a. Should Caledonia focus on cash flows or accounting profits in making its capital-budgeting decisions? Should the company be interested in incremental cash flows‚ incremental profits‚ total free cash flows‚ or total profits? Caledonia should focus on cash flows‚ not accounting profits. Free cash flows are able to be reinvested‚ whereas accounting profits are shown when they are earned‚ not when the cash is actually received. The company should be interested in incremental after-tax cash flows
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1. Tom believes the company should use the extra cash to pay a special one-time dividend. How will this proposal affect the stock price? How will it affect the value of the company? Electronic Timing‚ Inc. (ETI) needs to be careful on how it dispenses the extra cash as a dividend. Issuing the extra cash as a dividend would mean that the shareholders collectively will probably drop by the same amount because of the transfer of wealth from the company to the shareholders individually. Hence‚ the
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24. We can use the debt-equity ratio to calculate the weights of equity and debt. The debt of the company has a weight for long-term debt and a weight for accounts payable. We can use the weight given for accounts payable to calculate the weight of accounts payable and the weight of long-term debt. The weight of each will be: Accounts payable weight = .15/1.15 = .13 Long-term debt weight = 1/1.15 = .87 Since the accounts payable has the same cost as the overall WACC‚ we can write the equation for
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Applications of option pricing in corporate finance Option pricing is used in four major areas of corporate finance: • Real Options Suppose a company has a 1-year proprietary license to develop a software application for use in a new generation of wireless cellular telephones. Hiring programmers and marketing consultants to complete the project will cost $30 million. The good news is that if consumers love the new cell phones‚ there will be a tremendous demand for the software. The bad news
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Sarah Haynes Dr. Christerson Honors Biology 9D 11 April 2015 10.1 Assessment 1a. Identify two reasons why a cell’s growth is limited. The larger a cell becomes‚ the more demands the cell places on its DNA. In addition‚ a large cell is less efficient in moving nutrients and waste material across the membrane. 1b. As a cell’s size increases‚ what happens to the ration of its surface area to its volume? As a cells size increases‚ the volume increases more than the surface area. However‚ the ratio
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Every person is different in his or her behavior‚ feelings and the way of thinking. These unique characteristics formulate personality. Some people are easy-going‚ fun-loving; the others are aggressive‚ powerful and decisive. Researchers-psychologists‚ Don Riso and Russ Hudson‚ created very interesting and observing questionnaire called Enneagram and wrote a book called “The wisdom of Enneagram”. Enneagram helps to indicate the type of personality of the person. It shows which of the good qualities
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Section 9-1 Review Key Ideas 1. Identify the primary source of energy that flows through most living systems The sunlight. Autotrophs use sunlight to make their own food. Organisms that can’t make their own food consumed the food molecules made by autotrophs‚ eat autotrophs or eat organisms that consumed autotrophs. 2. Explain how an organism’s metabolism is related to Earth’s carbon cycle. An organism’s metabolism is related to using energy to build organic molecules which contain
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SPH 2241 – Fundamentals of Speech (Stiefel) CHAPTER 7 ASSIGNMENT Student Name: Below are arguments based on faulty reasoning. Identify the fallacy used (use a fallacy only ONCE): 1. Loaded Words It’s ridiculous to worry about protecting America’s national parks against pollution when innocent people are being attacked by terrorists. 2. Red Herring The proposal is likely to be resisted by the business-as-usual bureaucrats on Capitol Hill. 3. Celebrity Endorsement Queen Latifah promotes Cover
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Internet Mini Case #2 Tech Data Corporation Maryanne M. Rouse The Company TECH DATA CORPORATION’S (TECD) AGGRESSIVE GROWTH HAD TAKEN THE COMPANY from 10 employees and $2 million in sales in 1983 to approximately 8‚000 employees and $15.7 billion in sales for fiscal 2002 (fiscal year ended January 31‚ 2003) and secured the company’s position as a leading distributor of information technology (IT)‚ logistics management‚ and other value-added services to “solution providers‚” including value-added
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CASE 10 : LINCOLN ELECTRIC PRINCIPLE OF MANAGEMENT LECTURER : SUBMISSION DATE : NAME Background of the case Question 1 Does Lincoln follow a hierarchical or decentralized approach to management? Explain your answer and give examples. Answer: Lincoln follows a decentralized approach to management. The company han an open-door policy for all top executives‚ middle managers‚ and production workers‚ and regular face-to-face communication
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