Good afternoon interns,
As you all know, you are all vying for the 15 openings to be offered at the end of the internship. Another chance has come up for you to show us that you deserve one of those positions here at Firmament Financials Inc. New clients, Mr. and Mrs. Perez are planning on starting a family and would like to start saving for their child’s college education. The want to know what they can afford when their child is ready for college. They would like to utilize our Yearly College Savings Plan which grows a yearly deposit at an APR of 15% with continuous compounding. Your job is to analyze their information and come up with feasible recommendations. Their information can be found in the email they sent. Of course, you will be graded on your analysis. A grading rubric has been provided.
Good luck interns!
Dear Ms. Robles,
As satisfied customers of Firmament Financial, we of course look to you to help us save for our upcoming child’s college education. We feel that we can afford $100 per month for the 18 years until college in your College Savings Plan. We have a list of universities that we have researched with the approximate cost per year for each. Which if any of the university options will we be able to afford for our child? We would prefer to send them to an elite private university if we can afford it.
Anthony & Veronica Perez
|
University/College Type |
Cost per Year |
|
Elite Private |
$100,000 |
|
Elite Public |
$80,000 |
|
State Private |
$60,000 |
|
State Public |
$40,000 |
|
Out of State Community College |
$6,000 |
In: Advanced Math
“Bankrupt” Corporation is in a deep financial crisis. You are one of the financial avengers “Bankrupt” is desperately seeking help from. CEO of the company informed you that he is considering the two risky projects “Thanos” and “Loki” to protect the firm from financial collapse. Both projects have similar risk characteristics. Bankrupt’s WACC is 11%. The initial investments for both the projects are $200 million. Cashflow from the projects are as follows;
Year 1 2 3 4
Thanos 10M 60M 80M 160M
Loki 70M 50M 20M 160M
Now, your job is to explain the following questions in great detail so that the CEO understands your plans to protect the firm.
In: Finance
(law question). Fred Maxson owned Canadian Equipment Company. To operate the business, Maxson borrowed funds from Cross Town Bank & Trust. For each loan, Cross Town filed a financing statement that included Maxson’s signature and address, the bank’s name and address, and a description of the collateral. The first loan covered all of Maxson’s equipment, including “any after-acquired property.” The second loan covered a truck crane “whether owned now or acquired later.” The third loan covered a “Bobcat mini-excavator.” Did these financing statements perfect Cross Town’s security interests? Explain.
In: Accounting
on january 1, 2020, Wampum Jewelry company issued deep discount bonds having a total maturity value of 500,000. Wampum received 354,832 from investors on the date of issuance. The bonds mature 5 years from the date of issuance.
a- prepare the journal entry for the issuance of bonds on January 1, 2020
b-calculate the implicit rate of interest on the bonds
c-prepare an amortization schedule for the life of the bonds
d- Record journal entry for interest expense for the year ended dec 31,2023
In: Accounting
You found an item totaling $48,000 treated as miscellaneous expenses. You seek clarification from the tax payer and was told that from 1 July 2020, he was appointed as a part-time consultant to a company and received a total of $48,000 for the period of 1 July 2020 to 31 December 2020. However, he did not declare it as income as he argued that it is not related to his business. Instead he treated it as miscellaneous expenses, a replacement cost for the time he spent on consulting and not attending to his own business (treated as expense for time spent/lost).
Explain the implication of the items and suggest the tax treatment you would adopt in addressing the issues.
In: Accounting
On December 31, 2020, an analysis of the accounts for a company reveals the following:
$100,000 loss on disposal of discontinued operations, before tax
$6,000 gain on sale of investments, before tax
$10,000 depreciation expense understatement in 2018 due to error, before tax
$20,000 cumulative understatement of net income of prior years from changing inventory valuation method in 2020, before tax
$168,000 income from operations, before tax
$4,000 dividends declared
The applicable income tax rate is 40% for all tax-related items. Retained earnings on December 31, 2019 were reported as $600,000.
What is ending retained earnings on December 31, 2020?
In: Accounting
Assume the average age of an MBA student is 34.9 years old with a standard deviation of 2.5 years. a) Determine the coefficient of variation. b) Calculate the z-score for an MBA student who is 29 years old. c) Using the empirical rule, determine the range of ages that will include 99.7% of the students around the mean. d) Using Chebyshev's Theorem, determine the range of ages that will include at least 91% of the students around the mean. e) Using Chebyshev's Theorem, determine the range of ages that will include at least 87% of the students around the mean.
In: Statistics and Probability
Assume the average age of an MBA student is 30.7 years old with a standard deviation of 2.2 years.
a) Determine the coefficient of variation.
b) Calculate the z-score for an MBA student who is 26 years old.
c) Using the empirical rule, determine the range of ages that will include 95% of the students around the mean.
d) Using Chebyshev's Theorem, determine the range of ages that will include at least 94% of the students around the mean.
e) Using Chebyshev's Theorem, determine the range of ages that will include at least 80% of the students around the mean.
In: Statistics and Probability
VI. Communication: For this part of the assessment, you will prepare memorandums to upper management addressing certain scenarios or situations.
A. As the controller of Target Corporation, compose a memo to the CEO addressing the advantages and disadvantages of transitioning from GAAP to IFRS.
B. As the controller of Target Corporation, compose a
memo to the CEO addressing the following scenario: Your biggest
customer has just gone bankrupt, and you must inform the CEO how
this will affect your accounts receivable. Assume that the accounts
receivable balance is at least $100,000.
In: Accounting
At one of their regular executive meeting, the Startco's CEO was reviewing the Company's financials and ask the CEO (which is you) the following question. "I noticed our capital structure Debt/Equity ratio is 0.33. What may happen if we double our borrowing and use the extra cash from the loan to buy back some our shares? I see doing is as a simple way to improve profitability."
Briefly explain whether you agree with the CEO statement and why (why not).
In: Finance