Permata Mutiara Holdings Berhad (Permata Group) is the holding company of the largest
independent investment bank in Malaysia. Established for more than 30 years, Permata is
a financial group in Malaysia with extensive experience in equity broking, investment
banking, listed derivatives, treasury, corporate advisory, Islamic banking, wealth
management and investment management. Permata Holdings Berhad was listed on the
Main Board of Bursa Malaysia Securities Berhad in 1998.
After graduation, you have successful join the company and been placed in Investment
Department as an Analyst Associate. As a business graduate, the management has trust
that you have an excellent knowledge and skills besides the capability you have shown
during the interview.
En Amir Dhalan, a Chief Finance Officer (CFO) have asking the Investment Department
to prepare a few tasks for him to present for the company business planning for five years.
You are one of the staff in the department has involve in these tasks. Mr Andrew Yap, the
Investment Manager has segregated the tasks to few people in the department. The tasks
have been given by Mr Andrew for you to accomplished as follows:

a) To evaluate the performance of the subsidiaries of Permata by providing the report
on the value of its stocks according to CAPM. You have to plot the Security Market
Line (SML) for all the stocks. The stocks are listed are:
i) Permata Mutiara Plantation
ii) Permata Mutiara Hotel
iii) Permata Mutiara Banking
iv) Permata Mutiara Unit Trust
v)Permata Mutiara Insurance

b)To evaluate the FIVE (5) stocks either they are optimal portfolio and best possible
risk and return according to Markowitz in Modern Theory (efficient frontier).

c)To evaluate all the FIVE (5) stocks according to the Discounted Dividend Model
(DDM) either by constant growth model and/or multiple growth model.

d)The group is considering to buy bonds from foreign countries. You have to
recommend TWO (2) countries after analyze according to the SWOT, the strength
and weakness of the firm, risk analysis and return. Besides, the main factor you
have to look at the bond rating.

e)The group also considering to buy Malaysia Government Securities and few stocks
either locally or globally. Before recommend, you need to analyze those stocks
according to your knowledge.

f) Analyze and evaluate the outcome from your valuation.

g) Recommend to the management and summarize your findings.

DistCo, a large warehouse service company in the San Francisco Bay Area, stores pharmaceutical products for customers while they are in transit to local retailers. DistCo can store a maximum of 280,000 cases of products at its present facility. Because their business has been growing, the company's management wonders if they should acquire other warehouses in 2001.

The materials specialist has accumulated the following inventory data: Inventory (thousand Year Quarter Period of cases)

Inventory (thousand

         Year Quarter Period of cases)

            ______________________________________

         1996 1 1 176

                     2 2 134

                     3 3 186

                     4 4 195

         1997 1 5 189

                     2 6 157

                     3 7 195

                     4 8 211

         1998 1 9 205

                     2 10 180

                     3 11 212

                     4 12 229

         1999 1 13 223

                     2 14 192

                     3 15 234

                     4 16 248

         2000 1 17 239

                     2 18 217

                     3 19 271

                     4 20 284

(a) Briefly introduce each time-series method (e.g., moving average, exponential smoothing, linear trend, trend with seasonal factors) used in your forecasting.

(b) Explain how you select the best time-series forecasting model and why it is better than the others are. What is the forecast performance? What quarterly inventory is to be expected in each quarter of 2001?

Hint: You may include the following elements in your answer

· Explain how to measure forecast accuracy using MSE:

o The MSE (mean squared error) is a measure of the quality of an estimator—it is always non-negative, and values closer to zero are better. In statistics, the mean squared error (MSE) measures the average of the squares of the errors—that is, the average squared difference between the estimated values and what is estimated.

· Compare MSE of different methods.

· Explain which method is best and why (by observing patterns in actual data).

· Conclude with your forecast results in 2001

(c) Should DistCo acquire more warehouse capacity in 2001? Please explain and justify your opinion.

(d) What are the potential factors that may affect the forecast accuracy of the model you have selected?

Hint: There are always some factors not be able to consider in time-series analysis. For example, interest rate, GDP, political event, natural event, etc.

Thirty years ago, Starbucks was a single store in Seattle’s Pike Place Market selling premium roasted coffee. Today it is a global roaster and retailer of coffee with some 13,000 stores, more than 3,750 of which are to be found in 38 foreign countries. The strategy of its owner was to sell to the company’s own premium roasted coffee and freshly brewed espresso-style coffee beverages, along with a variety of pastries, coffee accessories, teas and other products, in a tastefully designed coffeehouse setting.

In 1995, with 700 stores the United States, Starbucks began exploring foreign opportunities. Its first target market was Japan. Although Starbucks had resisted a franchising strategy in North America, where its stores are company owned, Starbucks initially decided to license its format in Japan. However, the company also realized that a pure licensing agreement would not give it the control needed to ensure that the Japanese licenses’ closely followed Starbucks’ successful formula.

So the company established a joint venture with a local retailer, Sazaby Inc. Each company held a 50% stake in the venture, Starbucks Coffee of Japan. Starbucks initially invested $10 million in this venture, its first foreign direct investment. The Starbucks format was then licensed to the venture, which was charged with taking over responsibility for growing Starbucks’ presence in Japan.

After Japan, the company embarked on an aggressive foreign investment program. In 1998, it purchased Seattle Coffee, a British coffee chain with 60 retail stores, for $84 million. In Asia, Starbucks’ most common strategy was to license its format to a local operator in return for initial licensing fees and royalties on store revenues.

In 2006, Starbucks announced that it believed there was the potential for up to 15, 000 stores outside of the United States, with major opportunities in China, which the company now views as the largest single market opportunity outside of the United States. Currently the company only has 350 stores in China.

1. What could be the main reason that triggered Starbucks to pursue FDI in Britain? .

2. Starbucks decided to pursue international investment through licensing, what would be the cause of that? .

3. Assess the reasons why Starbucks chose to embark on a foreign market expansion strategy outside of the USA.

4. In your opinion what type of international business activity should have Starbucks used? Explain your answer.

Barry Yellen, CPA, is a sole practitioner. The largest audit client in his office is Rooster Sportswear. Rooster is a privately owned company in Chicken Heights, Idaho, with a 12-person board of directors. Barry is in the process of auditing Rooster's financial statements for the year ended December 31, 2019. He just discovered a related-party transaction that has him worried. For one thing, the relationship has existed for the past two years, but Barry did not discover it. What's just as troubling is that the client hid it from him. Rooster bought out Hen Sportswear two years ago but still operates it as a separate entity, and since then has systematically failed to disclose to the private investors related-party transactions involving the CEO of Rooster, Frank Footer. It seems that Footer is borrowing money from Hen and is deeply in debt to the CEO of that company, who is his brother-in-law. Also, Hen has hired relatives of Footer, most of whom are unqualified for their jobs, and pays them an above-market salary. This has been hidden from Barry as well. Barry was informed by an anonymous tipster that Rooster operates a secret off-balance-sheet cash account to pay for cash bonuses to senior officers, travel and entertainment expenses, an apartment rental for Footer, and cash and noncash gifts to local government officials to "grease the wheels" when permits need to be expedited in favor of Rooster. Barry doesn't know what to make of it, because he is too focused right now on the related-party transactions with Hen Sportswear. Barry is in the process of questioning Hans Burger, CPA, who is the CFO of Rooster, about these transactions. Burger explains that he had raised these issues with Footer but was instructed in no uncertain terms to leave them alone. He did just that. Burger told Barry he needed this job and wouldn't jeopardize it out of a sense of "ethics." Barry is in his office back at the firm and reflecting on how best to handle this matter.

Questions

3. Has fraud been committed in this case? Explain. If so, what are Barry's obligations in this regard?

Barry Yellen, CPA, is a sole practitioner. The largest audit client in his office is Rooster Sportswear. Rooster is a privately owned company in Chicken Heights, Idaho, with a 12-person board of directors. Barry is in the process of auditing Rooster's financial statements for the year ended December 31, 2019. He just discovered a related-party transaction that has him worried. For one thing, the relationship has existed for the past two years, but Barry did not discover it. What's just as troubling is that the client hid it from him. Rooster bought out Hen Sportswear two years ago but still operates it as a separate entity, and since then has systematically failed to disclose to the private investors related-party transactions involving the CEO of Rooster, Frank Footer. It seems that Footer is borrowing money from Hen and is deeply in debt to the CEO of that company, who is his brother-in-law. Also, Hen has hired relatives of Footer, most of whom are unqualified for their jobs, and pays them an above-market salary. This has been hidden from Barry as well. Barry was informed by an anonymous tipster that Rooster operates a secret off-balance-sheet cash account to pay for cash bonuses to senior officers, travel and entertainment expenses, an apartment rental for Footer, and cash and noncash gifts to local government officials to "grease the wheels" when permits need to be expedited in favor of Rooster. Barry doesn't know what to make of it, because he is too focused right now on the related-party transactions with Hen Sportswear. Barry is in the process of questioning Hans Burger, CPA, who is the CFO of Rooster, about these transactions. Burger explains that he had raised these issues with Footer but was instructed in no uncertain terms to leave them alone. He did just that. Burger told Barry he needed this job and wouldn't jeopardize it out of a sense of "ethics." Barry is in his office back at the firm and reflecting on how best to handle this matter.

Questions

1. Who are the stakeholders in this case and what are Barry's obligations to them?

1) Donald rents out his vacation home for nine months and lives in his vacation home for the remainder of the year. His gross rental income for 2017 is $7,200. The expenses attributable to the vacation home for the entire year are as follows:

Real estate taxes $2,000

INterest on mortgage loan 4,000

Utilities 1,200

Repairs/maintenance 600

Depreciation 3,500

What amount would Donald report as net income or loss from the rental of the vacation home?

2) Wilson and Joan, both in their 30s, file a joint income tax return for 2017. Wilson's wages are $15,000 and Joan's wages are $23,000 for the year. Their total adjusted gross income is $38,000, and Joan is covered by a qualified pension plan at work but Wilson is not.

a) What is the maximum amount that Wilson and Joan may each deduct for contributions to thier individual retirement accounts?

Wilson $

Joan $

b) If Joan's wages are $82,000 for 2017, instead of $23,000, and thier adjusted gross income is $97,000, what is the maximum amount that Wilson and Joan may each deduct for contributions to thier individual retirement accounts?

Wilson $

Joan $

3) Hope srpings, a teacher, loaned Hugh Owens, a friend, $20,000 to invest in real estate. Hugh declared bankruptcy in 2017 and cannot repay the $20,000

a) What is the nature of Hope's loss? ( what does it called ?)

b) Assuming Hope has no other captial transactions, is there a limit on the amount she may deduct for 2017?

Explain

4) Dennis, the owner of Dennis Company, incurs the following expenses while away from home on a three-week business trip during 2017:

Air fare from Chicago to Boston $800

Hotel charges 2,200

Meal charges 880

Dry cleaning and laundry 100

Local transportation 55

Business entertainment 250

Business gift to Boston manager 55

in addition to the above expenses, Dennis incurred the following expenses for a weekend sightseeing trip to Washington D.C.:

Transportation to Washington DC $350

Hotel charges 225

Meal charges 105

Calcuate the amount Dennis may deduct for 2017 as travel expenses for the trip

1. Prepare a proper B/S Statement

2. Prepare a B/S pie chart and comment

3. Prepare an I/S pie chart and comment

4. Complete the following ratios
a. emergency fund ratio
b. current ratio
c. H1
d. H2

5. F/S Analysis assuming there is a $7,000 employer match to the 401K plan, calculate
a. Savings rate and comment if they started saving at age 25
b. Based on their current age, Calculate the investments assets to gross pay and comment

You have been approached by Simpson, a 23 years old fresh graduate for financial
advice. Simpson is a risk-taker who has limited knowledge of Finance. He has
provided the following information about his financial situation:

with a local financial institution. Interest rate for this car loan is 19.95% per
annum. The market price of this car is estimated to be $6,000.