999 balance sheet, Sherman Books showed a balance of retained earnings equal to $510 million. On its 2000 balance sheet, the balance of retained earnings was also equal to $510 million. Which of the following statements is most correct? Show your calculations. | | | | | | | | | | | | | | a. The company must have had net income equal to zero in 2000. | | | | | | | | | | | | | | b. The company had a profit in 2000 but did not pay a dividend in 2000. | | | | | | | | | | | | | | c. the company’s net income in 2000 was $200 million. | | | | | | | | | | | | | | d. If the company lost money in 2000, they must have paid a dividend. | | | | | | | | | | | | | | e. None of the statements above is correct. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Which of the following statements is most correct and explain why? | | | | | | | | | | | | | | | | | | | | | | | | | | | | a. Indexing tax brackets reduces the extent of "bracket creep." | | | | | | | | | | | | | 2 | b. Bonds issued by a municipality such as the city of Miami would carry a lower interest rate than bonds with the same risk and maturity issued by a private corporation such as Florida Power & Light. | | | | | | | | | | | | | | c. Our federal tax laws tend to encourage corporations to finance with debt rather than with equity securities. | | | | | | | | | | | | | | d. Our federal tax laws encourage the managers of corporations with surplus cash to invest it in stocks rather than in bonds. However, other factors may offset tax considerations. | | | | | | | | | | | | | | e. All of the above | | | | | | | | | | | | | | | | | | | | |...

Similar Documents

Premium Essay

Fi 515

...Homework week one Mini Case pg 45 Why is corporate finance important to all managers? Corporate finance is the field of finance dealing with financial decisions that business enterprises make and the tools and analysis used to make these decisions. Corporate finance is important to all managers because it help managers learn the necessary skills select the corporate strategies and individual projects that add value to their company. It`s also tool for managers to know how to find funding for their company and what is the best strategy they need to adopt to do so. b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form. The three main forms of business organization are 1- Sole proprietorships that has 3 advantages 1. It is easily and inexpensively formed 2. It is subject to few government regulations 3. The business pays no corporate income taxes. The proprietorship also has three important limitations: 1. It is difficult for a proprietorship to obtain large sums of capital 2. The proprietor has unlimited personal liability for the business’s debts 3. The life of a business organized as a proprietorship is limited to the life of the individual who created it. 2- Partnerships with the advantage of its low cost and ease of formation The disadvantages are: 1. Unlimited liability 2. Limited life of the organization 3. Difficulty of......

Words: 2500 - Pages: 10

Premium Essay

Fi 515 Exam

...1. (TCO A) Which of the following statements is CORRECT? (Points : 10)  One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability. It is generally easier to transfer one’s ownership interest in a partnership than in a corporation. One of the advantages of the corporate form of organization is that it avoids double taxation. One of the advantages of a corporation from a social standpoint is that every stockholder has equal voting rights, i.e., “one person, one vote.” Corporations of all types are subject to the corporate income tax. 2. (TCO G) Which of the following statements is CORRECT? (Points : 10) In the statement of cash flows, a decrease in accounts receivable is reported as a use of cash. Dividends do not show up in the statement of cash flows because dividends are considered to be a financing activity, not an operating activity.  In the statement of cash flows, a decrease in accounts payable is reported as a use of cash. In the statement of cash flows, depreciation charges are reported as a use of cash. In the statement of cash flows, a decrease in inventories is reported as a use of cash. 3. (TCO G) An investor is considering starting a new business. The company would require $475,000 of assets, and it would be financed entirely with common stock. The investor will go forward only if she thinks the firm can......

Words: 965 - Pages: 4

Free Essay


...1. What is the net cost of the spectrometer-Year 0 net cash flow? Basic Price-$70,000 Modification-$15,000 Increase Working Capital-$4,000 Total-$89,000=(89,000)-Outflow 2. Net operating cash flows Years 1, 2, 3. Total amount of depreciation-$85,000 Year 1= 33.33%*85,000=$28,330.50 Year 2=44.45%*85,000=$37,782.50 Year 3=14.81%*85,000=$12,588.50 Total years 1, 2, 3=$78,701.50 Book value=$6,298.50 Tax rate=40% Savings=$25,000 Year1=$25,000-$28,330.50=-$3,330.50 Year2=$25,000-$37,782.50=-$12,782.50 Year3=$25,000-$12,588.50=$12,411.50 Year1 Tax Credit=40%*-$3,330.50=$1,300 Year2 Tax Credit=40%*-$12,782.50=$5,113 Year3 Tax Credit=40%*$12,411.50=-$4,964.60 Year1 Operating Cash Flow=$25,000+$1,300=$26,300 Year2 Operating Cash Flow=$25,000+$5,113=$30,113 Year3 Operating Cash Flow=$25,000+(-$4,964.60)=$20,035 3. Additional non-operating cash flow Sale price after 3 years=$30,000 Book value=$6,298.50 Gain=$30,000-$6,298.50=$23,701.50 Tax=40%*$23,701.50=$9,480.60 After tax Cash Flow=$30,000-$9480.60=$20,519.40 Working Capital=$4,000 Non-Operating Cash Flow=$20,519.40+$4,000=$24,519.40 4. If cost of capital is 10%, should spectrometer be purchased? Discount rate = %10 Year 0= -89,000*1=-89,000 Year 1= 26,300*.909091=23,909 Year 2=30,113*.826446=24,887 Year 3= 44,514*.751315=33,474 Total=-6,730=Negative NPV-do not purchase...

Words: 293 - Pages: 2

Premium Essay

Fi 515 Mini Case

...FI 515 Financial Management Mini Case a. Why is corporate finance important to all managers? Corporate finance is important to all managers because they to know the company’s financial state before they can make decision. For example one important fact they will find useful is the company’s ROI. Knowing this figure can help the managers determine how much they spend and what return with it generate. Other important factors are debt and equity. Managers should understand issuing debt would reduce the company’s ROI and understanding that may be other options like issuing equity. b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form. Proprietorship * Advantages: * It is easily and inexpensively. * It is subject to few government regulation * It is subject to few government regulations. * Its income is not subject to corporate taxation but is taxed as part of the proprietorship to obtain the capital needed for growth. * Disadvantages: * It may be difficult for a proprietorship to obtain the capital needed for growth * Proprietor has unlimited personal liability for the business’s debts. * The life of the proprietorship is limited to the life of its founder. Partnership * Advantages: * Partnerships are relatively easy to establish; however time should be...

Words: 1160 - Pages: 5

Premium Essay

Fi 515 Wk 7 Project

...(13-10) a. | | | (All amouts in million except per unit values) | 2010 | 2011 | Operating Current Assets (cash+ AR + Inv) | $164.3 | $174.20 | Less: Operating Current Liab (A/P + Accruals) | (37.10) | (39.30) | = Net Operating Work Cap | $127.20 | $134.90 | Add: Net Plant and Equipment | $375.0 | $397.50 | = Total Net Operating Capital | $502.20 | $532.40 | Investment in Operating Capital | | $30.20 | Earnings Before Interest and Taxes | $102.5 | $108.65 | x (1 - Tax Rate) | 60% | 60% | NOPAT | $61.50 | $65.19 | Less: Investment in Operating Capital | | $30.20 | | | | Free Cash Flow ($ millions) | | $34.96 | b) | | | FCFN | = | FCFN-1 x (1 + g) | FCF2012 | = | FCF2011 x (1 + g) | g | = | 6% | WACC | | 11% | Value of FirmLAST YEAR | = | FCFLAST YEAR (1 + g) | | | WACC - g | Horizon Value, V0-2011 | = | FCF2011 x (1 + g) | | | WACC - g | | = | $34.96 x (1+ 0.6) | | | 11% - 6% | Horizon Value in 2011 | = | $741.152 | c) | | | Add: Free Cash Flow in 2011 | | $34.96 | Value of operations in 2011 ($741.152+$34.96) | | $776.11 | PVIF@11% | | 0.9009 | | | | PV of Horizon Value in 2010 (0.901 x $776.11), $ millions | = | $699.20 | | | | d) | | | | Non-operating Assets = Marketable Securities + Investment in Other Business | Marketable Securities | | $49.9 | | Investment in Other Business | | 0 | | Total Intrinsic Value = Value of operations......

Words: 278 - Pages: 2

Free Essay


...Introduction We have been hired to deploy a wireless network for Citizens First National Bank. We are going to design, test and deploy this network. Banks have been slow to adapt this technology because if the high security standards they must follow. Since security has been improved and the benefits are so great more and more companies are starting to deploy wireless networks. It the next couple pages I will go through the scope of the project along with the goals and requirements. There are some initial testing that we have to get down and setup so auditors will be able to test before we can deploy to all branches. By using auditors it helps protect the bank with a paper trail incase an incident ever happened. This would show that we have followed all requirements and made every possible attempt to protect our customers and employees. We will have 60 days to setup and test before we have to purchase equipment. This should provide plenty of time to get a location up and running and have their auditors in to do testing. After initial testing we will then put a plan in place to bring all branches online one at a time while sticking to the budget. Scope and Goals Scope The major driving force of this project is to add a wireless infrastructure to the entire bank that would allow seamless use between all branches, while maintaining the high security standards that the FCC requires to help protect the customers and employees of the bank. The details of......

Words: 786 - Pages: 4

Premium Essay

Quality Web Design

...Company Overview Quality Web Design (QWD) is a company that specializes in Websites and Web Design content for any type of business. Their mission is to help other businesses increase their revenue by providing them with top quality websites for their customers. In addition, they own over 250,000 of proprietary images, and graphical designs. These designs are customized for every industry and demographic. Their business process is quite simple. They have a server at the Company Headquarters, where they store all of their proprietary data (including images, scripts, templates, etc). They utilize a Microsoft Visual Studio Team Foundation Service (TFS) server to manage their content and the progress of the project. “Team Foundation is a set of tools and technologies that enable a team to collaborate and coordinate their efforts on building a product or completing a project. Team Foundation enhances team communication, tracks work status, supports team roles, enacts the team process, and integrates team tools.” ( (2011) Team Foundation Overview) In addition to the Team Foundation, they also utilize Visual Studio to code, and build the websites. These resources are accesses through different methods. Those methods include WAN connection, VPN connection through a remote office, and through the corporate office via LAN. They also have other services such as Outlook Web Access for E-mail that is accessed via the methods mentioned above. They have also......

Words: 927 - Pages: 4

Premium Essay

Broadway Cafe

...The Broadway Café CIS – 500 Abstract The Broadway Café has seen a decrease in all aspects of the business. Outdated business practices are still being used because the previous owner never saw the need to upgrade. New business practices such as the use of technology will be put in place to compete with competition in the area. Due to the fact marketing has never been used at The Broadway Café; different marketing strategies will be implemented so that the business should at least see a turnaround in profits very quickly. Management will also be an area that will be overhauled, therefore management and employees will become more efficient and effective. The Broadway Café The Broadway Café has been in the family for years, but as of recently the business has suffered due to very outdated business practices and old marketing strategies. To turn the family business around and start seeing a profit again the business as a whole needs to be revamped. The main objective is profit so we have to become more aggressive and get that advantage that my grandfather had back when first opened the café. Also we need to catch back up with the times of the 21st century and use these tools that are at our disposal. We need to first keep our current customers while attracting new customers. To organize such an effort we will implement a new frequency reward program. We will have the cards on display for pick up, the card we say something in the form of once you buy your fourth......

Words: 2513 - Pages: 11

Premium Essay

Cis System Analysis

...System Architecture 1. Define the term system architecture. Define the term scalability, and explain why it is important to consider scalability in system design. * System architecture translates the logical design of an information system into a physical structure that includes hardware, software, network support, and processing methods. Scalability is the measure of a system’s ability to expand, change, or downsize easily to meet the changing needs of a business enterprise. Scalability is especially important in implementing systems that are volume-related, such as transaction processing systems. 2. When selecting an architecture, what items should a systems analyst consider as part of the overall design checklist? * Before selecting a system architecture, the analyst must consider the following issues: * Enterprise resource planning (ERP) * Initial cost and (TCO) * Scalability * Web integration * Legacy system interface requirements * Processing options * Security issues 3. What is enterprise resource planning (ERP) and why is it important? What is supply chain management? * Enterprise resource planning (ERP) defines a specific architecture, including standards for data, processing, network, and user interface design. It is important because it describes a specific hardware and software environment that ensures hardware connectivity and easyintegration of future applications, including in-house software and......

Words: 1431 - Pages: 6

Premium Essay

Strategic Management and Innovation

...Name of Student: Case#: Case Analysis 4 Name of Couse/#: Strategic management of technology (NETW583) Date: 1. Why did Google make this move? What do hope to accomplish Answer Google made this move so that they could become innovative. Google wanted to be known for a broader scope of activity instead of just for web site and maps . “Google interest in the spectrum came after AT&T and other larger broad band provider expressed interest in recent years getting web base business to pay more fir their customer use of broad band network.” ( Google wants monopoly over internet experience and the device that host it. If they won the bid they could control sales for their services. Google wanted the same bid on their network. Due to the 700 MHz spectrum it was perfect for wireless industry as it could travel farther than others wireless network 2. How does Google support for open access fits into Google plans Answer “Google has said it would bid on the 700MHz spectrum only if the FCC guarantees certain open-access principles; including open access for companies wanting to buy wireless capacity wholesale.” ( The four freedom laid down by Google was i. Use any application on any device they want ii. Other company would be able to license their spectrum at wholesale price iii.......

Words: 568 - Pages: 3

Free Essay

Integrative Network Design Project

...Integrative Network Design Project Kudler Fine Foods is one of the biggest and fastest growing food companies in the Unites States. Because of this fast expansion there are expected and often increased goals that must be done in order to keep all parts of the company working as they should. One of these areas that must be kept up to date and secured at all times is its integrated network. Again because of the company’s recent growth there will be challenges that will happen especially with the network so a good integrative network design must be developed in order to continue this positive trend both in present and in the future. Kudler Fine Foods is taking the next step to upgrade the existing infrastructure with new wireless technology which will provide a better communication link for not only all of the stores, but for all of the employees as well. Kudler Fine Foods wants to implement a new network design that will connect their three locations that is spreaded out across the U.S. With the new systems and servers the ability to maximize the company’s profits will increase overnight. This new inventory system will allow the stores POS systems to alert the warehouses to ship more products when they are running low automatically. This will eliminate the need of wasted man hours checking the stock. Using a Wide Area Network (WAN) would be the best choice for connecting the three locations together. They also want to implement a communication system throughout the......

Words: 324 - Pages: 2

Free Essay

Bis 220 Week 1 Information Technology

...Information Technology Acts Liriaxis Marie Gonzalez BIS/220 June 25, 2013 Nnamdi Osakwe Information Technology Acts Technology has advanced greatly in the recent years. The internet has made it is easy for people to get any information they want, which in return presents danger to minors. This advance in technology has opened new issues that need to be addressed. Children depend on adults to protect them from any harm and as a result government passed acts to prevent child abuse on the internet. The two acts being discussed in this paper are the Children’s Internet Protection Act of 2000 and the Children’s Online Protection Act (COPPA) of 1998. Children’s Internet Protection Act, 2000 The Children’s Internet Protection Act (CIPA) is a federal law which was passed by Congress to prevent children from viewing the offensive or harmful content over the Internet ("FCC", 2013). CIPA regulates the schools and all public libraries. It makes it mandatory to filter all its computers to stop children from accessing sites that are not appropriate. ("FCC", 2013). The (CIPA) was passed in December 2000 and its main priority is to protect children’s innocent eyes from child pornography and other dangers of the internet. CIPA does not require a certain kind of filter system, but rather to make sure schools and libraries have some sort of filters to prevent such activities. There are online predators, inappropriate chat rooms, and sexual content that children are at risk for......

Words: 606 - Pages: 3

Free Essay

Diploma of It

...Task 1 KeepKool, a state wide manufacturer of refrigeration appliances wants to configure an internet gateway but due to lack of IT professional they have not been able to do so. Their basic requirements are * Internet services via a reputable internet service provider * Ensure minimal disruption to current LAN services * Enable required security measures Considering their requirements, I would give first priority to Telstra Broadband Service which is the largest internet service provider in Australia..Telstra build technology and content solutions that are simple and easy to use – including Australia’s largest fully integrated IP network and Australia’s largest and fastest national mobile network. That’s why they strive to serve and know their customers better than anyone else – offering a choice of not just digital connection, but digital content as well. Telstra provides latest 4G network that is most compatible with any other service and has rare disruption. As Australia’s leading telecommunications and information Services Company, Telstra is proud to be helping their customers improve the ways in which they live and work through connection. Personal information held by Telstra may include your name, date of birth, current and previous addresses, telephone or mobile phone number, email address, bank account or credit card details, occupation, driver's licence number and Telstra PIN, username or password. They also hold details of your Telstra services......

Words: 339 - Pages: 2

Premium Essay

Net410 Week 2 Lab

...Lab 2: Application of the Top-Down Network Design Methodology Lab Report 1. What are the business goals? (10 points) The business goals are to revise an existing network to accommodate a growing campus as well as to support online learning. 2. What are the business constraints? (10 points) Money is a business constraint as the funding is revenue from a property tax and previously approved bond issue, the funds must be spent in a fiscally prudent manner while still delivering the required network improvements. In addition to financial constraints, other business constraints include the hiring of new personnel to support the expanding network and the implementation of the changes to the network. 3. What are the technical goals? (10 points) The technical goals for the setup are: - To connect all of the buildings to the new IT wing of the administration building - Provide controlled wireless access for the students in each classroom - Provide open wireless access for students and locals in the areas outside of each building - Provide high speed wired connection to each faculty office - Provide a centralized online backup of all data designed for backup - And replace the PBX based telephone system with a VOIP based system. 4. What are the technical constraints? (10 points) It is anticipated that within the next few years, a new building will be added to the campus 15 miles away running along a city-owned hiking trail that runs along......

Words: 684 - Pages: 3

Free Essay

It 241 Appendix a

...Associate Program Material Appendix A Final Project Overview and Timeline Final Project Overview In the final project, you assume the role of a wireless network consultant working for a company called Apex Designs. You must present Apex Designs with a plan that outlines how you intend to design their wireless network. The plan must be based on the recommended steps for designing a WLAN, outlined in the following bulleted list. In addition to the design of the network, Apex Designs has asked that you provide a basic wireless security policy. To that end, your plan must consist of the following elements: • Deployment scenario • IEEE wireless network type • Access point management • Location of wireless devices • Wireless security policy Final Project Timeline Budget your time wisely and work on your project throughout the course. Some of the discussion questions, CheckPoints, and assignments in the course will assist you in creating your final project. If you complete your course activities and use the feedback provided by the instructor, you will be on the right track to complete your project successfully. □ Suggested in Week One: Read the Final Project Overview and Timeline in Appendix A. Review Appendix I and Appendix J. □ Suggested in Week Three: Begin to identify the hardware components that your network may use based on the list of components compiled in the Wireless Network Components assignment. You will not be able to finalize this......

Words: 446 - Pages: 2