Evaluating Prospective Investments If we accept that the goal of the financial manager is to create value for the stockholder, it follows that the financial manager must have a means of evaluating a prospective investment in terms of its likelihood of enhancing shareholder value. Different decision criteria may be used to evaluate proposed investments and we have gone through a pretty thorough review of most of them (NPV, IRR, Payback Period (straight and discounted), AAR, MIRR, PI). Our review included learning how to calculate each one as well as come to an understanding of the advantages and disadvantages of each. “Conventional wisdom” tells us that only the NPV criterion can always tell us if a particular project is a good investment and, if we have more than one project from which to choose, which one we should take. If this is the case, then why do so many financial managers in the “real world” make extensive use of the payback approach and, typically, do not take a discounted approach to payback? If you were to counsel a financial manager who is committed to using a payback criterion to evaluate prospective investments, would you take the opportunity to discuss other decision criteria that might be used? What advice would you provide as to whether he/she should continue using payback or if he/she should consider another approach and why?

Very few of us like to pay taxes, but the concept of taxation precedes all of us. There are a number of verses and parables about tax collection, such as Luke 3:11-16: "He answered and said unto them. He that has two coats let him impart to him that has none; and he that has food, let him do likewise" (King James 2000 Bible). Using any verse or parable from the Bible, compare and contrast the modern tax system with that from biblical times.

Please be original NO COPY AND PASTE

Very few of us like to pay taxes, but the concept of taxation precedes all of us. There are a number of verses and parables about tax collection, such as Luke 3:11-16: "He answered and said unto them. He that has two coats let him impart to him that has none; and he that has food, let him do likewise" (King James 2000 Bible). Using any verse or parable from the Bible, compare and contrast the modern tax system with that from biblical times.

Please be original NO COPY AND PASTE.

what are the multi-step process involving the methods the Federal Reserve Bank will undertake to create the $1,200 stimulus checks? Take us through all of the steps of the process, from the Congress approving a federal expenditure with no tax increase, until the public’s possession of the newly printed money.  Include all of the steps that must be undertaken by both the Federal Reserve Bank and by the US Treasury for this money supply expansion to go from start to finish.  Do not skip any necessary steps in the process; keep explaining all government steps until you have the new money.

What practical application can we expect from particle physics a century or two from now? What use can we make of quark-gluon plasmas or strange quarks? How can we harness W- and Z-bosons or the Higgs boson? Nuclear physics has given us nuclear plants and the promise of fusion power in the near future. What about particle physics? If we extend our timeframe, what promise does string theory give us? Can we make use of black holes?

Case 3-2 Rite Aid Inventory Surplus Fraud

Occupational fraud comes in many shapes and sizes. The fraud at Rite Aid is one such case. In February 2015, VP Jay Findling pleaded guilty to fraud. VP Timothy Foster pleaded guilty to making false statements to authorities. On November 16, 2016, Foster was sentenced to five years in prison and Findling, four years. Findling and Foster were ordered to jointly pay $8,034,183 in restitution. Findling also forfeited and turned over an additional $11.6 million to the government at the time he entered his guilty plea. In sentencing Foster, U.S. Middle District Judge John E. Jones III expressed his astonishment that in one instance at Rite-Aid headquarters, Foster took a multimillion dollar cash pay-off from Findling, then stuffed the money into a bag and flew home on Rite Aid’s corporate jet.¹

The charges relate to a nine-year conspiracy to defraud Rite Aid by lying to the company about the sale of surplus inventory to a company owned by Findling when it was sold to third parties for greater amounts. Findling would then kick back a portion of his profits to Foster. Foster’s lawyer told Justice Jones that, even though they conned the company, the efforts of Foster and Findling still earned Rite Aid over $100 million “instead of having warehouses filled with unwanted merchandise.” Assistant U.S. Attorney Kim Daniel focused on the abuse of trust by Foster and persistent lies to the feds. “The con didn’t affect some faceless corporation, Daniel said, “but harmed Rite Aid’s 89,000 employees and its stockholders.” Findling’s attorney, Kevin Buchan, characterized his client as “a good man who made a bad decision.” “He succumbed to the pressure. That’s why he did what he did and that’s why he’s here,” Buchan said during sentencing.

Findling admitted he established a bank account under the name “Rite Aid Salvage Liquidation” and used it to collect the payments from the real buyers of the surplus Rite Aid inventory. After the payments were received, Findling would send lesser amounts dictated by Foster to Rite Aid for the goods, thus inducing Rite Aid to believe the inventory had been purchased by J. Finn Industries, not the real buyers. The government alleged Findling received at least $127.7 million from the real buyers of the surplus inventory but, with Foster’s help, only provided $98.6 million of that amount to Rite Aid, leaving Findling approximately $29.1 million in profits from the scheme. The government also alleged that Findling kicked back approximately $5.7 million of the $29.1 million to Foster.

Assume you are the director of internal auditing at Rite Aid and discover the surplus inventory scheme. You know that Rite Aid has a comprehensive corporate governance system that complies with the requirements of Sarbanes-Oxley, and the company has a strong ethics foundation. Moreover, the internal controls are consistent with the COSO framework. Explain the steps you would take to determine whether you would blow the whistle on the scheme applying the requirements of AICPA Interpretation 102-4 that are depicted in Exhibit 3.11. In that regard, answer the following questions.

Questions

1. Explain the following concepts in the context of the case and how it relates to individual and organizational factors that contribute to fraud:

   • Rationalizations for unethical actions.

   • Stakeholder effects.

   • Ethical dissonance.

   • Sometimes good people do bad things.

2. Assume you are the director of internal auditing and have uncovered the fraud. What would you do and why?

3. Assume, instead, that you are the audit engagement partner of KPMG and are the first to uncover the fraud. You approach management of the firm and discuss making the necessary adjustments. Top management tells you not to press the issue because the firm doesn’t want to rock the boat with one of its biggest clients. What would you do and why?

Which is the optimal return combination for both the US/UK and US Spain?

US Billions USD
Increase in foreign holdings of US assets 84
Increase in US holdings of foreign assets 82
Statistical Discrepancy 32
Current Account Balance
Refer to the above table. The Current Account Balance =

1. Based on historical data, your manager believes that 31% of the company's orders come from first-time customers. A random sample of 146 orders will be used to estimate the proportion of first-time-customers. What is the probability that the sample proportion is greater than than 0.22?
Note: You should carefully round any z-values you calculate to 4 decimal places to match wamap's approach and calculations.

2. Business Weekly conducted a survey of graduates from 30 top MBA programs. On the basis of the survey, assume the mean annual salary for graduates 10 years after graduation is 157000 dollars. Assume the standard deviation is 39000 dollars. Suppose you take a simple random sample of 84 graduates.
Find the probability that a single randomly selected salary is less than 160000 dollars.
Answer =
Find the probability that a sample of size n=84 n=84 is randomly selected with a mean that is less than 160000 dollars.
Answer =
Enter your answers as numbers accurate to 4 decimal places.