A factory costs $860,000. You reckon that it will produce an inflow after operating costs of $176,000 a year for 10 years.

a. If the opportunity cost of capital is 12%, what is the net present value of the factory? Answer: $134,439.25

b. What will the factory be worth at the end of nine years?

No idea

You must evaluate a proposal to buy a new milling machine. The base price is $128,000, and shipping and installation costs would add another $20,000. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $57,600. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The machine would require a $3,000 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, but pretax labor costs would decline by $42,000 per year. The marginal tax rate is 35%, and the WACC is 11%. Also, the firm spent $5,000 last year investigating the feasibility of using the machine.

1. How should the $5,000 spent last year be handled?
   1. Only the tax effect of the research expenses should be included in the analysis.
   2. Last year's expenditure should be treated as a terminal cash flow and dealt with at the end of the project's life. Hence, it should not be included in the initial investment outlay.
   3. Last year's expenditure is considered as an opportunity cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.
   4. Last year's expenditure is considered as a sunk cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.
   5. The cost of research is an incremental cash flow and should be included in the analysis.
   
   -Select-IIIIIIIVV

2. What is the initial investment outlay for the machine for capital budgeting purposes, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent.
   $

3. What are the project's annual cash flows during Years 1, 2, and 3? Round your answer to the nearest cent. Do not round your intermediate calculations.

   Year 1 $

   Year 2 $

   Year 3 $

4. Should the machine be purchased?

PV AND LOAN ELIGIBILITY You have saved $5,000 for a down payment on a new car. The largest monthly payment you can afford is $300. The loan will have a 12% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the most expensive car you can afford if you finance it for 60 months? Do not round intermediate calculations. Round your answer to the nearest cent.

how I can do the Operational feasibility for the new business as a  retail store

After completing your feasibility report a bout your new Business as a retail store what is your biggest THREAT and why do you think you can overcome it? explain in detail

A Day in the Life of a Contracts Analyst at Cargill

Glynis Gallagher works as a contracts analyst at Cargill Risk Management, which is a business unit within Cargill. Based in Wayzata, Minnesota, Cargill celebrated its 150th anniversary in 2015. Cargill is a truly global company: With operations in more than 60 countries, it markets food, agricultural, financial, and industrial products and services to customers worldwide. The company is one of the world’s top grain traders. In addition, it has global beef operations, and it does business in starches and sweeteners as well. Cargill also processes steel and de-icing salt. Its revenues totaled $109,699 billion in 2017, making Cargill the largest privately owned company in the United States.

Cargill is committed to feeding the world in a responsible way, while also reducing its environmental impact and improving the communities where its employees live and work. Writing in the introduction to his 1979 book Merchants of Grain, author Dan Morgan noted:

Grain is the only resource in the world that is even more central to modern civilization than oil. It goes without saying that grain is essential to human lives and health.… As America became the center of the planetary food system, trade routes were transformed, new economic relationships took shape, and grain became one of the foundations of the postwar American Empire.

Today, as the saying goes, “You can’t walk down the grocery aisle without seeing something Cargill has been involved with in one way or another.” A recent article in Forbes described the scope of the company’s operations:

Cargill, the $135 billion (fiscal year 2014 sales) family-owned food behemoth dominates all roads between the world’s farms and your dinner plate.… Since the company was founded in 1865, the core of its business has always been trading commodities—buying, storing, shipping and selling the crops farmers grow around the world.

Commodities processing is a high-volume, low-margin business; Cargill crushes large quantities of soybeans each day. Because the company is privately held, Cargill can pursue long-term investment opportunities in many global markets. For example, it has had a major presence in India and other emerging markets for decades. The company has made large investments in cocoa, sugar, and food innovation.

The career path of Greg Page, former Cargill CEO and current executive chairman, shows the range of job opportunities Cargill offers its employees. After graduating from college, Page took a trainee position in the Feed Division. In subsequent years, he held a number of positions in the United States and Singapore. He was also involved with the startup of a poultry processing facility in Thailand. Today, Cargill exports roughly 100 million metric tons of chicken from Thailand every year.

Gallagher graduated from a large Midwestern university in 2012 with a major in marketing. She spent fall semester of her senior year studying in northern Italy. Many of her business courses helped prepare her for her current role. She recalls, “Although I never took a course focused on derivatives and trading exclusively, my math and finance courses gave me a solid foundation in order to understand portfolio exposures, fee schedules, and financing options we utilize every day. My marketing courses have allowed me to use this data in a more customer-focused approach on a daily basis.”

Cargill Risk Management is part of Financial Services, one of Cargill’s six platforms that comprise 65 business units. Cargill, through Cargill Risk Management, is a registered limited designation swap dealer with the U.S. Commodities Futures Trading Commission (CFTC). Gallagher must make sure that everything she does for customers complies with CFTC swap dealing guidelines. Cargill and other commodities trade houses are industry members of the Commodity Markets Council, a trade group that serves as a liaison between companies and the government.

Gallagher is a contracts analyst. She says, “I have always been interested in law. Becoming a contracts analyst in such a regulated industry allowed me to gain exposure to contractual language, legal requirements, and the regulatory environment. For example, if you do not set up a contract properly, you are opening yourself up to unnecessary risk.” As Gallagher explains, “In today’s highly regulated and changing business environment, it is essential to protect yourself while completing business transactions. Being part of this facet of the business is a daily challenge. It pushes me outside of my comfort zone to understand a basic question—namely, what is the true risk here for Cargill?”

As noted previously, Cargill Risk Management is a limited designated swap dealer. What’s a “swap”? Swaps, also known as over-the-counter (OTC) transactions, can be complex financial structures that derive their value from something else—a futures contract, for example. Swaps are traded in direct negotiation between buyer and seller; they represent a $700 trillion market. Who uses swaps? Gallagher’s business unit services a variety of customers, including farmers, major airlines, food companies, investment funds, oil companies, and many others.

Gallagher’s business unit works with its customers to provide commodities hedges through swaps and structured products. The commodities in question are often agricultural commodities such as grains (e.g., corn, wheat, and soybeans), as well as beef and other animal proteins. Cargill also deals in metals and energy. Hedging is a financial strategy that allows a customer to lock in the price for a specific commodity purchase in the future. An important part of Gallagher’s job is to work diligently to understand customers’ business objectives, and to ensure contractual terms are aligned with these strategies. The Cargill team assists customers by creating tailored risk management solutions to reduce risks and uncertainty by having more diversified hedging portfolios.

Consider the following example: When a large restaurant chain purchases cooking oil, it must manage budgets and margins to ensure profitability. When the price of oil seeds—a commodity—increases, the company needs to find a way to offset this increase instead of passing along the cost to its customers in the form of higher prices. Of course, market volatility and cost swings are difficult to predict—so how is the restaurant chain able to do this? Helping customers answer this question is an important part of Gallagher’s team’s job.

Summing up her experience, Gallagher says, “I enjoy working with our customers in more than 60 countries throughout the world. With 16 global offices, I am exposed to different cultures and business practices that challenge me to think globally. Understanding where the customer is coming from allows me to succeed in helping them understand and navigate this complex field. Ultimately, I am part of the process which allows enterprises ranging from huge corporations to small farmers succeed in managing their overall risk.”

Requirements>

1. Overview of the Case Study 5-6 sentences
2. Statement of the Problem 1-2 sentences
3. Alternatives to Solve the Problem - List and provide a separate heading for each alternative - 1 - 2 pages
4. Recommendation on the basis of recommendation - 5-6 sentences
5. Implementation plant for recommended alternative - 6 sentences
6. Current Event - Link the case to current update event

Better Mousetraps has developed a new trap. It can go into production for an initial investment in equipment of $6.3 million. The equipment will be depreciated straight - line over 6 years to a value of zero, but, in fact, it can be sold after 6 years for $538,000. The firm believes that working capital at each date must be maintained at a level of 15% of next year’s forecast sales. The firm estimates production costs equal to $1.00 per trap and believes that the traps can be sold for $4 each. Sales forecasts are given in the following table. The project will come to an end in 6 years, when the trap becomes technologically obsolete. The firm’s tax bracket is 35%, and the required rate of return on the project is 9%.

Suppose the firm can cut its requirements for working capital in half by using better inventory control systems. By how much will this increase project NPV? (Enter your answer in millions rounded to 4 decimal places.)

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