Questions
What did economic data tell us about the health of the economy on February 1, 2020...

What did economic data tell us about the health of the economy on February 1, 2020 before the advent of the COVID-19 pandemic. Assess the health of the U.S. economy on February 1 by evaluating the key economic indicators that we have looked at in this course. How close was the overall economy to potential GDP and the natural rate of unemployment? Was the economy experiencing an inflationary or recessionary gap? The relevant economics statistics that you should discuss include the growth rate of real GDP, the unemployment rate, and the inflation rate at a minimum. You are encouraged to discuss and evaluate other economic indicators such as stock market indices that could add to a more complete picture of the state of the economy as of the beginning of our course. of February 1, 2020 (before the rapid spread of the Coronavirus) Was the United States economy’s Short Run Aggregate Supply Curve? Explain your answer carefully using As economy operating in the Keynesian, intermediate, or neoclassical portion of the the data and information that you have gathered regarding real GDP, unemployment, the GDP deflator, and inflation in the previous discussions. You should discuss the concepts of potential GDP and the natural rate of unemployment to receive full credit

In: Economics

Each business has value to its stakeholders. This value, however, is not determined uniformly among its...

Each business has value to its stakeholders. This value, however, is not determined uniformly among its stakeholders. Research a business that was recently acquired or merged with another through the purchase of its stock or the buyout of its shareholders. Address the following:

Determine the value proposition that it represented for its shareholders before its acquisition. You may determine its value before acquisition and its latest 10K through yahoofinance.com.

Determine the buyout value upon acquisition. According to Brooks (2017), each firm must have a value proposition that is TRUE (Testable, Real, Unique, Essential).

Determine whether these attributes were met in the acquired company and whether the attributes were used to determine its relative value to the acquiring company.

Respond to at least two other classmates in the following ways:

Ask clarifying questions.

Offer additional insight or reflection.

Relate to the post by providing another perspective gleaned from personal experience or learnings.

In: Accounting

Hello, my lecturer has asked us to do capital budgeting based on this. Required: a) NPV...

Hello, my lecturer has asked us to do capital budgeting based on this. Required:
a) NPV
b) IRR
C) Payback period and analysis

Walmart, the world’s largest retailer, has finally confirmed that it is making a $16 billion investment into Flipkart for a 77 percent share of the online retailer. Tencent, Tiger Global, Microsoft, Accel and Flipkart co-founder Binny Bansal will continue to be investors in the company with this deal. The investment will value Flipkart — India’s biggest online retailer with 54 million active customers and projected gross merchandise value of $7.5 billion for 2018 — at $20.8 billion when the deal closes. That close is expected to happen later this year after getting regulatory approval.

The investment in Flipkart becomes the biggest-ever that Walmart has made in its history, supplanting Asda in the UK (which it last week partially divested). Walmart said that it intends to keep Flipkart as a distinctive brand and even help usher the company towards a “publicly-listed, majority-owned subsidiary” in the future. Right now Flipkart operates at a loss as it pursues growth.

Flipkart will give Walmart a big step up in its business in Asia by helping it better tap the region’s second-largest market after China, and one of the world’s fastest-growing economies. Walmart India already has 21 Best Price cash-and-carry stores and one fulfillment center in 19 cities across nine states in India, and it said that more than 95 percent of sourcing coming from India. Walmart said that Krish Iyer, president and chief executive officer of Walmart India, will continue to lead that business. The bigger company has been divesting of some of its international operations at the same time that it is beefing up in India. Most recently, it announced a sale of a majority ownership of Asda in the UK to Sainsbury’s.

It will also give Walmart an advance in its wider e-commerce ambitions, which it has been pursuing at an aggressive pace in a bid to rival the e-commerce Amazon — which not only has been moving into Walmart’s brick-and-mortar territory, but has put a lot of investment specifically into growing its business in India.

“India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading transformation of eCommerce in the market,” said Doug McMillon, Walmart’s president and chief executive officer in a statement. “As a company, we are transforming globally to meet and exceed the needs of customers and we look forward to working with Flipkart to grow in this critical market. We are also excited to be doing this with Tencent, Tiger Global and Microsoft, which will be key strategic and technology partners. We are confident this group will provide Flipkart with enhanced strategic and competitive advantage. Our investment will benefit India providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs.”

Walmart’s stake — provided it gets regulatory approval — sets up an interesting scenario in India, where now the two biggest e-commerce (and overall?) retailers will be controlled by US companies, something we predicted could happen. The competitive implications for smaller, homegrown startups will be tough, and it will be worth watching how (and if) local regulators respond to that state of affairs.

One detail that might affect that is how Walmart opens the investment to other parties: the company noted in its announcement that “Walmart and Flipkart are also in discussions with additional potential investors who may join the round, which could result in Walmart’s investment stake moving lower after the transaction is complete.” Regardless, Walmart said that it will keep “clear majority ownership.”

Tencent and Tiger Global will keep their seats on the Flipkart board, with new members from Walmart. “The final make-up of the board has yet to be determined, but it will also include independent members,” Walmart said. “The board will work to maintain Flipkart’s core values and entrepreneurial spirit, while ensuring it has strategic and competitive advantages.”

The deal comes after many months of speculation about a tie-up between Flipkart and Walmart, which reached a fever pitch this morning when Softbank CEO Masayoshi Son accidentally let the news of the finalised deal slip out in an investor presentation. He termed it an “acquisition” and sure enough, Softbank is selling its stake in the transaction, so it has exited the investment, one of its biggest in India to date.

Walmart’s stake in Flipkart also sets up India as the latest battleground between the retailer and Amazon. Amazon also had been rumored to be interested in taking a stake in Flipkart as recently as last week. Amazon has already invested billions into its operations in India — a move that had already heightened competition, impacted e-commerce operators’ margins, and had directly impacted Flipkart’s prospects (a 2017 investment was made as a “downround” for example).

This should see a huge infusion of investment into the operations, with Flipkart getting an extra boost from Walmart’s immense purchasing power and logistics muscle. Walmart said that its investment includes $2 billion of new equity funding that will go towards that growth.

“This investment is of immense importance for India and will help fuel our ambition to deepen our connection with buyers and sellers and to create the next wave of retail in India,” said Binny Bansal, Flipkart’s co-founder and group chief executive officer. “While eCommerce is still a relatively small part of retail in India, we see great potential to grow. Walmart is the ideal partner for the next phase of our journey, and we look forward to working together in the years ahead to bring our strengths and learnings in retail and eCommerce to the fore.”

Walmart said it plans to finance the investment with a combination of newly issued debt and cash on hand. After the deal closes, Flipkart’s financials will be reported as part of Walmart’s International business segment. “If the transaction were to close at the end of the second quarter of this fiscal year, Walmart expects a negative impact to FY19 EPS of approximately $0.25 to $0.30, which includes incremental interest expense related to the investment.

In: Accounting

Q2: You have just graduated from MBA program with finance major. Immediately after graduation you have...

Q2: You have just graduated from MBA program with finance major. Immediately after graduation you have been hired as a financial analyst in a highly prestigious listed company name Cornejo. Your first assignment is to estimate the cost of equity capital and stock price of the company. Your assistant gathered the following information for you:

  • The dividend per share (DPS) record of the company over the last 5 years is as follows:

                                       Year

Dividend per Share (DPS)

t-5

7.80

t-4

9.4

t-3

10.85

t-2

11.2

t-1

11.7

t0

10

  • Risk free rate is 3.5 percent
  • Market risk premium is 5 percent
  • Cornejo Co has an estimated beta of 1.10
  • The company’s dividend growth rate is expected to remain constant for the foreseeable future.

Required:

  1. Estimate the company’s cost of equity capital using CAPM.  
  2. Draw and briefly define the security market line (SML).
  3. Extrapolate a past growth rate. (
  4. Estimate the current price of the company’s shares.
  5. State clearly any limitations and assumptions that you made in your calculations.

In: Finance

Complete the following ten (10) questions as if you were asked them in a job interview...

Complete the following ten (10) questions as if you were asked them in a job interview and share in the Career Lab. Remember to tailor your answer to the job that you are applying for, even with questions such as “Tell me about yourself.” Include key words. Common Interview Questions 1. Tell me about yourself. 2. Why do you want to work for our company? 3. Do you have the personal characteristics necessary for success in your chosen career? What are they? 4. What did you like best, and least, about your last job? 5. What are your strengths and weaknesses? 6. Do you have any questions for me? STAR Questions: The STAR method is a structured manner of responding to a behavioral-based interview question by discussing the specific situation, task, action, and result of the situation you are describing. Please answer these questions using the STAR method. 7. Describe a situation in which you worked as part of a team. What role did you take on? What went well and what didn't? 8. Have you ever had difficulty with a supervisor or instructor? How did you resolve the conflict? 9. How do you determine or evaluate success? Give me an example of one of your successful accomplishments. 10. How well do you work under pressure? Give me an example.

In: Operations Management

37. Suppose there is a competitive market for e-bikes that is inthe long-run. If firms...

37. Suppose there is a competitive market for e-bikes that is in the long-run. If firms in the
e-bike market are not identical, then an increase in cost will
A) shift marginal cost to the right.
B) push the most inefficient firms out of the market.
C) push the most efficient firms out of the market.
D) There is not enough information to answer.


38. Suppose the company E-bikes R US is the sole supplier of e-bikes and produces 100
e-bikes. E-Bikes R US faces MC = 15 and MR = 17. If E-bikes R US produces 101 e-bikes,
then MC = 16 and MR = 15. To maximize profits, E-Bikes R US
A) should produce 100 units.
B) should produce 101 units.
C) The firm cannot maximize profits.
D) The firm is not a monopoly.


39. Suppose the company E-bikes R US is the sole supplier of e-bikes and faces the following
inverse demand: p = 100 - 2Q. Profit maximization
A) is achieved when 25 units are produced.
B) is achieved by setting price equal to 25.
C) is achieved only by shutting down in the short run.
D) cannot be determined solely from the information provided.

In: Economics

New Macomb Wholesale Distributor made the following transactions in year 7. Record all the transactions in...

New Macomb Wholesale Distributor made the following transactions in year 7.
Record all the transactions in general journal form.

feb 8th Bought inventory on account from Fountain Mfg. company for $18,600.00. terms 3/15, net 60.

feb 10th Paid $375 to Hare transport for shipping charges for inventory we are acquiring

feb 13th Sold merchandise on acct. to Alixx Co. for $92,500. All on acct. sales are with terms 1/10, net 30.
This merchandise cost us $55,500.

feb 16th Fountain Mfg. company issued us a 350.00 credit memo related to our purchase made on feb. 8th.

feb 17th Sold merchandise on acct. to Tyrone Sports Co. for $10,300. This merchandise cost us 9,455.

feb 19th Fully paid what is owed to Fountain Mfg.

feb 20th Alixx Co. returned 1/4 of what they purchased on the 13th.

feb 21st Alixx Co. fully paid what they owe us.

Mar 1st Tyrone Sports fully paid what they owe us.

Please add explanations to journal entires.

Show totals for debits and credits at the end.

Show All work please

In: Accounting

The CEO of a growing cyber-security firm was awarded 25,000 stock options as part of her...

The CEO of a growing cyber-security firm was awarded 25,000 stock options as part of her pay package. She can exercise the options -turn them into stock- in two years. The company’s stock price was $35.00 per share at the time of the stock option grant. Shortly after the option award was received, she went to an investment banking firm and bought put options at a strike price of $35.00. The option expires in two years.

(i) What does the put option do for the CEO? Carefully explain why your stated result occurs.

(ii) Stock options and stock ownership are included in compensation packages to create incentives for CEOs to create value for shareholders. Does this put option purchase change those incentives? If so, how?

(iii) If you were a shareholder in this company, would you want to be informed about these types of transactions by the CEO?

In: Finance

Trillium Ltd, a small and growing innovative start-up technology company traded on the Toronto Stock Exchange,...

Trillium Ltd, a small and growing innovative start-up technology company traded on the Toronto Stock Exchange, leased machinery on January 1, 2020 for a term of 10 years. The Company considered purchasing the machinery but instead opted to lease. The machinery is widely known to have a general life span of about 20 years.

At the date of signing the lease contract, the leased machinery and associated lease obligation were correctly recorded at $42,000. The first lease payment of $6,000 was made on December 31, 2020 and the interest rate inherent in the lease contract is 7%.

At the start of the year, the Company had a cash and retained earnings balance of $100,000. Assume the above was the only transaction in the year.

The Company has a December 31 year-end.

Required:

  1. For the year-ended December 1, 2020, prepare the relevant parts of the following financial statements:
  1. Statement of Financial Position
  2. Statement of Profit or Loss

  1. Explain, with support, two of the most likely reasons why this specific Company opted to lease the machinery rather than purchase it.
  1. Explain how the lease will affect Earnings-before-Interest-Taxes-Depreciation (EBITDA).

  1. Explain how the debt-to-equity ratio would be affected if the Company choose to borrow funds from a bank to purchase the machinery rather than leasing it. Be specific.

In: Accounting

Principles of Auditing 330-01 Facts: • A Chicago area defense subcontractor (“ABC”) manufactures metal gear boxes...


Principles of Auditing 330-01

Facts:
• A Chicago area defense subcontractor (“ABC”) manufactures metal gear boxes for tanks and fighter aircraft. It has been in business since the 1960’s -- & has a December 31st year- end.
• In 2016, a Canadian Company (“Parent”) purchased 100% of ABC.
• In 2017 the Company had a slight loss.
• In 2018, the Company had a much larger loss, significant decline in sales & terminated about 25% of its workers. The sales decline was directly caused by a steep decline in orders for tanks & planes by the Department of Defense.
• In 2019, preliminary numbers reviewed by your audit firm during October, 2019 (as part of the planning phase of the 12/31/2019 year end audit), reflected a very large loss, a continued decline in sales & additional staff reductions.
• In 2017, 2018, and 2019 ABC has suffered recurring losses from operations, and has had a net capital deficiency.
• ABC expects continued weak demand for its defense products in 2020 & beyond.
• ABC hopes to use its manufacturing expertise to enter into other non-defense oriented markets starting in 2020.
• Since the acquisition, the ABC Company has maintained large bank loans pursuant to bank lines with a local bank. There is no additional borrowing capacity on these bank lines.
• The audited financial statements are due 90 days after the 12/31/2019 year end – i.e. 3/31/2020. Your audit firm intends to release the audited financial statements on or prior to this due date.
• The ABC Company bank debt is due on demand, is secured by its equipment and is guaranteed by Parent.
• Pursuant to Canadian / U.S. banking procedures, the Parent obtains a Letter of Credit from its Canadian bank to serve as collateral for its guarantee of ABC’s U.S. bank debt. (The letter of credit will be converted to cash to payoff ABC’s local bank debt if ABC defaults on this bank debt). The Canadian Bank which issues the Letter of Credit is Canada’s 2nd strongest Bank.
• The letter of credit is for a 1 year term (i.e. from each April 10th to the following April 10th) & automatically renews each April 10th unless any of the parties to the arrangement wants to terminate the letter of credit.
• Substantially all of the work for the calendar 2019 audit is completed by March 15, 2020.


Two Questions:

a. For the December 31, 2019 year-end, do you believe there is substantial doubt about ABC Company’s ability to continue as a Going Concern? Provide your supporting arguments, specifically addressing: (8 Points)
• Conditions and Events
• Management’s Plans



b). If ABC could get a 30 day extension on the due date of the audited financial statements from the local bank – i.e. from 3/31/2020 to 4/30/2020, how, if any, would your answer change? Why or why not? (4 Points).



In: Accounting