44. Describe the basic features of the circular flow diagram. 45. What is the relationship between businesses and households in the circular flow diagram? 46. In the below circular flow diagram, the household and business sectors are labeled with arrows representing the flows of income and output labeled (a) through (f) and the two appropriate markets labeled (g) and (h). Supply the correct descriptive titles for each of these labels (a) through (h). 47. Describe the flows that occur between (a) households and the product market, (b) businesses and the product market, and (c) households and the resource market. 48. Define the three main categories of businesses.

44. Describe the basic features of the circular flow diagram.

45. What is the relationship between businesses and households in the circular flow diagram?

46. In the below circular flow diagram, the household and business sectors are labeled with arrows representing the flows of income and output labeled (a) through (f) and the two appropriate markets labeled (g) and (h). Supply the correct descriptive titles for each of these labels (a) through (h).

47. Describe the flows that occur between (a) households and the product market, (b) businesses and the product market, and (c) households and the resource market.

48. Define the three main categories of businesses.

45. What is the relationship between businesses and households in the circular flow diagram? 46. In the below circular flow diagram, the household and business sectors are labeled with arrows representing the flows of income and output labeled (a) through (f) and the two appropriate markets labeled (g) and (h). Supply the correct descriptive titles for each of these labels (a) through (h). 47. Describe the flows that occur between (a) households and the product market, (b) businesses and the product market, and (c) households and the resource market. 48. Define the three main categories of businesses. 49. Explain the main characteristics of a corporation. 50. In a market system entrepreneurs or the managers they hire must deal with risk. Discuss the incentives of these individuals when dealing with risk, relative to those of a central planner in a command economy

45. What is the relationship between businesses and households in the circular flow diagram?

46. In the below circular flow diagram, the household and business sectors are labeled with arrows representing the flows of income and output labeled (a) through (f) and the two appropriate markets labeled (g) and (h). Supply the correct descriptive titles for each of these labels (a) through (h).

47. Describe the flows that occur between (a) households and the product market, (b) businesses and the product market, and (c) households and the resource market.

48. Define the three main categories of businesses.

49. Explain the main characteristics of a corporation.

50. In a market system entrepreneurs or the managers they hire must deal with risk. Discuss the incentives of these individuals when dealing with risk, relative to those of a central planner in a command economy

ACC Tax Form Problem Partnership (Form 1065) Fall 2014 Rick Smith, Bill Thomas, Diane Asche, and Jill Renteria are equal owners in STAR, LLC a limited liability company engaged in HR consulting. Pertinent information regarding STAR is summarized below. Social security numbers are as follows; Rick 648-98-4321; Bill 48663-4297; Diane 855-21-1750; and Jill 896-49-2341. Rick is the Managing Member of the company. The address of the company is 2835 Bay View Drive, Wilmington, NC 26812. The company was organized and began operations on January 1, 2009. The business code is 561900. The federal identification number is 67-1234576 The company uses the cash method of accounting and the calendar year for reporting. The company claimed $8,119 depreciation for book purposes, but $12,319 for tax purposes (under a MACRS methodology). Assume none of the depreciation creates a tax preference or adjustment for AMT purposes. All loan borrowings were used exclusively for acquisition of equipment, consequently, all interest is considered business interest. No guaranteed payments were paid to Thomas, Asche, or Renteria, but each of the four partners withdrew $50,000 as a distribution of operating profits. There was no distribution of any non-cash property. The equipment loan is nonrecourse debt to the owners. All initial equity contributions were paid equally and each individual owns 25% of the partnership. None of the partners sold any portion of their ownership interests during the year. The company has no available tax credits. The companys operations are entirely restricted to the local geographic area in North Carolina. All owners are U.S. citizens. The company had no foreign operations, no foreign bank accounts, and no interest in any foreign trusts. The partnership is not publicly traded. The company is not subject to the consolidated audit procedures. The company files its return in Cincinnati, OH. Rick Smith lives at 572 Knowles Ct., Wilmington, NC 26811, Bill Thomas lives at 942 Richland Dr., Wilmington, NC 26812; Diane Asche lives at 1342 Coastal Rd., Wilmington, NC 26812; and Jill Renteria lives at 550 Rocker Ave., Wilmington, NC 26812. The companys marketable securities represent small investments (<1%) in a number of publicly traded companies and mutual funds. The company sold its holdings of XYZ Corporation (carried as Marketable Securities on the balance sheet) on July 10 for $5,000. The partnership purchased this investment several years ago for $9,000. (The proceeds from this sale are listed as a cash receipt below. The company has no prior-year capital gains or losses.) The current income statement for the company reflected book net income of $ 203,900 AFTER book depreciation has been taken on the equipment, and the loss on the sale of XYZ Mutual Fund. The following information was taken from the corporations financial statements for the current year. Cash Receipts: Fees collected Taxable qualified dividend income Taxable portfolio interest income Tax Exempt interest Proceeds from sale of XYZ Corp. common stock Total Receipts Cash Disbursements: Guaranteed payment to Rick Smith Distributions to partners ($50K each) Customer Refunds Office Rent Utilities Administrative employee salaries Business & Professional Licenses Cash Contribution to United Way (a 50% org.) Meals & Entertainment (100%) Travel (for business) Office supplies & expense Accounting (Professional) fees Advertising Taxes (Payroll, State, Local) Business interest (on equipment loan) Principal payments on equipment loan General Liability Insurance Expense Equipment rental Total Disbursements $750,000 3,600 2,400 2,600 $ 5,000 $763,600 $120,000 200,000 3.000 26,000 6,700 305,000 2,000 1,000 3,600 7,000 10,000 10,000 7,000 28,600 4,481 15,000 3,200 5,000 757,581 Journal entries have been made to record regular (book) depreciation in the amount of $8,119. MACRS tax depreciation was not recorded in the book records. Principal payments against the equipment loan amounted to $15,000 for the year. The balance sheets (book basis) for the company were as follows for the current year: Account Cash Tax-exempt securities (at cost) Marketable Securities (at cost) Office furniture & equipment Accumulated depreciation Total assets January 1, 2013 $ 86,576 52,000 120,000 65,000 ( 36,576) $ 287,000 December 31, 2013 $ ? 52,000 111,000 65,000 ________? $ ? Nonrecourse equipment loan Capital Account – Rick Capital Account Bill Capital Account Diane Capital Account – Jill Total liabilities and capital $ 47,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000 $ 287,000 $ ? $ ? $ ? $ ? $_______? $ ? REQUIRED: 1. Prepare a Form 1065 for the partnership for 2013 including Form 4562 and Forms K-1 for each partner. (Do NOT prepare a state return). Prepare supporting schedules as necessary if adequate information is provided. (Hint: If you use a tax software program, you may override the Form 4562 with asset current and accumulated depreciation entries).

ACC Tax Form Problem
Partnership (Form 1065) Fall 2014
Rick Smith, Bill Thomas, Diane Asche, and Jill Renteria are equal owners in STAR, LLC a limited liability company engaged in HR consulting. Pertinent information regarding STAR is summarized below.

Social security numbers are as follows; Rick 648-98-4321; Bill 48663-4297; Diane 855-21-1750; and Jill 896-49-2341. Rick is the
Managing Member of the company.
The address of the company is 2835 Bay View Drive, Wilmington, NC
26812.
The company was organized and began operations on January 1, 2009.
The business code is 561900.
The federal identification number is 67-1234576
The company uses the cash method of accounting and the calendar year
for reporting.
The company claimed $8,119 depreciation for book purposes, but $12,319
for tax purposes (under a MACRS methodology). Assume none of the
depreciation creates a tax preference or adjustment for AMT
purposes.
All loan borrowings were used exclusively for acquisition of equipment,
consequently, all interest is considered business interest.
No guaranteed payments were paid to Thomas, Asche, or Renteria, but
each of the four partners withdrew $50,000 as a distribution of operating
profits. There was no distribution of any non-cash property.
The equipment loan is nonrecourse debt to the owners. All initial equity
contributions were paid equally and each individual owns 25% of the
partnership.
None of the partners sold any portion of their ownership interests during
the year.
The company has no available tax credits.
The companys operations are entirely restricted to the local geographic
area in North Carolina. All owners are U.S. citizens. The company had
no foreign operations, no foreign bank accounts, and no interest in any
foreign trusts. The partnership is not publicly traded.
The company is not subject to the consolidated audit procedures. The
company files its return in Cincinnati, OH.
Rick Smith lives at 572 Knowles Ct., Wilmington, NC 26811, Bill
Thomas lives at 942 Richland Dr., Wilmington, NC 26812; Diane Asche
lives at 1342 Coastal Rd., Wilmington, NC 26812; and Jill Renteria lives
at 550 Rocker Ave., Wilmington, NC 26812.
The companys marketable securities represent small investments (<1%)
in a number of publicly traded companies and mutual funds.

The company sold its holdings of XYZ Corporation (carried as Marketable
Securities on the balance sheet) on July 10 for $5,000. The partnership
purchased this investment several years ago for $9,000.
(The proceeds from this sale are listed as a cash receipt below. The
company has no prior-year capital gains or losses.)

The current income statement for the company reflected book net income of $ 203,900
AFTER book depreciation has been taken on the equipment, and the loss on the sale of
XYZ Mutual Fund. The following information was taken from the corporations
financial statements for the current year.

Cash Receipts:
Fees collected
Taxable qualified dividend income
Taxable portfolio interest income
Tax Exempt interest
Proceeds from sale of XYZ Corp. common stock
Total Receipts
Cash Disbursements:
Guaranteed payment to Rick Smith
Distributions to partners ($50K each)
Customer Refunds
Office Rent
Utilities
Administrative employee salaries
Business & Professional Licenses
Cash Contribution to United Way (a 50% org.)
Meals & Entertainment (100%)
Travel (for business)
Office supplies & expense
Accounting (Professional) fees
Advertising
Taxes (Payroll, State, Local)
Business interest (on equipment loan)
Principal payments on equipment loan
General Liability Insurance Expense
Equipment rental
Total Disbursements

$750,000
3,600
2,400
2,600
$ 5,000
$763,600

$120,000
200,000
3.000
26,000
6,700
305,000
2,000
1,000
3,600
7,000
10,000
10,000
7,000
28,600
4,481
15,000
3,200
5,000
757,581

Journal entries have been made to record regular (book) depreciation in the amount of
$8,119. MACRS tax depreciation was not recorded in the book records.
Principal payments against the equipment loan amounted to $15,000 for the year.
The balance sheets (book basis) for the company were as follows for the current year:
Account
Cash
Tax-exempt securities (at cost)
Marketable Securities (at cost)
Office furniture & equipment
Accumulated depreciation
Total assets

January 1, 2013
$ 86,576
52,000
120,000
65,000
( 36,576)
$ 287,000

December 31, 2013
$
?
52,000
111,000
65,000
________?
$
?

Nonrecourse equipment loan
Capital Account – Rick
Capital Account Bill
Capital Account Diane
Capital Account – Jill
Total liabilities and capital

$ 47,000
$ 60,000
$ 60,000
$ 60,000
$ 60,000
$ 287,000

$
?
$
?
$
?
$
?
$_______?
$
?

REQUIRED:
1. Prepare a Form 1065 for the partnership for 2013 including
Form 4562 and Forms K-1 for each partner. (Do NOT prepare a state return). Prepare
supporting schedules as necessary if adequate information is provided. (Hint: If you use
a tax software program, you may override the Form 4562 with asset current and
accumulated depreciation entries).

K’s Brewery is also evaluating different approaches to the decision where to locate the second brewery. These approaches consider a) operations costs for each facility; and b) if the capacity to be added at either Magdeburg or Zwickau is sufficient/too much. a) Operations cost Total fixed (production) costs can be calculated from the information in part 1b). Raw materials costs have to be added; however, in particular the cost for hops has seen significant fluctuations due to bad harvests. The following table is based on data for the past 5 years and shows the probability for raw materials costs per 1000 cases beer brewed. What would be the expected cost of raw materials per 1000 cases? Round to an integer. (Total points 11) Determine total operations cost per 1000 cases for each facility that includes the expected cost for raw material plus the before mentioned fixed costs. Cost per 1000 cases beer brewed Probability €1800 0.08 €2000 0.12 €2200 0.25 €2400 0.2 €2600 0.2 €2800 0.15 b) The management of K’s brewery is also contemplating if the currently planned additional capacity is sufficient (or too much). The plans include a capacity for Zwickau of 1250, 1500 or 1700 (in 1000 cases), and for Magdeburg 1500, 1700 ,or 2200. Besides the immediate forecasts for the next month (Part 1a), long-term forecasts of demand were undertaken to judge aggregated (across all regions) demand depending on the state of the economy. Depending on the size of the new facility, productions costs per 1000 cases will change also (due to increased or decreased economies of scale). If capacity and demand do not match, the following happens: if capacity is above demand, the brewery will brew just according to demand; if capacity is below demand, K’s brewery needs to subcontract, which incurs cost subcontracting costs. The Part2 input data file includes all relevant information. . The probability for a good economy is estimated at 0.3, for a medium economy also at 0.3 and 0.4 for a bad economy. A case of beer sells for Euro4. Hints: You need to calculate aggregated costs (i.e. totaled for aggregated production including raw material costs, based on your answer from part a), and then profits for the three different sizes of each facility, and for each economic state of nature. Determine which location should be chosen, and which size. Discuss your findings. Zwickau Capacity Resulting total in 1000 capacity (all cases breweries) 1250 1500 1700 5450 5700 5900 Magdeburg Capacity Resulting total in 1000 capacity (all cases breweries) 1500 1700 2200 5700 5900 6400 Cost per 1000 cases Expected aggregated Expected Expected Subcontracting cost sales good economy aggregated sales aggregated per 1000 cases (in 1000 cases) medium economy (in sales bad 1000 cases) economy (in 1000 cases) 1,800.00 6000.00 5000.00 4300.00 2,500.00 1,600.00 6000.00 5000.00 4300.00 2,500.00 1,400.00 6000.00 5000.00 4300.00 2,500.00 Cost per 1000 cases Expected aggregated Expected Expectedaggreg Subcontracting cost sales good economy aggregated sales ated sales bad per 1000 cases (in 1000 cases) medium economy (in economy (in 1000 cases) 1000 cases) 1,600.00 6000.00 5000.00 4300.00 2,500.00 1,400.00 6000.00 5000.00 4300.00 2,500.00 1,300.00 6000.00 5000.00 4300.00 2,500.00 Expected sales are given for 1 month. The capacity is also monthly capacity.

K’s Brewery is also evaluating different approaches to the decision where to locate the second brewery. These approaches consider a) operations costs for each facility; and b) if the capacity to be added at either Magdeburg or Zwickau is sufficient/too much.
a) Operations cost
Total fixed (production) costs can be calculated from the information in part 1b). Raw materials costs have to be added; however, in particular the cost for hops has seen significant fluctuations due to bad harvests. The following table is based on data for the past 5 years and shows the probability for raw materials costs per 1000 cases beer brewed. What would be the expected cost of raw materials per 1000 cases? Round to an integer. (Total points 11)
Determine total operations cost per 1000 cases for each facility that includes the expected cost for raw material plus the before mentioned fixed costs.

Cost per 1000 cases beer brewed Probability
€1800 0.08
€2000 0.12
€2200 0.25
€2400 0.2
€2600 0.2
€2800 0.15

b) The management of K’s brewery is also contemplating if the currently planned additional capacity is sufficient (or too much). The plans include a capacity for Zwickau of 1250, 1500 or 1700 (in 1000 cases), and for Magdeburg 1500, 1700 ,or 2200. Besides the immediate forecasts for the next month (Part 1a), long-term forecasts of demand were undertaken to judge aggregated (across all regions) demand depending on the state of the economy. Depending on the size of the new facility, productions costs per 1000 cases will change also (due to increased or decreased economies of scale). If capacity and demand do not match, the following happens: if capacity is above demand, the brewery will brew just according to demand; if capacity is below demand, K’s brewery needs to subcontract, which incurs cost subcontracting costs. The Part2 input data file includes all relevant information. . The probability for a good economy is estimated at 0.3, for a medium economy also at 0.3 and 0.4 for a bad economy. A case of beer sells for Euro4. Hints: You need to calculate aggregated costs (i.e. totaled for aggregated production including raw material costs, based on your answer from part a), and then profits for the three different sizes of each facility, and for each economic state of nature. Determine which location should be chosen, and which size. Discuss your findings.
Zwickau
Capacity Resulting total
in 1000
capacity (all
cases
breweries)
1250
1500
1700

5450
5700
5900

Magdeburg
Capacity Resulting total
in 1000
capacity (all
cases
breweries)
1500
1700
2200

5700
5900
6400

Cost per 1000
cases

Expected aggregated Expected
Expected
Subcontracting cost
sales good economy aggregated sales
aggregated
per 1000 cases
(in 1000 cases)
medium economy (in sales bad
1000 cases)
economy (in
1000 cases)
1,800.00
6000.00
5000.00
4300.00
2,500.00
1,600.00
6000.00
5000.00
4300.00
2,500.00
1,400.00
6000.00
5000.00
4300.00
2,500.00

Cost per 1000
cases

Expected aggregated Expected
Expectedaggreg Subcontracting cost
sales good economy aggregated sales
ated sales bad per 1000 cases
(in 1000 cases)
medium economy (in economy (in
1000 cases)
1000 cases)
1,600.00
6000.00
5000.00
4300.00
2,500.00
1,400.00
6000.00
5000.00
4300.00
2,500.00
1,300.00
6000.00
5000.00
4300.00
2,500.00

Expected sales are given for 1 month.
The capacity is also monthly capacity.

: LASA # 2Capital Budgeting Techniques As a financial consultant, you have contracted with Wheel Industries to evaluate their procedures involving the evaluation of long term investment opportunities. You have agreed to provide a detailed report illustrating the use of several techniques for evaluating capital projects including the weighted average cost of capital to the firm, the anticipated cash flows for the projects, and the methods used for project selection. In addition, you have been asked to evaluate two projects, incorporating risk into the calculations. You have also agreed to provide an 8-10 page report, in good form, with detailed explanation of your methodology, findings, and recommendations. Company Information Wheel Industries is considering a three-year expansion project, Project A. The project requires an initial investment of $1.5 million. The project will use the straight-line depreciation method. The project has no salvage value. It is estimated that the project will generate additional revenues of $1.2 million per year before tax and has additional annual costs of $600,000. The Marginal Tax rate is 35%. Required: Wheel has just paid a dividend of $2.50 per share. The dividends are expected to grow at a constant rate of six percent per year forever. If the stock is currently selling for $50 per share with a 10% flotation cost, what is the cost of new equity for the firm? What are the advantages and disadvantages of using this type of financing for the firm? The firm is considering using debt in its capital structure. If the market rate of 5% is appropriate for debt of this kind, what is the after tax cost of debt for the company? What are the advantages and disadvantages of using this type of financing for the firm? The firm has decided on a capital structure consisting of 30% debt and 70% new common stock. Calculate the WACC and explain how it is used in the capital budgeting process. Calculate the after tax cash flows for the project for each year. Explain the methods used in your calculations. If the discount rate were 6 percent calculate the NPV of the project. Is this an economically acceptable project to undertake? Why or why not? Depreciation = Cost of the asset salvage value Life of the asset = 1,500,000/ 3 = 500,000 Calculation of cash flows: Revenue 1,200,000 Less Cost 600,000 Less Depreciation 500,000 Profit 100,000 Less taxes (35%) 35,000 Profit after taxes 65,000 Add depreciation Cash flow after taxes 500,000 565,000 NPV = Present value of cash flows – Cash outlay = 565,000 x PVIFA 6%, 3 years 1,200,000 = 565,000 x 2.6730 1,200,000 = 1,510,245 1,200,000 = 310,245 As the NPV is positive the project should be accepted. Now calculate the IRR for the project. Is this an acceptable project? Why or why not? Is there a conflict between your answer to part C? Explain why or why not? Wheel has two other possible investment opportunities, which are mutually exclusive, and independent of Investment A above. Both investments will cost $120,000 and have a life of 6 years. The after tax cash flows are expected to be the same over the six year life for both projects, and the probabilities for each year’s after tax cash flow is given in the table below. Investment B Investment C Probability After Probability After Tax Tax Cash Cash Flow Flow 0.25 $20,000 0.30 $22,000 0.50 32,000 0.50 40,000 0.25 40,000 0.20 50,000 What is the expected value of each projects annual after tax cash flow? Justify your answers and identify any conflicts between the IRR and the NPV and explain why these conflicts may occur. Assuming that the appropriate discount rate for projects of this risk level is 8%, what is the risk-adjusted NPV for each project? Which project, if either, should be selected? Justify your conclusions. Assignment 1 Grading Criteria Correctly calculated the cost of new equity and explained the calculations, as well as the advantages and disadvantages of using this type of financing for the firm. (CO4) Correctly calculated the cost of new debt and explained the calculations, as well as the advantages and disadvantages of using this type of financing for the firm. (CO4) Correctly calculated the weighted average cost of capital and explained how and why it is used in the capital budgeting process. (CO4) Correctly calculated the annual cash flows for the projects and explained the methods used in the calculations. (CO1) Evaluated the projects using the NPV method and came to the correct conclusions based on the decision rules for the NPV. (CO2) Evaluated the projects using the IRR method and came to the correct conclusion based on the decision rules for the IRR. Identified any conflicts between the IRR and the NPV and explained why these conflicts may occur. (CO 3) Correctly introduced risk into the evaluation by using the expected values as the cash flows and evaluated these cash flows using risk adjusted discounted rates. (CO 5) Written in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; displayed accurate spelling, grammar, and punctuation.

: LASA # 2Capital Budgeting Techniques

As a financial consultant, you have contracted with Wheel Industries to evaluate their procedures involving the evaluation of long term investment opportunities. You have agreed to provide a detailed report illustrating the use of several techniques for evaluating capital projects including the weighted average cost of capital to the firm, the anticipated cash flows for the projects, and the methods used for project selection. In addition, you have been asked to evaluate two projects, incorporating risk into the calculations.
You have also agreed to provide an 8-10 page report, in good form, with detailed explanation of your methodology, findings, and recommendations.
Company Information
Wheel Industries is considering a three-year expansion project, Project A. The project requires an initial investment of $1.5 million. The project will use the straight-line depreciation method.
The project has no salvage value. It is estimated that the project will generate additional revenues of $1.2 million per year before tax and has additional annual costs of $600,000. The Marginal Tax rate is 35%.
Required:
Wheel has just paid a dividend of $2.50 per share. The dividends are expected to grow at a constant rate of six percent per year forever. If the stock is currently selling for $50 per share with a 10% flotation cost, what is the cost of new equity for the firm? What are the advantages and disadvantages of using this type of financing for the firm?
The firm is considering using debt in its capital structure. If the market rate of 5% is appropriate for debt of this kind, what is the after tax cost of debt for the company? What are the advantages and disadvantages of using this type of financing for the firm?
The firm has decided on a capital structure consisting of 30% debt and 70% new common stock. Calculate the WACC and explain how it is used in the capital budgeting process.
Calculate the after tax cash flows for the project for each year. Explain the methods used in your calculations.
If the discount rate were 6 percent calculate the NPV of the project. Is this an economically acceptable project to undertake? Why or why not?
Depreciation = Cost of the asset salvage value
Life of the asset
= 1,500,000/ 3
= 500,000
Calculation of cash flows:
Revenue
1,200,000
Less Cost
600,000
Less Depreciation
500,000
Profit 100,000
Less taxes (35%)
35,000
Profit after taxes
65,000

Add depreciation
Cash flow after taxes

500,000
565,000

NPV = Present value of cash flows – Cash outlay
= 565,000 x PVIFA 6%, 3 years 1,200,000
= 565,000 x 2.6730 1,200,000
= 1,510,245 1,200,000
= 310,245
As the NPV is positive the project should be accepted.
Now calculate the IRR for the project. Is this an acceptable project? Why or why not? Is there a conflict between your answer to part C? Explain why or why not?
Wheel has two other possible investment opportunities, which are mutually exclusive, and independent of Investment A above. Both investments will cost $120,000 and have a life of 6 years. The after tax cash flows are expected to be the same over the six year life for both projects, and the probabilities for each year’s after tax cash flow is given in the table below.
Investment B
Investment C

Probability
After
Probability
After
Tax
Tax
Cash
Cash
Flow
Flow
0.25
$20,000
0.30
$22,000
0.50
32,000
0.50
40,000
0.25
40,000
0.20
50,000
What is the expected value of each projects annual after tax cash flow? Justify your answers and identify any conflicts between the IRR and the NPV and explain why these conflicts may occur.
Assuming that the appropriate discount rate for projects of this risk level is 8%, what is the risk-adjusted NPV for each project? Which project, if either, should be selected? Justify your conclusions.
Assignment 1 Grading Criteria

Correctly calculated the cost of new equity and explained the calculations, as well as the advantages and disadvantages of using this type of financing for the firm. (CO4)
Correctly calculated the cost of new debt and explained the calculations, as well as the advantages and disadvantages of using this type of financing for the firm. (CO4)

Correctly calculated the weighted average cost of capital and explained how and why it is used in the capital budgeting process. (CO4)
Correctly calculated the annual cash flows for the projects and explained the methods used in the calculations. (CO1)
Evaluated the projects using the NPV method and came to the correct conclusions based on the decision rules for the NPV.
(CO2)
Evaluated the projects using the IRR method and came to the correct conclusion based on the decision rules for the IRR.
Identified any conflicts between the IRR and the NPV and explained why these conflicts may occur. (CO 3)
Correctly introduced risk into the evaluation by using the expected values as the cash flows and evaluated these cash flows using risk adjusted discounted rates. (CO 5)
Written in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; displayed accurate spelling, grammar, and punctuation.

Case 8-3 Template INSTRUCTIONS: Read the case in the textbook. As a team, answer the questions in this spreadsheet, then save and submit the assignment as one Microsoft® Excel® attachment. Also, submit a 1-paragraph Microsoft® Word document explaining any issues or successes you had in answering these questions. “Refer to and use the following abbreviations for the problems below: • PP = Parma minimum supply purchase • S1 = Supplier 1 • S2 = Supplier 2 • CDF = Chain Discount Factor • NP = Net Price • NDE = Net Decimal Equivalent • TD = Trade Discount” 1. The Artist’s Palette purchases its inventory from a number of suppliers and each supplier offers different purchasing discounts. The manager of The Artist’s Palette, Marty Parma, is currently comparing two offers for purchasing modeling clay and supplies. The first company offers a chain discount of 20/10/5, and the second company offers a chain discount of 18/12/7 as long as the total purchases are $300 or more. Assuming Parma purchases $300 worth of supplies, a) what is the net price from supplier 1? And b) From supplier 2? And c) From which supplier would you recommend Parma purchase her modeling clay and supplies? 2. What is the net decimal equivalent for supplier 1? For supplier 2? 3. What is the trade discount from supplier 1? From supplier 2? 4. The Artist’s Palette recognizes that students may purchase supplies at the beginning of the term to cover all of their art class needs. Because this could represent a fairly substantial outlay, the Artist’s Palette offers discounts to those students who pay sooner than required. Assume that if students buy more than $250 of art supplies in one visit, they may put it on a student account with terms of 2/10, n/30. If a student purchases $250 of supplies on September 16, what amount is due by September 26? How much would the student save by paying early? 5. Assume that if students buy more than $250 of art supplies in one visit, they may put the charge on a student account with terms of 2/10 EOM. If a student makes the purchase on September 16, on what day does the 2% discount expire? If the purchase is made on September 26, on what day does the 2% discount expire? If you were an art student, which method would you prefer: 2/10, n/30, or 2/10 EOM? Case 9-1 Template INSTRUCTIONS: Read the case in the textbook. As a team, answer the questions in this spreadsheet, then save and submit the assignment as one Microsoft® Excel® attachment. Also, submit a 1-paragraph Microsoft® Word document explaining any issues or successes you had in answering these questions. “Refer to and use the following abbreviations for the problems below: • BT = Box of tea • S&H = Shipping and handling • P = Desired profit per box of tea • RFP = Rice-filled pad 1. What is the markup percentage for a box of ginger tea? 2. If the rice-filled heating pads sell for $7.00, $10.00, and $15.00 for small, medium, and large, respectively, what is the markup percentage on each one? 3. Karen wants to compare using the cost plus method to the percentage markup method. If she sells 2 small rice pads, 4 medium rice pads, 2 large rice pads, and 20 boxes of $3.50 tea in a month, how much profit does she accumulate? What markup percentage based on cost would she have to use to make the same amount of profit on this month’s sales? 4. What prices should Karen charge (using the markup percentage) to obtain the same amount of profit as she did with the cost plus method? Do not include shipping.

Case 8-3 Template
INSTRUCTIONS: Read the case in the textbook. As a team, answer the questions in this spreadsheet, then save and submit the assignment as one Microsoft® Excel® attachment. Also, submit a 1-paragraph Microsoft® Word document explaining any issues or successes you had in answering these questions.

“Refer to and use the following abbreviations for the problems below:
• PP = Parma minimum supply purchase
• S1 = Supplier 1
• S2 = Supplier 2
• CDF = Chain Discount Factor
• NP = Net Price
• NDE = Net Decimal Equivalent
• TD = Trade Discount”

1. The Artist’s Palette purchases its inventory from a number of suppliers and each supplier offers different purchasing discounts. The manager of The Artist’s Palette, Marty Parma, is currently comparing two offers for purchasing modeling clay and supplies. The first company offers a chain discount of 20/10/5, and the second company offers a chain discount of 18/12/7 as long as the total purchases are $300 or more. Assuming Parma purchases $300 worth of supplies, a) what is the net price from supplier 1? And b) From supplier 2? And c) From which supplier would you recommend Parma purchase her modeling clay and supplies?
2. What is the net decimal equivalent for supplier 1? For supplier 2?
3. What is the trade discount from supplier 1? From supplier 2?
4. The Artist’s Palette recognizes that students may purchase supplies at the beginning of the term to cover all of their art class needs. Because this could represent a fairly substantial outlay, the Artist’s Palette offers discounts to those students who pay sooner than required. Assume that if students buy more than $250 of art supplies in one visit, they may put it on a student account with terms of 2/10, n/30. If a student purchases $250 of supplies on September 16, what amount is due by September 26? How much would the student save by paying early?
5. Assume that if students buy more than $250 of art supplies in one visit, they may put the charge on a student account with terms of 2/10 EOM. If a student makes the purchase on September 16, on what day does the 2% discount expire? If the purchase is made on September 26, on what day does the 2% discount expire? If you were an art student, which method would you prefer: 2/10, n/30, or 2/10 EOM?

Case 9-1 Template
INSTRUCTIONS: Read the case in the textbook. As a team, answer the questions in this spreadsheet, then save and submit the assignment as one Microsoft® Excel® attachment. Also, submit a 1-paragraph Microsoft® Word document explaining any issues or successes you had in answering these questions.

“Refer to and use the following abbreviations for the problems below:
• BT = Box of tea
• S&H = Shipping and handling
• P = Desired profit per box of tea
• RFP = Rice-filled pad
1. What is the markup percentage for a box of ginger tea?
2. If the rice-filled heating pads sell for $7.00, $10.00, and $15.00 for small, medium, and large, respectively, what is the markup percentage on each one?
3. Karen wants to compare using the cost plus method to the percentage markup method. If she sells 2 small rice pads, 4 medium rice pads, 2 large rice pads, and 20 boxes of $3.50 tea in a month, how much profit does she accumulate? What markup percentage based on cost would she have to use to make the same amount of profit on this month’s sales?
4. What prices should Karen charge (using the markup percentage) to obtain the same amount of profit as she did with the cost plus method? Do not include shipping.

Unit II PowerPoint Presentation:Select an HRD need that you would like to focus on for the series of PowerPoint Presentations. This HRD need shouldpertain to your current organization, but if circumstances do not allow, please feel free to use a volunteer organization or apersonal HRD need as the subject for this project. Create a PowerPoint Presentation for senior executives that will serveas the initial step of the needs analysis process to include the following:? Referencing the diagnostic, analytic, or compliance, determine the method for selecting a performance issue to beimproved.? Identify the stakeholders of the HRD need, describing their position and role as it relates to this project.? Include a communication plan that describes the overall HRD and strategic planning process for the selectedorganization.? Explain and establish the importance of scheduling, and outline a timeline for conducting needs assessment.Your presentation should include 8-10 slides, including the title and reference slide, with speaker notes of no more than100 words. Use your textbook to complete this assignment as well as supplementary sources from your research. Allsources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanyingcitations.

Unit II PowerPoint Presentation:Select an HRD need that you would like to focus on for the series of PowerPoint Presentations. This HRD need shouldpertain to your current organization, but if circumstances do not allow, please feel free to use a volunteer organization or apersonal HRD need as the subject for this project. Create a PowerPoint Presentation for senior executives that will serveas the initial step of the needs analysis process to include the following:? Referencing the diagnostic, analytic, or compliance, determine the method for selecting a performance issue to beimproved.? Identify the stakeholders of the HRD need, describing their position and role as it relates to this project.? Include a communication plan that describes the overall HRD and strategic planning process for the selectedorganization.? Explain and establish the importance of scheduling, and outline a timeline for conducting needs assessment.Your presentation should include 8-10 slides, including the title and reference slide, with speaker notes of no more than100 words. Use your textbook to complete this assignment as well as supplementary sources from your research. Allsources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanyingcitations.

Markets are mechanisms for coordinating the set of connections of production operations that are distributed throughout the whole economic system. Thus, the market is the predominant and determining link between producers of goods and services and consumers. Accordingly, markets, as an exchange of goods and services that takes place as a result of buyers and sellers interactions, are generally considered the most efficient allocator of resources in the market economy. However, free markets are not allowed to solve some of the social problems in a society due to various reasons. One such social problem is illegal drugs. Another example is environmental such as pollutions. For an additional example for a social problem, where supply and demand is not allowed to freely function, read the “Last Word” feature on markets for human organs on Pages 68–69 of your textbook. There are black markets (underground economy) for human organs in some countries. But a trade in human organs, based on supply and demand, raises ethical issues and hence it indicates a limitation of relying on markets to solve the social problems we have in the society. You can write your research about social problems where the free markets are not allowed to function, which includes the market for a particular illegal good or service, a regulated market, etc. ? Select a social problem where free markets are not allowed to function and conduct research on the social problem. ? Describe how free market features could be introduced to help alleviate the social problem through free market operations of supply and demand. ? Discuss the risks of introducing market mechanisms of supply and demand in situations where ethical issues are present. Your answer should be approximately 5 pages long and should be formatted in APA style. Cite at least three references for the paper.

Markets are mechanisms for coordinating the set of connections of production operations that are distributed throughout the whole economic system. Thus, the market is the predominant and determining link between producers of goods and services and consumers. Accordingly, markets, as an exchange of goods and services that takes place as a result of buyers and sellers interactions, are generally considered the most efficient allocator of resources in the market economy.
However, free markets are not allowed to solve some of the social problems in a society due to various reasons. One such social problem is illegal drugs. Another example is environmental such as pollutions. For an additional example for a social problem, where supply and demand is not allowed to freely function, read the “Last Word” feature on markets for human organs on Pages 68–69 of your textbook. There are black markets (underground economy) for human organs in some countries. But a trade in human organs, based on supply and demand, raises ethical issues and hence it indicates a limitation of relying on markets to solve the social problems we have in the society.

You can write your research about social problems where the free markets are not allowed to function, which includes the market for a particular illegal good or service, a regulated market, etc.
? Select a social problem where free markets are not allowed to function and conduct research on the social problem.
? Describe how free market features could be introduced to help alleviate the social problem through free market operations of supply and demand.
? Discuss the risks of introducing market mechanisms of supply and demand in situations where ethical issues are present.
Your answer should be approximately 5 pages long and should be formatted in APA style. Cite at least three references for the paper.

BUS 330 WEEK 5 FINAL PAPER The Final Paper should demonstrate an understanding of the materials (texts, assignments, and discussions) covered in this course. Assume the role of Marketing Manager. Select a product (good or service) that is sold in the United States and has sales opportunities in a foreign market. Apply your critical thinking skills and the knowledge you have acquired throughout this course and address the following in your Final Paper: 1. Describe the product you selected in terms of the four utilities of customer value. 2. Identify the product’s target market at home and in your stated foreign market. 3. Indicate the competition of the product category in both home and foreign markets. 4. Explain how you would apply the segmentation, targeting, and positioning (STP) approach to market the product in the foreign market. 5. Discuss the major environmental facts and trends in the foreign markets that might affect sales of the product. 6. Explain how you would develop, execute. and measure a campaign for this product considering the four p’s (product, price, promotion, and place). 7. Discuss the U.S. and international ethical marketing considerations. Writing the Final Paper The Final Paper: 1. Must be eight- to ten- double-spaced pages in length, and formatted according to APA style as outlined in the Ashford Writing Center (not including the title and reference pages). 2. Must include a title page with the following: a. Title of paper b. Student’s name c. Course name and number d. Instructor’s name e. Date submitted 3. Must begin with an introductory paragraph that has a succinct thesis statement. 4. Must address the topic of the paper with critical thought. 5. Must end with a conclusion that reaffirms your thesis. 6. Must use at least five scholarly references in addition to the course text. 7. Must document all sources in APA style, as outlined in the Ashford Writing Center. 8. Must include a separate reference page, formatted according to APA style as outlined in the Ashford Writing Center

BUS 330 WEEK 5 FINAL PAPER
The Final Paper should demonstrate an understanding of the materials (texts, assignments, and discussions) covered in this course.

Assume the role of Marketing Manager. Select a product (good or service) that is sold in the United States and has sales opportunities in a foreign market. Apply your critical thinking skills and the knowledge you have acquired throughout this course and address the following in your Final Paper:

1. Describe the product you selected in terms of the four utilities of customer value.

2. Identify the product’s target market at home and in your stated foreign market.

3. Indicate the competition of the product category in both home and foreign markets.

4. Explain how you would apply the segmentation, targeting, and positioning (STP) approach to market the product in the foreign market.

5. Discuss the major environmental facts and trends in the foreign markets that might affect sales of the product.

6. Explain how you would develop, execute. and measure a campaign for this product considering the four p’s (product, price, promotion, and place).

7. Discuss the U.S. and international ethical marketing considerations.

Writing the Final Paper

The Final Paper:

1. Must be eight- to ten- double-spaced pages in length, and formatted according to APA style as outlined in the Ashford Writing Center (not including the title and reference pages).

2. Must include a title page with the following:

a. Title of paper
b. Student’s name
c. Course name and number
d. Instructor’s name
e. Date submitted

3. Must begin with an introductory paragraph that has a succinct thesis statement.

4. Must address the topic of the paper with critical thought.

5. Must end with a conclusion that reaffirms your thesis.

6. Must use at least five scholarly references in addition to the course text.

7. Must document all sources in APA style, as outlined in the Ashford Writing Center.

8. Must include a separate reference page, formatted according to APA style as outlined in the Ashford Writing Center

E5-2 (Classification of Balance Sheet Accounts) Presented below are the captions of Faulk Company’s balance sheet. (a) Current assets. (b) Investments. (c) Property, plant, and equipment. (d) Intangible assets. (e) Other assets. Instructions (f) Current liabilities. (g) Noncurrent liabilities. (h) Capital stock. (i) Additional paid-in capital. (j) Retained earnings. Indicate by letter where each of the following items would be classified. 1.Preferred stock. 2.Goodwill. 3.Salaries and wages payable. 4.Accounts payable. 5. Buildings. 6.Equity investments (trading). 7.Current maturity of long-term debt. 8.Premium on bonds payable. 9.Allowance for doubtful accounts. 10.Accounts receivable. 11.Cash surrender value of life insurance. 12.Notes payable (due next year). 13.Supplies. 14.Common stock. 15. Land. 16.Bond sinking fund. 17.Inventory . 18.Prepaid insurance. 19.Bonds payable. 20. Income taxes payable. E5-4 (Preparation of a Classified Balance Sheet) Assume that Denis Savard Inc. has the following accounts at the end of the current year. 1. Common Stock. 2. Discount on Bonds Payable. 3. Treasury Stock (at cost). 4. Notes Payable (short-term). 5. Raw Materials. 6. Preferred Stock Investments (long-term). 7. Unearned Rent Revenue. 8. Work in Process. 9. Copyrights. 10. Buildings. 11. Notes Receivable (short-term). 12. Cash. 13. Salaries and Wages Payable. Instructions 14. Accumulated Depreciation—Buildings. 15. Restricted Cash for Plant Expansion. 16. Land Held for Future Plant Site. 17. Allowance for Doubtful Accounts. 18. Retained Earnings. 19. Paid-in Capital in Excess of Par—Common Stock. 20. Unearned Subscriptions Revenue. 21. Receivables—Officers (due in one year). 22. Inventory (finished goods). 23. Accounts Receivable. 24. Bonds Payable (due in 4 years). 25. Noncontrolling Interest. Prepare a classified balance sheet in good form. (No monetary amounts are necessary E5-13 (Statement of Cash Flows—Classifications) The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each of the transactions listed below as: 1. Operating activity—add to net income. 2. Operating activity—deduct from net income. 3. Investing activity. 4. Financing activity. 5. Reported as significant noncash activity. The transactions are as follows. (a) Issuance of common stock. (b) Purchase of land and building. (c) Redemption of bonds. (d) Sale of equipment. (e) Depreciation of machinery. (f) Amortization of patent. (g) Issuance of bonds for plant assets. (h) Payment of cash dividends. (i) Exchange of furniture for office equipment. (j) Purchase of treasury stock. (k) Loss on sale of equipment. (l) Increase in accounts receivable during the year. (m) Decrease in accounts payable during the year P5-2 (Balance Sheet Preparation) for the current year, 2014. Goodwill Payroll taxes payable Bonds payable Discount on bonds payable Cash Land Notes receivable Notes payable (to banks) Accounts payable Retained earnings Income taxes receivable Notes payable (long-term) Instructions Presented below are a number of balance sheet items for Montoya, Inc., $ 125,000 177,591 300,000 15,000 360,000 480,000 445,700 265,000 490,000 $ Accumulated depreciation—equipment Inventory Rent payable (short-term) Income taxes payable Rent payable (long-term) Common stock, $1 par value Preferred stock, $10 par value Prepaid expenses ? 97,630 1,600,000 292,000 239,800 45,000 98,362 480,000 200,000 150,000 87,920 Equipment 1,470,000 Equity investments (trading) 121,000 Accumulated depreciation—buildings 270,200 Buildings 1,640,000 Prepare a classified balance sheet in good form. Common stock authorized was 400,000 shares, and pre- ferred stock authorized was 20,000 shares. Assume that notes receivable and notes payable are short-term, unless stated otherwise. Cost and fair value of equity investments (trading) are the same.

E5-2 (Classification of Balance Sheet Accounts) Presented below are the captions of Faulk Company’s balance sheet.
(a) Current assets. (b) Investments. (c) Property, plant, and equipment. (d) Intangible assets. (e) Other assets.

Instructions

(f) Current liabilities. (g) Noncurrent liabilities. (h) Capital stock. (i) Additional paid-in capital. (j) Retained earnings.

Indicate by letter where each of the following items would be classified.

1.Preferred stock. 2.Goodwill.

3.Salaries and wages payable.

4.Accounts payable.

5. Buildings.

6.Equity investments (trading).

7.Current maturity of long-term debt.

8.Premium on bonds payable.

9.Allowance for doubtful accounts.

10.Accounts receivable.

11.Cash surrender value of life insurance.

12.Notes payable (due next year).

13.Supplies.

14.Common stock.

15. Land.

16.Bond sinking fund.

17.Inventory

. 18.Prepaid insurance.

19.Bonds payable.

20. Income taxes payable.

E5-4 (Preparation of a Classified Balance Sheet) Assume that Denis Savard Inc. has the following accounts at the end of the current year.

1. Common Stock. 2. Discount on Bonds Payable. 3. Treasury Stock (at cost). 4. Notes Payable (short-term). 5. Raw Materials. 6. Preferred Stock Investments (long-term). 7. Unearned Rent Revenue. 8. Work in Process. 9. Copyrights.

10. Buildings. 11. Notes Receivable (short-term). 12. Cash. 13. Salaries and Wages Payable.

Instructions

14. Accumulated Depreciation—Buildings. 15. Restricted Cash for Plant Expansion. 16. Land Held for Future Plant Site. 17. Allowance for Doubtful Accounts.

18. Retained Earnings. 19. Paid-in Capital in Excess of Par—Common Stock. 20. Unearned Subscriptions Revenue. 21. Receivables—Officers (due in one year). 22. Inventory (finished goods). 23. Accounts Receivable. 24. Bonds Payable (due in 4 years). 25. Noncontrolling Interest.

Prepare a classified balance sheet in good form. (No monetary amounts are necessary

E5-13 (Statement of Cash Flows—Classifications) The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each of the transactions listed below as:

1. Operating activity—add to net income. 2. Operating activity—deduct from net income. 3. Investing activity. 4. Financing activity. 5. Reported as significant noncash activity.

The transactions are as follows.

(a) Issuance of common stock. (b) Purchase of land and building. (c) Redemption of bonds. (d) Sale of equipment. (e) Depreciation of machinery. (f) Amortization of patent. (g) Issuance of bonds for plant assets.

(h) Payment of cash dividends. (i) Exchange of furniture for office equipment. (j) Purchase of treasury stock. (k) Loss on sale of equipment. (l) Increase in accounts receivable during the year. (m) Decrease in accounts payable during the year

P5-2 (Balance Sheet Preparation) for the current year, 2014.

Goodwill Payroll taxes payable Bonds payable Discount on bonds payable Cash Land Notes receivable Notes payable (to banks) Accounts payable Retained earnings Income taxes receivable Notes payable (long-term)

Instructions

Presented below are a number of balance sheet items for Montoya, Inc.,

$

125,000 177,591 300,000

15,000 360,000 480,000 445,700 265,000 490,000

$

Accumulated depreciation—equipment Inventory Rent payable (short-term) Income taxes payable

Rent payable (long-term) Common stock, $1 par value Preferred stock, $10 par value Prepaid expenses

? 97,630 1,600,000

292,000 239,800 45,000 98,362 480,000 200,000 150,000 87,920 Equipment 1,470,000 Equity investments (trading) 121,000 Accumulated depreciation—buildings 270,200 Buildings 1,640,000

Prepare a classified balance sheet in good form. Common stock authorized was 400,000 shares, and pre- ferred stock authorized was 20,000 shares. Assume that notes receivable and notes payable are short-term, unless stated otherwise. Cost and fair value of equity investments (trading) are the same.