101)

Suppose that you are valuing a South African diamond producer that sells most of its products in China, records its sales in Chinese RMB, and has most of its employees in China. The company is publicly traded on the South African stock market. Which of the following should be components of your Cost of Equity calculation for this company?

a) Use Chinese government bond yields for the Risk-Free Rate.

b) Use South African government bond yields for the Risk-Free Rate.

c) The Equity Risk Premium should be based on US stock market historical returns, plus a spread to account for the additional risk and potential returns in South Africa (as the company is listed on the South African stock market).

d) The Equity Risk Premium should be based on US stock market historical returns, plus a spread to account for the additional risk and potential returns in China (as the company operates largely in China).

e) Ideally, Levered Beta should be based on comparable diamond producers that operate in China.

f) Ideally, Levered Beta should be based on comparable diamond producers that are headquartered in South Africa but operate largely in China.

102)

Which of the following represent DIFFERENCES in a Levered DCF analysis compared to an Unlevered DCF analysis?

a) You will calculate Terminal Value using an Equity Value-based multiple rather than an Enterprise Value-based one.

b) You will use Levered Beta rather than Unlevered Beta in the Cost of Equity calculations.

c) You will use Cost of Equity instead of WACC for the discount rate.

d) You don’t have to add back non-cash charges in the same way because Levered Free Cash Flow starts with Net Income rather than NOPAT.

e) You will calculate the company’s Implied Equity Value directly from the analysis, rather than calculating the implied Enterprise Value and then backing into the implied Equity Value.

f) When calculating Free Cash Flow, you have to subtract the net interest expense and mandatory debt repayments.

106)

Which of the following events might serve as catalysts if you are drafting a stock pitch for a healthcare company?

a) The launch of new products in any year of the projection period shown in your DCF analysis.

b) The launch of new pipeline drugs in the next 6-12 months.

c) A debt, equity, or convertible issuance within the next year.

d) A key patent expiration in 2-3 years.

e) An annual price increase that the company announces in January each year.

f) US or EU regulators approving a key drug for sale within the next year.

g) An acquisition that is set to close in 18 months.

Task 2 requires you to accurately complete the activities described in each question. Complete the answers in your own Excel document, putting your name at the top along with the Task and Task letter appropriate to each answer and submit below for your Assessor.

a) Make the Journal entry to record the sale of merchandise that cost $6,000, for $10,000 cash.

b) Record journal entries for the following transactions.

• Purchased office furniture for $3,200, agreed to pay the entire amount in 2 years
• Purchased computers for the office for $1,200 cash
• Paid for rent for the next 3 months, $600
• Purchased office supplies for $75 cash
• Purchased inventory on credit for $15,000
• Paid $11,000 to the supplier for the inventory purchased in previous bullet point
• Hired employees who will begin work in 2 weeks.

c) Record journal entries for the following transactions. After recording the transactions, prepare a ‘T-account’ and balance the accounts payable account.

• Purchased manufacturing equipment for $20,000 cash
• Purchased office furniture on credit, $2,700
• Paid for insurance for the next 6 months, $2,200
• Purchased inventory on credit, $15,000
• Purchased supplies for cash, $100
• Paid the supplier $14,000 for inventory purchased on credit
• Invested $3,000 in a short-term investment.

d) A company had the following transactions during the first month of operations. Record journal entries for these transactions. Determine the balance in the cash account at the end of the first month.

• Purchased inventory to be sold to customers, $45,000 on credit
• Rented warehouse space, $6,000 was paid for this month
• Sold $5,000 of inventory on credit (you have not been paid yet), sales price of $7,500
• Acquired office furniture for $3,000 cash
• Paid $12,000 to employees who worked this month
• Acquired manufacturing equipment costing $39,000, paid cash
• Paid $700 for cleaning
• Received a $100 utility bill for this month
• Collected $7,500 owed from customers.

e) A company had the following transactions during the first month of operations. Record journal entries for each transaction. Determine the balance in the cash account at the end of the first month.

• Borrowed $150,000 cash from the bank. $30,000 is to be repaid at the end of each year for the next 5 years
• Purchased inventory; $30,000 to be paid in 30 days
• Rented warehouse space; $2,000 was paid for this month
• Paid $300 for advertising to be run equally over this month and the next 2 months
• Purchased computer equipment; paid $3,000 and put $2,000 on credit
• Employees worked and earned $3,900; employees were paid $3,300
• Sold $15,000 of inventory on credit for a sales price of $25,000
• Purchased $500 of office supplies on credit, not yet used
• Acquired manufacturing equipment costing $55,000; paid ½ up front and agreed to make monthly payments for the balance for 3 years
• Paid $25,000 on accounts owed
• Collected $10,000 from customers for amounts owed
• Received $1,200 from a customer for services to be performed next month.

1.Using the following information, what is the amount of gross profit?

Identify a product that is monopolisticly competitive. Specifically, define what products it could be substituted for and also what characteristics make is differentiated from those products. Discuss what the seller of the product could do to increase the differentiation of that product, and
Discuss what impact increasing the differentiation of that product would likely have on the products price and the seller's profits earned from the product.

Sunrise​ Manufacturing, Inc. Sunrise​ Manufacturing, Inc., a U.S. multinational​ company, has the following debt components in its consolidated capital​ section, ​Sunrise's shareholders' equity is $50,000,000 and its finance staff estimates their cost of equity to be 17.5​%.

Current exchange rates are also listed in the table. Income taxes are 39​% around the world after allowing for credits. Calculate​ Sunrise's weighted average cost of capital. Are any assumptions implicit in your​ calculation?

What is​ Sunrise's weighted average cost of​ capital?

Data Table:

A graduate student surveyed 220 undergraduate students in a university last week, and found 165 of them prefer F2F classes to online classes. Test the claim that more than 70% of the students at this university prefer F2F classes at the 5% significance level. Include all 5 steps.

Need by 3pm pacific! please help me out !

Job Order Cost Accounting for a Service Company

The law firm of Furlan and Benson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during July:

a. Provide the journal entries for each of these transactions. If an amount box does not require an entry, leave it blank.

Feedback

a. Record the direct costs in Work in Process.
Apply the overhead based on professional hours.
Record actual overhead in the Office Overhead account. For cases completed, move the costs from Work in Process to Cost of Services.

b. How much office overhead is over- or underapplied? Enter your answer as a positive number.
$  

c. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.
$

Job Order Cost Accounting for a Service Company

The law firm of Furlan and Benson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during July:

July 3.Charged 570 hours of professional (lawyer) time to the Obsidian Co. breech of contract suit to prepare for the trial, at a rate of $220 per hour.

10.Reimbursed travel costs to employees for depositions related to the Obsidian case, $24,300.

14.Charged 210 hours of professional time for the Obsidian trial at a rate of $260 per hour.

18.Received invoice from consultants Wadsley and Harden for $75,200 for expert testimony related to the Obsidian trial.

27.Applied office overhead at a rate of $70 per professional hour charged to the Obsidian case.

31.Paid administrative and support salaries of $38,800 for the month.

31.Used office supplies for the month, $13,100.

31.Paid professional salaries of $163,100 for the month.

31.Billed Obsidian $381,100 for successful defense of the case.

a. Provide the journal entries for each of these transactions. If an amount box does not require an entry, leave it blank.

July 3Work in Process

Salaries Payable

July 10Work in Process

Cash

July 14Work in Process

Salaries Payable

July 18Work in Process

Consultant Fees Payable

July 27Work in Process

Office Overhead

July 31 Admin. sal.Office Overhead

Cash

July 31 SuppliesOffice Overhead

Supplies

July 31 Prof. sal.Salaries Payable

Cash

July 31 BilledAccounts Receivable

Fees Earned

July 31 CostCost of Services

Work in Process

Feedback

a. Record the direct costs in Work in Process.
Apply the overhead based on professional hours.
Record actual overhead in the Office Overhead account. For cases completed, move the costs from Work in Process to Cost of Services.

b. How much office overhead is over- or underapplied? Enter your answer as a positive number.
$  

c. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.
$

3. The Mathematics & Statistics department at Lancaster University claims that, on average, 25% of students obtain a first class degree. A competitor university is interested in showing that this value is an overestimate. They randomly sample 82 graduates and find that 18 have a host class degree

1. What are the assumptions for conducting a hypothesis test around this data? Are these satisfied?
2. What is your null hypothesis?
3. What is your alternative hypothesis?
4. Calculate the p-value for the hypotheses you proposed in (b) &(c).
5. What is your conclusion when conducting a 95% hypothesis test?
6. Do you agree with the competitor university that the proportion of first-class degrees advertised is an overestimate? State your reasoning.