how important is the distance ( to final and source markets ) is to businesses operating internationally today? (500 words essay)

         Adam Smith is often called the father of economics. His famous book, The Wealth of Nations, talks about an “invisible hand” that automatically allocates goods to the persons best able to put them to good use. The invisible hand operates through the price mechanism for goods and services, so that individuals who trade on the market, while seeking only their own good, actually allocate society’s resources efficiently.

Applied to modern capital markets, his ideas would imply that these markets would efficiently allocate investment capital to the firms that would use them most efficiently in producing goods and services for society—but only if they were left to operate without state intervention.

What benefits would be created if modern governments reduced financial regulations substantially in accordance with Smith’s thinking? From an ethical perspective, what societal costs might be created?

1) Lucy wants to buy a house. The house costs $825,000. She will make a 20% down payment. She will have a 30-year mortgage at an interest rate of 5%.

a) Make an amortization schedule for the first 6 payments (not years) of her loan. Make sure your amortization table has the following columns (in this order): beginning balance, payment, interest, principal reduction, and ending balance. (Make sure you round to the nearest cent, not dollar!)

b) Assuming she follows her amortization schedule, what will be the total interest she will pay for her home after 30 years? Show calculations.

2) Lucy wants to retire comfortably. She wants to have 10 million dollars by the time she retires in 30 years.

a. How much money does Lucy need in her account today in order to have 10 million dollars in 30 years? She can earn 6% interest, compounded annually.

b. If Lucy were to make year-end payments to her account for the next 30 years, what would her payment amount have to be in order to have the 10 million dollars in 30 years, @ 6% interest, compounded annually?

3) Mary makes $16,000 a month (gross). She is married and claims 5 exemptions. Her state income tax withholding is 5%. (Use the text’s limit for social security, for parts a-c.)

a. What is Mary’s net pay for January? (After ALL taxes and withholdings…don’t forget SS, Med., FIT…) Show each tax/withholding amount (list Gross, then list each tax subtracted out to get net pay).

b. What is Mary’s net pay for September? (Not cumulative, JUST September’s net pay.)

c. What are Mary’s total taxes paid/withheld for the year? (Specify amounts for each tax.)

d. What is the current year’s income limit (base) for social security and maximum social security tax payable (in dollar amount)?

4) Pick two companies and track their stocks for three trading days (not weekends or holidays). You can find their stock information on the internet or in a newspaper. Tell me: the company’s name, their symbol, what stock market they are trading on, their high and low for the past year, what their dividend per share was last year, their closing price each day and what their price earnings ratio was for those days (show the calculation).

5) Find the consolidated financial statements for Garmin Ltd and Subsidiaries for the year ended December 29, 2018 and compute the following ratios: current ratio, debt to assets ratio, and return on equity ratio. (Form 10-K, search online). Show your calculations to earn credit. What might these ratio’s show about this company?

6) Pick two “Personal Finance, A Kiplinger Approach” or My Money articles from the textbook. (They are at the end of each chapter.) For each article you pick, write a one to two paragraph summary of the article and another paragraph on your thoughts/opinion/insights and items learned from reading the article. Indicate page number and which chapter the article is from.

You are evaluating a project for your company. You estimate the sales price to be $300 per unit and sales volume to be 4,000 units in year 1; 5,000 units in year 2; and 3,500 units in year 3. The project has a three-year life. Variable costs amount to $150 per unit and fixed costs are $200,000 per year. The project requires an initial investment of $231,000 in assets which will be depreciated straight-line to zero over the three-year project life. The actual market value of these assets at the end of year 3 is expected to be $40,000. NWC requirements at the beginning of each year will be approximately 10 percent of the projected sales during the coming year. The tax rate is 30 percent and the required return on the project is 10 percent. What is the operating cash flow for the project in year 2?

What do you think is a better method for a company to add another company merge or acquisition and why?

The case states that Space-Age’s optimal capital structure calls for 20 percent long-term debt and 80 percent common equity. However, according to the 1992 balance sheet, the firm’s capitalization ratio is Long-term debt/Total permanent capital = $12,570,000/($12,570,000 + $17,490,000 + 11,310,000) = 0.304 = 30.4 percent, and its total-debt-to-total-assets ratio is $15,540,000/$44,340,000 = 35.1 percent. Do these figures indicate that the capital structure is seriously out of balance, that the company is using far too much debt, and that you should modify the mix of debt and equity used in the forecasts? (Hint: Think about whether the optimal capital structure should be stated in book value or market value terms.)

1)

Depreciation for a profitable firm

A: decreases both operating and net income.

B: increases the net fixed assets as shown on the balance sheet.

C: reduces both the net fixed assets and the costs of a firm.

D: is a non-cash expense which increases the net operating income.

E: decreases net fixed assets, net income, and operating cash flows.

2) For a growing firm, the change in net working capital is generally:

A: positive.

B: negative.

C: highly erratic.

D: highly negative.

E: equal to zero.

3)The accounting statement of cash flows consists of the cash flows from:

A: operations, investing activities, and financing activities.

B: operations, investing activities, and divesting activities.

C: internal activities, external activities, and financing activities.

D: balance sheet accounts only.

E: income statement accounts only.

4) Total equity is $1,620, fixed assets are $1,810, long-term debt is $650, and short-term debt is $300. What is the amount of current assets?

A: $760

B: $360

C: $1,140

D: $480

E: $790

5) Brewster Mills has total revenues of $684,350, costs of goods sold of $472,500, net income of $11,520, and average inventory of $91,600. What is the days' sales in inventory?

A: 69.84 days

B: 70.76 days

C: 71.51 days

D: 5.16 days

E: 4.08 days

6) Using the internal rate of return method, a conventional investment project should be accepted if the internal rate of return is:

A: equal to, and only if it is equal to, the discount rate.

B: equal to or greater than the discount rate.

C: less than the discount rate.

D: negative.

E: positive.

Consider a firm whose only asset is a plot of vacant land, and whose only liability is debt of $15 million due in one year. If left vacant, the land will be worth $10 million in one year. Alternatively, the firm can develop the land at an upfront cost of $20 million. The developed land will be worth $35 million in one year. Suppose the risk-free interest rate is 10%, assume all cash flows are risk-free, and assume there are no taxes.

a) If the firm chooses not to develop the land, what is the value of the firm’s equity today? What is the value of the debt today?

b) What is the NPV of developing the land?

c) Suppose the firm raises $20 million from equity holders to develop the land. If the firm develops the land, what is the value of the firm’s equity today? What is the value of the firm’s debt today?

Please can you explain how you got your answer, thank you :)

Suppose A Company accepts all projects with payback periods less than 3 years. State which project(s) the company should undertake based on this policy and determine the total NPV from following this policy.

Financial intermediaries are often given credit for reduction in transaction costs and information asymmetry.
How they manage to do it?
Do the customers benefit from reduced transaction costs?
In what way?

Suppose you take out a 20-year mortgage for a house that costs $375,467. Assume the following:

• The annual interest rate on the mortgage is 5%.
• The bank requires a minimum down payment of 17% at the time of the loan.
• The annual property tax is 1.6% of the cost of the house.
• The annual homeowner's insurance is 1.1% of the cost of the house.
• The monthly PMI is $51
• Your other long-term debts require payments of $762 per month.

If you make the minimum down payment, what is the minimum gross monthly salary you must earn in order to satisfy the 28% rule and the 36% rule simultaneously?

The sales budget for your company in the coming year is based on a quarterly growth rate of 10 percent with the first-quarter sales projection at $165 million. In addition to this basic trend, the seasonal adjustments for the four quarters are 0, −$12, −$6, and $18 million, respectively. Generally, 50 percent of the sales can be collected within the quarter and 45 percent in the following quarter; the rest of the sales are bad debt. The bad debts are written off in the second quarter after the sales are made. The beginning accounts receivable balance is $84 million. Assuming all sales are on credit, compute the cash collections from sales for each quarter. Enter your answers in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and shows all the formula and steps.