Phil and Jill bought a fishing lodge for $750,000. They paid $75,000 down and agreed to make payments at the end of every month for fifteen years. Interest is 6% compounded quarterly.

a) What size payments are the Phil and Jill making every month.

2. b) How much will they owe after ten years?

3. c) How much will they have paid in total after 15 years?

4. d) How much interest will they pay in total?

Loss control activities of a business focus on finding and implementing solutions to reduce the probability of loss (loss prevention) and/or reduce the actual amount of loss (loss reduction), and therefore reduce the total cost of risk to maximize firm profitability.

Loss control techniques have been widely used in environmental loss prevention, catastrophic loss prevention, and employee-related risk management. Many firms face loss exposures caused by using, storing, and transporting hazardous materials, caustic substances, gasses, acids, etc., and may have unique issues posed by deployment of “greener” vehicle fleets using CNG, LNG, and bio-fuel solutions. Catastrophic risks, such as earthquakes, tornado, hurricanes or big fire, also pose significant threat to the property safety and business continuation for firms. Employee behavior-related risks and product safety are also important concern of corporate risk management.

Lack of effective loss control (such as inadequate systems, inadequate standards, and inadequate compliance with safety standards) may cause significant damage to a firm, such as injury costs, property damage, liability damage, bad press, lower sales, loss of employee morale, so on and so forth, as British Petroleum (BP) or Toyota had suffered in the past.

In this project, select an S&P 500 company and analyze its loss control policies focusing on either environmental loss prevention, or catastrophic loss prevention, or employee-related risk management.

Your analysis should address the following questions in the least:

• How likely the firm is subject to catastrophic losses?
• Has the business suffered losses of the kind in the past?
• What losses could be caused to the firm if a catastrophic event occurs?

A. Direct Property Loss

B. Indirect (or consequential) Property Loss

C. Liability Loss

    D. Personnel Loss

     E. Crime

     F. Other Loss Exposures

• What loss control activities has the firm implemented to reduce the loss?
  • E.g. For Property loss control, comment on Facility design and construction, Automatic Sprinkler Protection, Preventative maintenance, Equipment and Process controls and safeguards, Human Element programs, Pre-incident planning and Business continuity planning
  • Proactive Safety procedures vs. Reactive Safety & Recovery policies

5.You decide that you need $88,000 in 10 years in order to make a down payment on a house. You plan to make annual deposits to achieve your goal. If interest rate is 8%, how much should be deposited each time? Hint use the Financial Function “PMT” to solve for the payment and PV will be zero.

6. You owe $46,000 to your parents for funding some of your college. You promise to make 8 annual payments of $8,000 to settle your debt. Approximately what interest rate are your parents charging (estimated up to 2 decimal places), if you make the 8 annual payments beginning one year from now? Hint use the Financial Function “RATE”. Note if you need help use the “Help on this function” feature. This help will include an example for you to follow.

7. You are offered an investment that will pay $36,300 per year for 9 years. If you feel that the appropriate discount rate is 7%, what is the investment worth to you today?

8. Your grandparents offered you some money. You are offered the following options. Assuming an annual interest rate of 5.0%, which option should you choose?

Show your work for each alternative

a. Receive $20,000 immediately

b. Receive $3,200 at the end of each six months for four years. You will receive the first check in six months

c. Receive $2,900 at the end of each year for four years, and then $20,000 at the end of the fifth year.

1. Explain the Safe Harbor rule for delaying an employee bonus.

2. What is the issue in Employee Benefits when Unions are present?

3. Explain why an employee census is important for Employee Benefits planning?

4. Where would severance pay likely show up on an income statement?

What is the financial health of Costco Wholesales using 2 ratios in each category:

LIQUIDITY
CAPITAL STRUCTURE
EARNINGS
What did those ratios tell you (what do they measure)?

Can you tell if the ratio is good or bad (what else might you need to look at or compare it to)?

There is a web advertising company that collects users' data every time they click on a website, post a message on a social app, send an e-mail, or do any online searching. This data is then sold to companies so that they can use it to send customized advertisements to potential customers.

The exercise equipment company you work for is given access to this data, and you are asked to create association rules to identify future customers who are likely to buy the company's new exercise product.

After performing association rules analysis, you discover certain patterns that are very accurate in predicting the likelihood that a customer will buy the new exercise equipment. This discovery is likely to make your company a lot of money and also make you an analysis superstar at your company. At the same time, you realize the web advertising company has been collecting its data using inappropriate, albeit not illegal, means. Even though most consumers realize their online activities are tracked without their express permission, do you consider this ethical? Does the fact that the product the exercise company wants to sell is one that can benefit the customer? Justify your opinions with specific business examples.

Betas and risk rankings   Personal Finance Problem   You are considering three stocks A, B, and C — for possible inclusion in your investment portfolio. Stock A has a beta of 1.5, stock B has a beta of 1.2, and stock C has a beta of −0.3.

a. Rank these stocks from the most risky to the least risky.

b.  If you believed that the stock market was getting ready to experience a significant decline, which stock should you add to your portfolio?

c.  If you anticipated a major stock market rally, which stock would you add to your portfolio?

a.  Which stock is the most risky one? (Select the best answer below.) A. Stock Upper AStock A B. Stock Upper BStock B C. Stock Upper C

Rate of return, standard deviation, coefficient of variation  Personal Finance Problem 

  Mike is searching for a stock to include in his current stock portfolio. He is interested in Hi-Tech Inc.; he has been impressed with the company's computer products and believes Hi-Tech is an innovative market player. However, Mike realizes that any time you consider a technology stock, risk is a major concern. The rule he follows is to include only securities with a coefficient of variation of returns below 1.25. Mike has obtained the following price information for the period 2015 through 2018:

Beginning End

2015 $14.94 $20.04

2016 $20.04. $64.87

2017 $64.87. $72.91

2018 $72.91. $90.21

Hi-Tech stock, being growth-oriented, did not pay any dividends during these 4 years.

a.  Calculate the rate of return for each year, 2015 through 2018, for Hi-Tech stock.

b.  Assume that each year's return is equally probable and calculate the average return over this time period.

c.  Calculate the standard deviation of returns over the past 4 years.   (Hint: Treat this data as a sample.)

d.  Based on b and c determine the coefficient of variation of returns for the security.

e.  Given the calculation in d what should be Mike's decision regarding the inclusion of Hi-Tech stock in his portfolio?

V’s Warehouse has a market value of $880,000. The property in V’s area is assessed at 35% of the market value. The tax rate is $58.90 per $1,000 of assessed value. What is V’s property tax? (Round your answer to the nearest cent.)

For the best terms on a loan or credit card, you need a credit score above 700. To achieve this, start establishing credit now. Pay all of your bills on time. In addition, use only one-third of your available credit limit and pay off your revolving balance(s) each month. R. J. Johnson has excellent credit. She wants to purchase a piece of equipment for her business and was offered 7% for 72 months for the $49,000 unit.

What is her monthly payment by add-on method? (Round your answer to the nearest cent.)

Lego Corporation is planning on replacing all of its copiers and has decided on a model manufactured by Xerox. Lego has been offered a five-year lease, including all maintenance, for $1,000 per year for each copier. Lego has a tax rate of 25%, which results in an after-tax cost of leasing of $750 per year. Lego is also considering purchasing the machines and wants to know the annual cost of purchasing so they can compare it to the $750 after-tax cost of leasing. Each copier would have a cost of $2,500 and be depreciated straight-line over five years. A maintenance agreement would run $500 per year. Paper and toner use would be identical, regardless of whether the copiers are leased or purchased and the copier has no salvage value at the end of five years. With Lego’s 25% tax rate and a required rate of return of 9%, calculate the EAA/EAC. Should they purchase or lease?

Solve with excel and show work

Answer Choices:

$3,472.41

-$892.73

$566.88

-$355.78

Tropical Charters, based in the Bahamas, runs multi-day fishing charters for wealthy anglers. They have been very successful in their first five years in operation and Brian (the owner) is considering adding a second boat. A new 80’ Viking would cost $5,000,000 with another $1,000,000 needed to upgrade the interior to a level that would attract the wealthy clients they desire. The boat would be depreciated straight-line over 15 years, but would be sold at the end of five years, for an estimated $5,000,000. The new boat would generate estimated additional revenue of $2,000,000 per year and would have associated expenses of $625,000. No additional working capital would be necessary. The firm’s tax rate is 30% and the required rate of return is 12%. Calculate the NPV. Should the new boat be purchased?

Solve all three capital budgeting problems on one spreadsheet

Blazer Video Production is a producer of commercials and corporate information videos. They have a high-tech studio with multiple high-intensity lights. Blazer is considering switching out the lights for more energy efficient LED lights, which do not generate the tremendous amounts of heat that the current lights put out and do not require frequent bulb replacements. The new lights would cost $10,000 and would be depreciated straight-line over their five-year useful life and are expected to have no salvage value. The existing lights were purchased for $8,000 five years ago and were being depreciated straight-line over their ten-year useful life and were not expected to have any salvage value. The old lights had a longer life expectancy because of the frequent bulb replacement. The existing lights could currently be sold for $4,000. The lights are not expected to change revenues at all, but will save $2,000 per year in electricity and bulbs. The firm’s tax rate is 25% and the required rate of return is 10%. Calculate the IRR. Should Blazer purchase the replacement lights? Hint: Remember to include the difference in annual depreciation in your cash flows.

consider the differing means of debt financing available (or emerging) that may be involved in business performance and decision-making (Ch. 26, 27, 30, 31).

• What are the legal rights, responsibilities, and liabilities of parties involved with negotiable instruments, secured transactions, and debtor-creditor relationships?
• What steps should be taken to account for and safeguard a company’s rights and track its responsibilities in such relationships?