home / study / business / finance / finance questions and answers / john ross graduated from college 6 years ago with a finance undergraduate degree. although ...

Your question has been answered

Let us know if you got a helpful answer. Rate this answer

Question: John Ross graduated from college 6 years ago with a finance undergraduate degree. Although he is ...

John Ross graduated from college 6 years ago with a finance undergraduate degree. Although he is satisfied with his current job, his dream is to become an investment banker. To become an investment banker, he would need to take an MBA degree. He is, thus, looking for colleges. After some time, John has narrowed his choice to Brandeis University, Carlton College, or Northeastern University. Both schools allow and encourage internships. However, the Northeastern University will allow students to work while enrolled in a MBA program.

I will describe below the four alternatives that John Ross can evaluate as of today.

Alternative (1)

He can keep his current job at the management firm D&L. His annual salary at the firm is $65,000 per year and is salary is expected to increase at 3% per year until retirement. He is currently 28 years old and he expects to work for 40 more years. His current job includes a full paid health insurance plan and is current average tax rate is 26%. Ben has a savings account with enough money to cover the entire cost of the MBA program.

Alternative (2)

The MBA program at Brandeis University requires two years of full-time enrollment at the university. The annual tuition is $70,000. Books and other supplies are estimated to cost $3,000 per year. John expects that after graduation from Brandeis University he will receive a job offer of $110,000 per year with a signing bonus of $20,000. The expected salary will increase at 4% per year. Because of the higher salary, the average income tax rate will be 31%.

Alternative (3)

The Carlton College offers a one-year program. The tuition cost is $85,000 to be paid upon matriculation. Books and other supplies for the program are expected to cost $4,500. John thinks that after the Carlton degree he will be able to receive an offer of $92,000 per year with a $18,000 signing bonus. The salary at this job will increase at 3.5% per year. His average tax rate at this level of income will be 29%.

Alternative (4)

Northeastern University offers a two-years program. The annual tuition is $90.000. Northeastern allows students to work while enrolled in the MBA program. After some research, John has found out that he can potentially work for his marketing professor as research assistant. The annual stipend for this position at Northeastern University is $25,000 for the first year and $27,000 for the second year. Books and other supplies are estimated to cost $2,000 per year. John expects that after graduation from Northeastern University he will receive a job offer of $85,000 per year with a signing bonus of $10,000. The expected salary will increase at 2% per year for the first 10 years. The growth rate will be 4% thereafter. The average income tax rate is 30%.

All schools offer a health insurance plan that will cost $3,000 per year. John also estimates that room and board expenses will cost $2,000 more per year at all schools than his current expenses. The appropriate discount rate is 6.3%.

Determine the NPV for each of the four alternatives. Please provide formula calculations.

You are a software development employee at a startup company. Your HR department has tasked the IT department with developing a simple application (Windows Form Application) to load and display employee records.

Your application will need to do the following:

Create an Employee Class with the following properties:

First Name

Last Name

Street Address

City

State

Zip

Create a sub class for Managers which inherits from the Employee Class. The Manager class will have the following additional properties:

Cost Center

Supervisor

Create a sub class for Developers which inherits from the Employee Class. The Developer class will have the following additional properties:

Developer Type (Script, .NET, Mobile, etc.)

Supervisor

Tax Type (W2, 1099-Contract)

Load employee information from a text file selected by the user into an array consisting of Managers and Developers. The format of your text file should be something like this:

First Name, Last Name, Street Address, City, State, Zip, Employee Type (Manager or Developer), Cost Center (0 if Developer), Supervisor, Tax Type (NA if Manager)

There should be a separate line for each employee (only one line per employee with the fields above) and your file should contain at least 7 - 10 employee records. You should save the file with a .txt or .csv extension.

The UI should allow the user to select how many records to view (start at 3 and allow up to the total number of records loaded).

The following requirements detail the critical elements that will determine the grading criteria for your submission. Please see the rubric below these requirements.

The application should compile and run successfully

The application should display Inheritance (Steps 1 - 3 above).

The application should allow the user to load a text or csv file for processing (Step 4 above).

The application should load the text file elements into an array of employee records (Step 4 & 4a above).

The application should display records from the array. The number of records to display should be selected by the user. (Step 5 above).

Your application should contain comments to explain the data and process flow of your code.

You and your business partners are considering applying for a franchise. If approved, you expect startup costs to be $400,000 plus $300,000 in real estate costs. Of this $700,000 in upfront costs, you will be allowed to depreciate $420,000 on a five-year MACRS schedule. The remaining $280,000 is not depreciable but should be included in the book value of the fixed assets associated with the franchise when it is sold. Your plan is to start and operate the business for 5 years at which time you expect to sell the business for $1,000,000. You expect to initially have working capital needs of $30,000, but these needs will grow proportionately with sales. You expect sales in the first year to be $200,000 and that sales will grow by 20% in the second year, 15% in the third year, and then 10% in the fourth and fifth years. You project annual fixed operating expenses of $50,000. Your annual variable operating expenses are expected to be 60% of sales in the first year. With improvements in efficiency and experience, you expect variable operating expenses to be 55% of sales in the second year, 50% of sales in the third, fourth and fifth years. You expect to pay taxes of 20%. Assume your required return is 12%. Should you apply for a Guthrie’s Franchise? Prepare a report responding to the following prompts:

1. Estimate the total cash flows for this opportunity. Explain your estimates in your report.

You and your business partners are considering applying for a franchise. If approved, you expect startup costs to be $400,000 plus $300,000 in real estate costs. Of this $700,000 in upfront costs, you will be allowed to depreciate $420,000 on a five-year MACRS schedule. The remaining $280,000 is not depreciable but should be included in the book value of the fixed assets associated with the franchise when it is sold. Your plan is to start and operate the business for 5 years at which time you expect to sell the business for $1,000,000. You expect to initially have working capital needs of $30,000, but these needs will grow proportionately with sales. You expect sales in the first year to be $200,000 and that sales will grow by 20% in the second year, 15% in the third year, and then 10% in the fourth and fifth years. You project annual fixed operating expenses of $50,000. Your annual variable operating expenses are expected to be 60% of sales in the first year. With improvements in efficiency and experience, you expect variable operating expenses to be 55% of sales in the second year, 50% of sales in the third, fourth and fifth years. You expect to pay taxes of 20%. Assume your required return is 12%. Should you apply for a Guthrie’s Franchise? Prepare a report responding to the following prompts: 3

. 3. Estimate the opportunity’s NPV. Explain how you arrived at your NPV estimates in the report.

You and your business partners are considering applying for a franchise. If approved, you expect startup costs to be $400,000 plus $300,000 in real estate costs. Of this $700,000 in upfront costs, you will be allowed to depreciate $420,000 on a five-year MACRS schedule. The remaining $280,000 is not depreciable but should be included in the book value of the fixed assets associated with the franchise when it is sold. Your plan is to start and operate the business for 5 years at which time you expect to sell the business for $1,000,000. You expect to initially have working capital needs of $30,000, but these needs will grow proportionately with sales. You expect sales in the first year to be $200,000 and that sales will grow by 20% in the second year, 15% in the third year, and then 10% in the fourth and fifth years. You project annual fixed operating expenses of $50,000. Your annual variable operating expenses are expected to be 60% of sales in the first year. With improvements in efficiency and experience, you expect variable operating expenses to be 55% of sales in the second year, 50% of sales in the third, fourth and fifth years.

You expect to pay taxes of 20%. Assume your required return is 12%. Should you apply for a Guthrie’s Franchise? Prepare a report responding to the following prompts:

1. Prepare pro forma income statements and operating cash flow projections. Explain your pro forma statements in your report.
2. Estimate the total cash flows for this opportunity. Explain your estimates in your report.
3. Estimate the opportunity’s NPV. Explain how you arrived at your NPV estimates in the report.
4. Consider what happens to cash flows and NPV if Sales are 20% more than expected. What if sales are 20% less than expected? Discuss this analysis in your report.
5. What is your recommendation? Should you and your partners pursue this opportunity? Explain your recommendation and provide your rationale.

You and your business partners are considering applying for a franchise. If approved, you expect startup costs to be $400,000 plus $300,000 in real estate costs. Of this $700,000 in upfront costs, you will be allowed to depreciate $420,000 on a five-year MACRS schedule. The remaining $280,000 is not depreciable but should be included in the book value of the fixed assets associated with the franchise when it is sold. Your plan is to start and operate the business for 5 years at which time you expect to sell the business for $1,000,000. You expect to initially have working capital needs of $30,000, but these needs will grow proportionately with sales. You expect sales in the first year to be $200,000 and that sales will grow by 20% in the second year, 15% in the third year, and then 10% in the fourth and fifth years. You project annual fixed operating expenses of $50,000. Your annual variable operating expenses are expected to be 60% of sales in the first year. With improvements in efficiency and experience, you expect variable operating expenses to be 55% of sales in the second year, 50% of sales in the third, fourth and fifth years.

You expect to pay taxes of 20%. Assume your required return is 12%. Should you apply for a Guthrie’s Franchise? Prepare a report responding to the following prompts:

1. Prepare pro forma income statements and operating cash flow projections. Explain your pro forma statements in your report.

Dazzle Jewelry Company is a new startup merchandising company with the goal of offering fine jewelry at reasonable prices. This goal has been made possible by securing manufactures that have agreed to offer wholesale prices to Dazzle Jewelry Company. Dazzle's jewelry supplier's act in good faith is based on the hopes that this will be a long term relationship, and Dazzle's orders will increase considerably with the next 18 months. However, in order for Dazzle Jewelry Company to achieve this it must increase its sales. Dazzle Jewelry company just completed its first month of operations, the brother/sister owned startup inventory includes fresh water pearls, sterling silver, stainless steel watches and quality stone pieces. Each of the inventory category includes earrings, necklaces, rings and bracelets, except the stainless steel watches. The average cost of earrings per unit is $10 with an average selling price of $55, 20 units have been sold. The average cost of the necklace is $15 with a selling price of $65, 25 units have been sold. The bracelets have an average cost of $12 and a selling price of $45, 15 units have been sold. The rings on an average sell for $35, but cost $11 per unit, 30 units have been sold. The stainless steel watches average cost per unit is $35 with a selling price average of $85, and 50 units have been sold. Dazzle Jewelry Company plans to start their business online before setting up a physical store location to keep their overhead cost low. However, since this is Dazzle Jewelry's first year of operations the owners have decided to employed your firm to help them determine how many jewelry units they need to sell in the current operating year to reach their targeted profit of $300,000. The owners realize that this information is vital in helping them develop their sales and marketing strategy. Dazzle Jewelry Company owners noted in a follow-up e-mail that fixed cost for the year totaled $76,320, however this cost is likely to increase in the coming months by 20% based on a marketing proposal that was submitted by Bosch Advertising. The owners also noted in the e-mail that fixed cost is the same amount each month.

Based on your analysis, how many units will Dazzle Jewelry need to break-even? What recommendation do you have for the owners related to break-even?

You work as the marketing director for a startup technology company in Atlant GA. Your company's new product is an APP that allows senior citizens to report health issues very quickly to their health provider or even contact emergency instead of having to make an actual call. To run the app and service, your price will be $11.99 per month. The Manager of your company wants you to develop an integrated marketing plan to promote your product.

You have to use some combination of the following:

1. Direct Marketing to seniors using the mail.

2. Digital Marketing using email and or social media

3. Advertising such as billboards, radio, and television.

4. Public Relations such as vising senior citizen centers.

5. Sales Promotions where you demonstrate your product at local stores including Best Buy, Target, Wal-Mart.

Which combination of the above do you feel would be the most successful and why. Explain?

En-range Networks is a startup internet service provider in Japan that is aiming to provide faster internet access to Japanese citizens. The company has recently finished installing its main access node just south of Tokyo and has hired you to conduct speed tests and analyze the results.

To get some intial data, you decide to conduct latency tests from the newly completed node to random servers around the world. Your tests yield the following data:

To analyze this data, you decide to conduct a t-test to see if the mean of this data is above 35 ms, assuming that ?=.05.

What is the p-value of your t-test?

Can you say that the mean of the data is greater than 35?

XYZ Company is a startup company, and it has purchased inventory as follows:

Assume you have sold 2,250 units in 2014. Given that fact, how much would inventory be valued on the balance sheet under the following methods and how much Cost of Goods Sold would be recognized as well?

LIFO Method

FIFO Method

Average Cost Method