Working Capital Exercises – Part 2 1. Lewis Enterprises is considering relaxing its credit standards to increase its currently sagging sales. As a result of the proposed relaxation‚ sales are expected to increase by 10% from 10‚000 to 11‚000 units during the coming year; the average collection period is expected to increase from 45 to 60 days; and bad debts are expected to increase from 1% to 3% of sales. The sales price and variable cost per unit are P40 andP11‚ respectively. The firm’s required
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raising capital * Disadvantages * Double taxation * Cost of set-up and report filing * Conflicts between Managers and Stockholders * Managers are naturally inclined to act in their own best interests (which are not always the same as the interest of stockholders). * But the following factors affect managerial behavior: * Managerial compensation packages * Direct intervention by shareholders * The threat of firing * The
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+ $150 + $100 + $50) - $340 = $110 million. b) What is the impact over the next three months on net interest income if interest rates on RSAs increase 50 basic points and on RSLs increase 60 basic points? a. ΔII = ($150m. + $150m.)(.005) = $1.5m. b. ΔIE = $340m.(.006) = $2.04m. c. ΔNII = $1.5m. – ($2.04m.) = -$.54m. c) What is the impact over the next two years on net interest income if interest rates on RSAs increase 50 basis points and on RSLs increase 75 basis points? a. ΔII = ($150m. + $150m
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Simulation Review HCS483-Health Care Financial Accounting Simulation Review When working as a health care administrator‚ one must make important financial decisions that can make or break the future of the organization. To give students a peak into some of these financial decisions‚ online simulations are used. This is the breakdown of one such simulation. The simulation in question deals with the Elijah Heart Center in New York State. The simulation
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CERTIFICATION This academic report is a product of SANDRINE NJEMO NKA’A from an industrial training program at N ATIONAL PORT AUTHORITY CREDIT UNION LEAGUE [NPACCUL] for the period of August 1 to September 30. This report has been carefully developed in accordance to the conditions and criteria that satisfy the award of B.SC Accounting Degree from the Catholic University Of Bamenda Cameroon [CATUC]. Signature; ………………………………… ……………………………… The Manager NPACCUL
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Malaysia is supported by two crucial finance; i.e. Bridging Finance and End Finance. Bridging finance is a loan amount provided to the developer on top of any other loan obtained for the project. It is usually given as a short period with higher interest rate subject to security provided‚ and usually provided after the planning approval or at the end of the completion of the construction works of the project. Bridging finance is available in various forms; i.e. ‘term loan’ with a fixed repayment
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that AirJet Parts‚ Inc. is considering loans from National First and Regions Best‚ what are the EARs for these two banks? Hint for National Bank: Go to the St. Louis Federal Reserve Board’s website (http://research.stlouisfed.org/fred2/). Select “Interest Rates” and then “Prime Bank Loan Rate”. Use the latest MPRIME. Show your calculations. (15 pts) EAR= [1+ (APR/m)] m-1 National First- EAR: (1-[.0325+.0675]/2)^2 – 1 = 1+ (.1/2) = 1.05^2= 1.1025- 1= .1025 or 10.25% Regions Best- EAR: (1 + [.1317/12]
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1. Are the four components of Marriott’s Financial Strategy consistent with its growth objective? Marriott’s sales grew up by 24% and its return on equity stood at 22% in the year 1987‚ the sales and earnings per share has doubled over the previous year as stated in the case study. The company operates in three divisions: lodging‚ contract services and restaurants which represents 41%‚ 46% and 13% of sales in 1987 respectively. Marriott is determined to develop and to enhance its position in each
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risk management? What recent activities by FIs have made the task of credit risk assessment more difficult for both FI managers and regulators? Credit risk management is important for FI managers because it determines several features of a loan: interest rate‚ maturity‚ collateral and other covenants. Riskier projects require more analysis before loans are approved. If credit risk analysis is inadequate‚ default rates could be higher and push a bank into insolvency‚ especially if the markets are
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are planted‚ what will be the average rate of return on the investment? What will be the rate of return on the marginal investment? (e) If a capital market exists‚ and the rate of interest is 33 31 %‚ what will be your optimal investment? (f) If you have no corn at date 0‚ a capital market exists (33 13 % rate of interest)‚ and you invest optimally‚ what is your equity in the venture? What will be your optimal consumption plan? Outline your sources and uses of funds for date 0 and date 1. (g) Will
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