provision for doubtful accounts is made monthly at the rate of 2% of sales. * Merchandise inventory was $120‚000 at September 30‚ 2004‚ and an increase of $10‚000 is planned for the month. * All merchandise is marked up to sell at invoice cost plus 50%. * Estimated cash disbursements for selling and administrative expenses for the month are $105‚000. * Depreciation for the month is projected at $25‚000. Dewitt is projecting operating income for October 2004 in
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UV0010 NIKE‚ INC.: COST OF CAPITAL On July 5‚ 2001‚ Kimi Ford‚ a portfolio manager at NorthPoint Group‚ a mutual-fund management firm‚ pored over analysts’ write-ups of Nike‚ Inc.‚ the athletic-shoe manufacturer. Nike’s share price had declined significantly from the beginning of the year. Ford was considering buying some shares for the fund she managed‚ the NorthPoint Large-Cap Fund‚ which invested mostly in Fortune 500 companies‚ with an emphasis on value investing. Its top holdings included ExxonMobil
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The Cost of Capital 1 Background As investors desire to obtain the best/highest return on their investments in securities such as shares (Equity) and loans to companies such as debentures (Debt)‚ these returns are costs to the companies paying these Dividends (on equity) and Interest (on Debts)! It all depends on the perspective from which we chose to view the calculation (are we Earning or Paying?) Companies MUST consider the cost of financing they receive in the form of equity or debt if they
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Multinational Cost of Capital Capital Structure‚ Risk and the Cost of Capital for Multinational Companies (1713 words) 2015 Table of Contents Introduction 2 Literature Review 2 Capital Structure‚ Risk and the Cost of Capital for Multinational Companies 2 Criticism to the work and the upstream-downstream hypothesis 2 Conclusion 2 References 2 Introduction “Theoretically‚ MNEs should be in a better position than their domestic counterparts to support higher debt ratios because their cash flows
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Product and Service Costs Output represents one of the most important cost objects. There are two types of output: products and services. Products are goods produced by converting raw materials through the use of labor and indirect manufacturing resources‚ such as the manufacturing plant‚ land‚ and machinery. Televisions‚ hamburgers‚ automobiles‚ computers‚ clothes‚ and furniture are examples of products. Services are tasks or activities performed for a customer or an activity performed by a customer
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objective was to maximize the firm’s cash position relative to the rest of the class. Using 50 days of historical data‚ the team reviewed re-order points‚ re-order quantity‚ capacity‚ lead times‚ and therefore contract terms. The team also weighed the cost of new machines against capital for inventory and interest rates‚ evaluating the return on investment and the impact a new machine had on lead times. Using this consideration set‚ team Honeybadgers purchased one tuning machine‚ one stuffing machine
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Cost-Benefit-Analysis. In order to choose the best strategy that leads to our business goal‚ we ha have conducted Cost-Benefit-Analysis on the offering of Freemium account to potential customers to attract them and lead to buy the Premium Service. We had in mind that searching for and getting new customers for the business is expensive and beneficial. So we decided to invest on building a lasting and profitable business customer base‚ and instill trust into customers by offering an exceptional customer
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entry of low cost carriers. other factors include several macro-level socio economic troubles‚ SARS crisis‚ 9/11 attacks‚ bird flu‚ Asian Tsunami and other terrorism concerns‚ due to this there has been a big impact on airline profit. As market condition is continuously changing‚ it is difficult to predict the future of the airline industry. the overall industry as we see it is in a weak position‚ even though the demand is rising. companies now are providing additional services at low cost and decreasing
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Graduate School of Business Administration University Version 2.0 of Virginia UVA-F-1353 Version 2.0 Nike‚ Inc.: Cost of Capital On July 5‚ 2001‚ Kimi Ford‚ a portfolio manager at NorthPoint Group‚ a mutual fund management firm‚ pored over analyst write-ups of Nike‚ Inc.‚ the athletic shoe manufacturer. Nike’s share price had declined significantly from the start of the year. Kimi was considering buying some shares for the fund she managed‚ the NorthPoint Large-Cap Fund‚ which invested mostly in
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Summary Wanting to add Nike’s share to her portfolio‚ Kimi Ford asked her new assistant‚ Joanna Cohen‚ to estimate Nike’s cost of capital. Cohen‚ later‚ came up with the cost of capital of 8.4% that was contradicted to Ford’s cost of capital of 12%. This report points out flaws of Cohen’s assumption and recalculates the WACC to obtain the most accurate cost of capital. In the cost of equity calculation‚ we will use CAPM‚ the dividend discount model (DDM)‚ and the earnings capitalization model (ECM)
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