Why is working capital a particularly important area of concern for financial managers?

At least 200 words.

Financial risk is an important concept for any healthcare manager. The manager must understand how the various aspects of risk impact the organization’s potential access to capital for much needed investments. For this discussion, explain what financial risk is. Also, discuss how businesses and investors view risk. Provide an example that an organization might face. Lastly, discuss the terms stand alone and portfolio risk. In your opinion, is one more impactful to the organization than another?

Pick a federal agency of your choice. Find that agency’s appropriation for a recent fiscal year. That may be located in an annual appropriation act or in a consolidated appropriation bill that lumps a number of normal appropriation acts together. Are there provisions of a somewhat substantive nature that are included in the appropriation act?

1. Name and explain three tricks that management can play to manage earnings. Explain how using financial ratios can help spot these tricks.

2. Why is it important to analyze profitability, specifically focusing on return on investment? Invoke the breakdown of ROI in thinking about your response.

The value of HILEV firm at the end of one year can be $50 m or $100 m with equal probability of 0.5. The firm has debt with a face value of $50 m that matures in one year. Assume that investors are risk-neutral and the risk free rate is zero. The CEO of the firm decides to substitute assets of the firm with more risky assets immediately, so that the value of the firm at the end of one year is either $30 m or $120 m with equal probability of 0.5. This asset substitution will lead to

A gain of $10 million for stockholders and a loss of $10 million for bondholders

b. A loss of $10 million for stockholders and a gain of $10 million for bondholders

c. No gain or loss to debtholders or equity holders

d. Both debtholders and equity holders will lose $10 million from the increased risk of the business

* I answered C and it was incorrect

Looking back on 4 March 2008 when the interest rate was set at 7.25% by RBA (Reserve Bank Australia), however since then RBA gradually reduced the interest rate to its lowest 1% on 3 July 2019. Present an overview on the expectations or motivations behind such interest rate cut by RBA? (summary) [Note: In the early 1990s the interest rate was 17.5%, you don’t need to go back such distant past, your analysis should focus between 2008 to 2019] Talk about the impact on the economy after the interest rate changed. Summary of 400 words

Can you please help me with this overview? It is for my work

3-4 There are four countries (Japan, Sweden, Denmark and Switzerland) have negative interest rates. What could be the expectations/ motivations to drop interest rate below zero? Mention how it will affect the country’s growth and how it affects each country individually.

Could you please give me a summary of the solution to each question so that I may expand on this. It is for my current job

An Apple annual coupon bond has a coupon rate of 6.9%, face value of $1,000, and 4 years to maturity. If its yield to maturity is 6.9%, what is its Modified Duration? Answer in years, rounded to three decimal places.

Part 1: Assume that the average variance of return for an individual security is 50 and that the average covariance is 10. What is the expected variance of an equally weighted portfolio of 5,10,20,50, and 100 securities?

Part 2: In part 1, how many securities need to be held before the risk of a portfolio is only 10% more than minimum?

Explain how a company may utilize a net capital loss for tax purposes.

After this is explained, give an example you’ve seen or read.

Provide your reference.

The $800 million loan carried a 6% interest rate and had the following repayment of principal schedule:

Year 1: $132 million

Year 2: $32 million

Year 3: $57 million

Year 4: $82 million

Year 5: $82 million

Year 6: $415 million

What is the present value of the term loan? What would the present value be if the compnay had chosen permanent debt instead of a term loan?

In December 2019, Bob Prescott, the controller for the Blue Ridge Mill, was considering the addition of new on-site long-wood woodyard. The addition would have two primary benefits: to eliminate the need to purchase short-wood from an outside supplier and create the opportunity to sell short-wood on the open market as a new market for Worldwide Paper Company (WPC). The new woodyard would allow the Blue Ridge Mill not only to reduce its operating costs but also to increase its revenues. The proposed woodyard will utilise new technology that allows tree-length logs, called long-wood, to be processed directly, whereas the current process required short-wood, which had to be purchased from the Shenandoah Mill. This nearby mill, owned by a competitor, has excess capacity that allows it to produce more short-wood than it needs for its own pulp production. The excess is sold to several different mills, including the Blue Ridge Mill. Thus, adding the new long-wood equipment would mean that Prescott would no longer need to use the Shenandoah Mill as a short-wood supplier and that the Blue Ridge Mill would instead compete with the Shenandoah Mill by selling on the short-wood market. The question for Prescott was whether these expected benefits were enough to justify the $18m capital outlay plus the incremental investment in working capital over the six-year life of the investment. Construction would start within a few months, and the investment outlay would be spent over two calendar years: $16m in 2020 and the remaining $2m in 2021. When the woodyard begins operating in 2021, it would significantly reduce the operating costs of the mill. These operating savings would come mostly from the difference in the cost of producing short-wood on-site versus buying it on the open market and were estimated to be $2m for 2021 and $3.5m per year thereafter. Prescott also planned on taking advantage of the excess production capacity afforded by the new facility by selling short-wood on the open market as soon as possible. For 2021, he expected to show revenues of approximately $14m, as the facility came on-line and began to break into the new market. He expected shortwood sales to reach $20m in 2022 and continue at the $20m level through 2026. Prescott estimated that the cost of goods sold (before including depreciation expense) would be 75%. In addition to the capital outlay of $18m, the increased revenues would necessitate higher levels of inventories and accounts receivable. Therefore the amount of working capital investment each year would equal 15% of incremental sales for the year. At the end of the life of the equipment, in 2026, all the networking capital on the books would be recoverable at cost fully. Taxes would be paid at a 30% rate, and the equipment depreciation is to be calculated on a straight-line basis over the six-year life to zero balance. However, the new equipment is estimated to have a salvage value (scrap value) of $3m at the end of its life. WPC’s accountants have told Prescott that depreciation charges could not begin until 2021, when all the $18m had been spent and the equipment is in service. WPC has a company policy to use 15% as the hurdle rate for such investment opportunities. The hurdle rate is based on the study of the company’s cost of capital conducted 5 years ago. Required:

a. Outline reasons why Prescott may be uneasy using the 15% hurdle rate for a discount rate.

b. Perform a sensitivity analysis on NPV of the project on the following scenarios :

(i) Sales increases/decreases by 10%.

(ii) Cost of capital increases/decreases by 10% . Comment on the feasibility of the project under each scenario. c. The global paper and pulp industry, one of the world largest industries, has been grow ing slowly, at a rate much less than expected over the last 20 years. The price chart below show s that the Products Industry Index on average grew at around 2.5% per year over the last 20 years , while lumber futures contract prices have negative growth. Some analysts believe that the industry needs more structural change to counter disruption of technology and tackle social impacts due to climate change. Identify and analyze three qualitative risk factors (ie . factors which are unquantifiable at present) faced by the industry. How would Bob Prescott consider these factors in evaluating the feasibility of the new on - site long - wood woodyard ?