Place yourself in the position of an executive manager (e.g., CEO, CFO, or COO) of The Home Depot. Further assume that you and your colleagues believe that it is time to further expand the company by way of new store locations. It is estimated that the cost of this expansion will be approximately $200 million. Of course, one of the key points of your discussion is the means by which the necessary funds will be raised.

The questions that appear below have arisen during a meeting among you and your colleagues. How would you respond to these questions?

1. What are the advantages and disadvantages to our company of financing the expansion by issuing bonds? By issuing common stock?

2. In the current economic climate, is it appropriate for us to be considering this expansion? In other words, would such an expansion be in the best interest of our stockholders? Why or why not?

Meadow Brook Manor would like to buy some additional land and build a new assisted living center. The anticipated total cost is $25 million. The CEO of the firm is quite conservative and will only do this when the company has sufficient funds to pay cash for the entire construction project. Management has decided to save $1.4 million a quarter for this purpose. The firm earns 6 percent compounded quarterly on the funds it saves. How long does the company have to wait before expanding its operations?

a. 3.99 years b. 7.99 years c. 3.49 years d. 6.79 years e. 4.89 years

Can you show me how to do this in excel? Thank you

I would like to use a formula in excel to solve it.

5. Discuss the manner in which user data was obtained by Cambridge Analytica. The company continues to argue that there was no data breach and that users provided permission for their data to be harvested. Discuss the company’s position and what was the responsibility of the FTC in enabling this breach to occur?
6. According to the case, what are the governance problems at Facebook? For instance, consider the shareholdings, board memberships and also the fact that Zuckerberg is both Chairman and CEO of the company. How does this compare with other companies and with best practice in industry?

11. The Facebook breach and its consequences demonstrate the very real ethical dilemmas that the Internet pose for the information rights of citizens. Consult pages 125 – 127 of your textbook and discuss what are information rights and two laws that aim to protect those rights where Facebook was guilty of breaching these laws.                

Ethics in Business and Accounting Question

1. Apply the five steps to ethical decision making and evaluate the following case. You don’t need to do outside research.

You are the CEO of Equifax, and the Company has a big problem. Personal information on 148 million Equifax customers were stolen. Unfortunately, you have found out that the systems Equifax are using are old, and the security systems were out-of-date and could have been updated to prevent the breach. You have a duty to ensure a safe work environment and safe opportunities for consumers and you have a duty to maintain profit and the image of the Company.

What should you do now? (The breach has just occurred a few days ago). Apply the five steps to ethical decision making. (The five steps appear below). Don’t worry about what the real CEO actually did. Instead, focus on what should be done, again using the five step approach:

• Gather the facts (relevant/irrelevant; separating fact, assumption, and speculation).
• Identify the values, issues, and problems (at its basic core, what are we dealing with here?)
• Identify stakeholders (Which parties would be impacted by my decision? How would they be impacted? Do I have an obligation to any of these stakeholders? If so, then what obligations exist?)
• Weight alternatives (Focus on feasible and likely courses of action. Think creatively).
• Check your gut (Can you live with your decision? How do you feel about your proposed course of action?)

Company ehf. which produces high quality headphones has been in the marketing campaign for the past six years. To meet ever-increasing competition in this market, the CEO of Company ehf. that an ad campaign is needed next year to maintain the company's market share. At his request, the operating accountant has compiled the accompanying figures from the cost accounting for 2012 in order to prepare the marketing plan for next year, ie. 2013.

It is requested:

a) What will be the estimated operating income this year, ie.

B) What is the contribution margin per unit of contribution this year?

C) What is the break-even point in units this year?

D) The CEO believes that in order to achieve sales targets next year, ISK 1 million needs to be set. more advertising than this year, but other costs will remain unchanged. What then does the sales revenue need to be in 2013 in order for the business to be in balance (to break-even)?

E) What does the sales revenue need to be in 2013, e.g. this ISK 1 million advertising campaign, to have the same operating profits as expected this year?

You are the Chief Financial Officer of Hilton Ltd, a large manufacturing company operating within the Asian-pacific region. The CEO, Mr Ray Ellis, has just returned from a shareholders engagement event to promote the company’s upcoming right issue of shares. He was confronted with some questions relating to issue of shares and whether there were any pros and cons to issuing shares via rights, bonus or by private placement. Issues related to the company’s earnings per share (EPS) also came up during the event. Mr Ellis was unimpressed with both the questions and his inability to respond in a comprehensive manner. He promised the shareholders that he would email them with clear responses to the issues raised, after he consulted with his Chief Financial Officer.
In consulting you, Mr Ellis would like to know your thoughts on the following:
 What is the difference between rights issue and bonus issue of shares?
 What are the advantages and disadvantages of both methods of issuing shares?
 Should Hilton Ltd consider a private placement and is there any benefit to having a private placement instead of a rights issue?
 What effects does a bonus issue of shares made in the middle of a financial year have on the EPS calculations of a company?

Required
Write a short memorandum format report to the CEO of Hilton Ltd to answer his questions. Your report should cover all four questions raised by Mr Ellis. Each question should be answered under a sub-heading within the report with appropriately cited references.

Singapore Clouds Ltd.’s (Microphone manufacturing and selling company), CFO, Mr. Michael has been asked by CEO, Mr. Ken, to assist with an investment appraisal.  They have recently completed a three-year feasibility study on whether, or not, to expand their market offerings and offer specially designed high-quality microphone for customers and invest in capital infrastructure for the production line.  The market research indicates no other competitors have ever sold this specially designed product before. It might open a completely new market for Clouds Ltd. In addition, it was revealed that this specially designed high-quality microphone could be sold via (e-trade) on-line trading system.

Clouds Ltd. is considering a proposal to acquire new machineries (which has an expected useful life of 6 years). If the company decides to purchase the new machineries, it will receive $ 74,000 for the existing machines in year 1. The existing machineries had been fully depreciated and the net book value of the assets is zero. The new equipment will be placed in service on 1 January 2021. The details regarding the proposal are as follows:

• Expected cost of the new machineries: $ 2,965,000.
• Expected installation costs of the new equipment: $ 35,000.
• Expected increase in working capital at the beginning of operations $ 72,000 and expected working capital at the end of the project $ 58,000.
• Expected investment allowance (tax free due to Covid-19 crisis) received from the government to support manufactures (at the end of year 1) is 10% of the total amount of capital invested (excluding working capital investment).
• Expected salvage value at the end of year 6 is nil.
• Expected repairs to maintain production efficiency (end of year 3): $ 127,000.
• Working capital will be released at the end of year 6.
• Expected increase in annual cash revenue: $760,000.
• Expected increase in annual cash operating expenses: $ 74,000.
• It is assumed that all cash flows occur at the end of each year.
• The taxation depreciation on the equipment would be 20% straight line.
• The company is subject to a 30% tax rate and has an after-tax required rate of return of 12%.

Required:

1. What type of investment is Clouds Ltd making?  Provide details as to why you came to this conclusion and other considerations in making the investment decision.
   
2. Calculate the Net Present Value (NPV) of the proposed investment after tax.
   
3. Advise Clouds Ltd management whether they should proceed with the project.

1.Unearned Revenues are classified as a(n)  *

Revenue

Expense

Current liability

Current asset

2.Beng Company has 30,000 shares of $1 par common stock issued and outstanding. The company also has 5,000 shares of $100 par 5% noncumulative preferred stock outstanding. The company did not pay the preferred dividends in 2017, 2018 and 2019. On December 1, 2020, the company’s board of directors declared that $150,000 will be paid as dividend on January 17, 2021. What amount of dividends must the company pay the preferred shareholders? *

$100,000

$75,000

$50,000

$25,000

3.Beng Company has 30,000 shares of $1 par common stock issued and outstanding. The company also has 5,000 shares of $100 par 5% noncumulative preferred stock outstanding. The company did not pay the preferred dividends in 2017, 2018 and 2019. On December 1, 2020, the company’s board of directors declared that $150,000 will be paid as dividend on January 17, 2021. What amount of dividends would common stockholders earn?  *

$200,000

$150,000

$125,000

$100,000

4.A large stock dividend is defined as *

more than 20–25% of the corporation's issued stock

less than 30% but greater than 25% of the corporation's issued stock

between 50% and 100% of the corporation's issued stock

more than 30% of the corporation's issued stock

On December 31, 2018, Marsh Company held Xenon Company bonds in its portfolio of available-for-sale securities. The bonds have a par value of $14,000, carry a 10% annual interest rate, mature in 2025, and had originally been purchased at par. The market value of the bonds at December 31, 2018 was $12,000. The December 31, 2018, balance sheet showed the following:

On January 1, 2019, Marsh acquired bonds of Yellow Company with a par value of $16,000 for $16,200. The Yellow Company bonds carry an annual interest rate of 12% and mature on December 31, 2023. Additionally, Marsh acquired Zebra Company bonds with a face value of 18,000 for $17,600. The Zebra Company bonds carry an 8% annual interest rate and mature on December 31, 2028. At the end of 2019, the respective market values of the bonds were: Xenon, $13,000; Yellow, $17,000; and Zebra, $20,000. Marsh classifies all of the debt securities as available-for-sale as it does not intend to hold them to maturity nor does it intend to actively buy and sell them. Assume that Marsh uses the straight-line method to amortize any discounts or premiums.

Required: