Chapter 8. Mini-Case Assume that you have just been hired as a financial analyst by Triple Play Inc.‚ a mid-sized California company that specializes in creating high-fashion clothing. Because no one at Triple Play is familiar with the basics of financial options‚ you have been asked to prepare a brief report that firm’s executives can use to gain a cursory understanding of the topic. To begin‚ you gathered some outside materials on the subject and used these materials to draft a list of pertinent
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exercise price. In this case‚ option B’s premium price is lower. The trade off is between a lower exercise price‚ higher premium price‚ option A‚ that better hedges against the yen if it were to appreciate in value (exercising the option) and a higher exercise price‚ lower priced premium that reduces cost if the hedge does not appreciate in value (the option is not exercised). 2.Should Blades allow its yen position to be unhedged? Describe the tradeoff. The case stated that “the futures
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1. What appears to be the problem areas in the Hobby Horse Company? The problem with Hobby Horse Company is that they were having a tough year throughout 2011. The company has $45 million loan that is due at the end of September‚ however the company does not have the means to cover the cost of the loan. Looking at the financial statement the company has fairly high leverage where their equity is not as strong. In addition‚ their current assets don’t cover current liabilities—meaning that the company
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income? The $300‚000 is considered to be earned income for John Smith and therefore will be reported as part of your gross income on the LLC return or on your individual income. The reason that it can be on either would be because of the variance in state laws. 1(b) How is the $25‚000 treated for purposes of Federal tax income? The $25‚000 you received as an advanced for expenses two years ago are considered as income. The advance would not have been considered as a deductible expense behind the
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Executive Review Porsche is a company that prides itself in quality and customer satisfaction. Because of this customers are always considered to be first priority for the company. The only issue with this business method is that the shareholders do not feel valued. Porsche operates more like a family-owned firm instead of focusing mainly on shareholder value. While operating like a family-owned firm may be admired by some‚ it also has a downside. The company has been somewhat infamous for occasional
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the play‚ Shakespeare uses subtle symbols to show his opinion of human nature. An example of this symbolism are the caskets of Belmont. Physically a device to determine the husband of Portia‚ the caskets give a concrete representation of the personalities of the characters. The gold casket states‚ “Who chooseth me shall gain what many men / desire” (II.vii.5-6) and states that men most desire aesthetics. The silver inscription delivers‚ “Who chooseth me shall get as much as he / deserves” (II.vii
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successful in the United States. Since the sociological differences between the United States and Canada were not that great this enabled Wal-Mart to be able to make their Canadian venture successful. In Latin America Wal-Mart chose to use a different mode of entry to achieve success. Wal-Mart chose to enter Latin America in Mexico first with a 50-50 joint venture with Cifra so it could overcome “the substantial differences in culture and income between the United States and Mexico”. This venture
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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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Cast Brian Smith – CIO John Johnson – CEO Stan Abrams – CFO Fred Tompkins – Head of Manufacturing (Most powerful executive lel) Harriet Simpson – VP of HR Brenda Barnes – VP of Marketing Ted Kwok – VP or R&D 1. What are the issues with current IT planning process? Budget given is equal to 2% of revenue Budget might fluctuate depending on actual revenue Budget for new infrastructure and initiatives/strategies are basically leftovers after the maintenance cost/keeping the lights on. As
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"Why do I keep this around?" Martin Drysdale wondered. "It infuriates me every time I see all that satisfaction over something that is now the bane of my existence." He looked gloomily at the offending photo which showed the project team happily "clinking" pop cans and coffee cups in a toast: "Here’s to TUFS!" The Technical Underwriting Financial System (TUFS) was the largest single investment in IT ever made by Northern Insurance‚ and it was going to transform Northern by streamlining the underwriting
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