1. When analyzing a firm’s financial performance, should the analyst focus on the incremental after-tax profits or the incremental after-tax cash flows of the firm? Explain your reasoning!

2. Holding all else constant, how would a significant increase in interest bearing debt impact the measure of the firm’s Free Cash Flow? Explain!

3. If a firm uses an accelerated depreciation expense method (MACRS) versus straight line depreciation expense for a newly acquired asset, what would be the impact on the firm’s operating profit after taxes in the first year the asset was in use? What would be the impact on the firm’s free cash flow after taxes in the first year the asset was in use? Which method of depreciation would you recommend?

4. In 2019, the firm’s operating profit after taxes decreased significantly, however, the firm’s free cash flow increased in 2019. Assuming the firm’s depreciation expense and W/C did not change, what is a likely explanation for the set of performance measures for this firm in 2019? Based on this information, was the firm’s performance in 2019 good, bad, or unclear?

5. In 2019, the firm’s operating profit after taxes was constant, the firm’s free cash flow decreased significantly, and the firm’s EVA was constant. What is a likely explanation for the set of performance measures for this firm in 2019? Based on this information, was the firm’s performance in 2019 good, bad, or unclear?

6. What could account for the fact that the firm’s economic value added and ROIC was positive and significantly greater than their peer firm in 2019, while the firm’s abnormal stock return compared to their peer was negative in 2019?

7. In January of 2020, Ford Motor Corporation is going to announce their plans to start constructing a production facility in Kenya in the second quarter of 2020. It is expected that Ford will not begin selling cars and trucks in Kenya until the fourth quarter of 2021 (depreciation expense will not begin until the firm starts to utilize the assets in their operations). Along with the announcement to expand into Kenya, Ford announced their expectations of a very high return on invested capital from this investment opportunity. The project will be financed at the firm’s current debt to asset ratio (w_d) of around 25%. What is the likely impact of this decision for Ford’s performance in fiscal year 2020? More specifically, explain your predicted impact on the following performance measures:

Operating Margin:

Operating Return on Assets:

Free Cash Flow:

Economic Value Added:

Total Shareholders’ Return:

The average cholesterol level in the general US population is 189 mg/dL. A researcher wants to see if the average cholesterol for men in the US is different from 189 mg/dL. She takes a sample of 81 American males and finds a sample mean of 194 mg/dL and a sample standard deviation of 10.4.

Create a 90% confidence interval for the true average cholesterol level of the general US male population.
What is the 90% confidence interval?

What is the correct interpretation of the confidence interval?

Are the assumptions met?

Conduct a hypothesis test at the 0.10 significance level to test the researcher’s question.
What are the hypotheses?

What is the significance level? A. 0.01B. 0.04 C. 0.05 D. 0.10
What is the value of the test statistic?

What is the p-value?

Let us consider a 100-micron diameter spherical cell at room temperature with a cell membrane that has capacitance of one microfarad/cm2. Initially, there is no potassium in the system. However, let us introduce a potassium-anion salt into the system such that you have a concentration of 52 times more on the inside than the outside. (For this case, it is 130 mM inside and 2.5 mM outside.) Let us assume that only potassium can diffuse through the cell. At the beginning (with no salt), the membrane potential is 0 mV; however, once the salt was introduced, potassium will diffuse out such that an equilibrium potential of -100 mV is reached. How many potassium ions must diffuse out of the inside of the cell to produce a change from 0 to -100 mV?

This week discusses contract law both as a general concept and also contract law a foundation for the provider-patient or facility-patient relationship.

Give an example of a contract that you or someone you know has signed. We sign these things all the time from buying a car to a washing machine to leasing an apartment to going bungee jumping, etc.

Please explain who the parties are (buyer-seller; patient-doctor; leasor-lessee).

Let us know whether you read the terms of the contract.

Tell us whether there was any consideration (payment of money or deposit of something of value).

Let us know something that could be considered a breach of the contract (hypothetically).

Discuss what you think the damages could be.

1-a.What’s the difference between nominal and real GDP? Which one is a better macroeconomic indicator? Why or why not?

1-b. What’s the annual nominal and real GDP growth rate of the US in the last 5 years? What’s conclusion can you make from those data (.i.e. Do you think the US economy is improving or slowing down?)

1-c. Define GDP per capita. Compare and contrast the GDP per capita in the US in the past 5 years compared to China? Explain your findings.   

DQ # 2

2- What’s the difference between Consumer Price Index (CPI) and GDP deflator ? Which one is a more accurate measure of the inflation rate? Why?

#1

A) Suppose, the world price for cars is $10,000. Further, the US has a quantity demand at that price of 1,000 cars, and a quantity supplied of 200. How many cars will the US import to satisfy domestic demand?

B) From the previous question, suppose the US imposes a $2,000 tariff on each car. Further, suppose that domestic quantity demand falls by 200 and the domestic quantity supplied rises by 200. What is the new quantity of imports? How does a tariff harm societal welfare?

Martinez Company began operations on January 1, 2019, adopting the conventional retail inventory system. None of the company’s merchandise was marked down in 2019 and, because there was no beginning inventory, its ending inventory for 2019 of $38,300 would have been the same under either the conventional retail system or the LIFO retail system.

On December 31, 2020, the store management considers adopting the LIFO retail system and desires to know how the December 31, 2020, inventory would appear under both systems. All pertinent data regarding purchases, sales, markups, and markdowns are shown below. There has been no change in the price level.

Determine the cost of the 2020 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method. (Round ratios for computational purposes to 2 decimal place, e.g. 78.72% and final answers to 0 decimal places, e.g. 28,987.)