You need to choose Company ABC’s company vehicle. You have two options: Mercedes or Acura.

Once purchased, assume Company ABC keeps purchasing the same type of vehicle as soon as the useful life is over. John Smith (CEO) says both of these vehicles give him the same level of satisfaction and it all depends on the annualized cost of the car.

Mercedes:

Initial Costs = $100,000

Operating Expenses = $15,000 per year

Has a 4 year life, after which it will sell for $15,500

Acura:

Initial Costs = $85,000

Operating Expenses = $17,600 per year

Has a 3 year life, after which it will sell for $10,100

CCA Rate = 42%

Corporate Tax Rate = 43%

Required Rate of Return = 12%

QUESTION: Find the EAC's of these two vehicles? (Take in tax and CCA tax shield into consideration) Which vehicle do you recommend to Alex and why?

PLEASE SHOW CALCULATIONS AND STEP BY STEP WORK!!!

You are a CEO of a national restaurant chain. You are facing an investment proposal of building 20 new hotels across the country. Since hotel is a new business line for your company, the management finds Hilton Hotel corporation as one pure play company to assist the evaluation of this investment proposal. With the following information, what discount rate should you use to evaluate this investment proposal?

1 year government bond return: 0.85%

10 year government bond return: 2.41%

Expected market risk premium: 5%

Info on Hilton

Equity return: 6.20%

Equity beta: .76

Debt to value ratio: 14%

Marginal tax rate: 40%

Info on your company

Book value of long-term debt: $5,000,000

Book value of equity: $5,000,000

Share price: $15

Number of shares outstanding: 1,000,000

Debt rate premium above government bonds is 3%

Marginal tax rate: 40%

The before tax cost of debt is _______________%

The coronavirus pandemic is a human tragedy, affecting hundreds of thousands of people globally. It is also
having a growing impact on the global value chain, hence the global economy. All serious companies around
the world have therefore found innovative ways of keeping business going nonetheless. One of such notable
companies is Ghana’s Kantanka Inc. The company has established a dedicated team to ensure a simple but well-
managed set of processes that maximize the health and safety of colleagues and customers. This team is led by
the CEO of the company. The focus of the team has been broken down into five distinct work streams:
 Employee management and wellbeing
 Financial stress-testing and contingency planning
 Supply chain monitoring
 Marketing and sales
 Any other business
Kantanka Inc. is a car manufacturing company originating from Ghana which produces low-end vehicles. The
company’s competitive advantage stems from its unconventional but effective and energy efficient technology
which is not found in most vehicles around the world. The dashboard and other interior parts of the vehicles are
made from wood, and the vehicles are powered by car batteries and solar energy.
Recently, they have added on aircrafts and mechanized farming technologies. The company is set to take the
African market by storm. The company decided in 2015 to enter Nigeria and Germany. With the backing of the
government of Ghana, negotiations with both countries succeeded as negotiators from Nigeria and Germany
were in natural sync with the Ghanaian lobbyist contracted.
Once the company has gone international, it was only natural that value chain activities of the company would
have to be rationalized to deal with the expansion, as well as all forms of risk with respect to exchange rate
fluctuations. Speaking of financials, in this coronavirus pandemic period, companies such as Kantanka Inc. that
entered into future contracts and used currency options as hedging instruments would have less to worry about
since excuses from business partners would almost be non-existent.
Recently in 2017, a company from Sậo Tome and Principé, called PreZi contacted Kantanka Inc. to obtain
permission to use its technology. As to whether to agree or not to the agreement is still under scrutiny by
Kantanka’s international expansion team.
a) Discuss five (5) ways the two negotiators can get along in order for their cultural backgrounds not to
affect the outcome of their bargaining process.
b) Explain three (3) financial risks Kantanka Inc would definitely encounter.
c) What five (5) benefits is Kantanka Inc likely to gain from entering the German market?

d) Explain five (5) problems Kantanka Inc’s international expansion team should anticipate before entering
the German market.
e) Explain the contractual strategy that would best characterize the Kantanka-PreZi agreement once agreed
to.

The coronavirus pandemic is a human tragedy, affecting hundreds of thousands of people globally. It is also
having a growing impact on the global value chain, hence the global economy. All serious companies around
the world have therefore found innovative ways of keeping business going nonetheless. One of such notable
companies is Ghana’s Kantanka Inc. The company has established a dedicated team to ensure a simple but well-
managed set of processes that maximize the health and safety of colleagues and customers. This team is led by
the CEO of the company. The focus of the team has been broken down into five distinct work streams:
 Employee management and wellbeing
 Financial stress-testing and contingency planning
 Supply chain monitoring
 Marketing and sales
 Any other business
Kantanka Inc. is a car manufacturing company originating from Ghana which produces low-end vehicles. The
company’s competitive advantage stems from its unconventional but effective and energy efficient technology
which is not found in most vehicles around the world. The dashboard and other interior parts of the vehicles are
made from wood, and the vehicles are powered by car batteries and solar energy.
Recently, they have added on aircrafts and mechanized farming technologies. The company is set to take the
African market by storm. The company decided in 2015 to enter Nigeria and Germany. With the backing of the
government of Ghana, negotiations with both countries succeeded as negotiators from Nigeria and Germany
were in natural sync with the Ghanaian lobbyist contracted.
Once the company has gone international, it was only natural that value chain activities of the company would
have to be rationalized to deal with the expansion, as well as all forms of risk with respect to exchange rate
fluctuations. Speaking of financials, in this coronavirus pandemic period, companies such as Kantanka Inc. that
entered into future contracts and used currency options as hedging instruments would have less to worry about
since excuses from business partners would almost be non-existent.
Recently in 2017, a company from Sậo Tome and Principé, called PreZi contacted Kantanka Inc. to obtain
permission to use its technology. As to whether to agree or not to the agreement is still under scrutiny by
Kantanka’s international expansion team.
a) Discuss five (5) ways the two negotiators can get along in order for their cultural backgrounds not to
affect the outcome of their bargaining process. [5 marks]
b) Explain three (3) financial risks Kantanka Inc would definitely encounter. [3 marks]
c) What five (5) benefits is Kantanka Inc likely to gain from entering the German market?
[5 marks]
d) Explain five (5) problems Kantanka Inc’s international expansion team should anticipate before entering
the German market. [5 marks]
e) Explain the contractual strategy that would best characterize the Kantanka-PreZi agreement once agreed
to. [2 marks]

You are a senior member of management for a development and construction company where the original two owners wish to retire and sell the business. Along with several experienced co-workers, you are considering a buyout of the business. As part of your due diligence, you have performed some analysis of the historical financial statements and determined the following:

·         Audited financial statements indicate a net book value of $4,500,000.

·         The owners recently had the tangible assets appraised and the fair value of assets is $2,000,000 higher than audited book value. Part of the difference results from the owners having acquired several development sites over a period of years that are recorded in the audited financial statements at original cost.

·         A guideline public company recent price to earnings multiple for a comparable public company times weighted average income results in a business value of $9,000,000.

·         Using a discounted cash flow approach with a five-year projection period and terminal value results in a business value of $10,000,000.

You and your co-workers have offered $9,500,000 for the company. The owners will be paid consultants for one year following the purchase of the business so that there will be no loss of key employees.  

The owners are motivated to sell but negotiations are at an impasse. The owners insist that they be paid $11,500,000 - $9,500,000 offered plus the $2,000,000 incremental fair value of assets over book value. How do you respond to the counter-offer of the owners? Explain briefly the reason if you accept or reject the offer

What are the reasons for the appearance of US drug policies "softening" in the US?

You are giving a brief speech to your campus community titled “Lessons From Scandinavian Social Democracies.” Draft this speech, with an emphasis on what we in the US can learn from other political systems. Identify important strengths and/or drawback in the Nordic model.

discuss the advantages and disadvantages of a strong dollar?

who benefits most from a weak dollar?

who benefits most from a strong dollar?

describe under what conditions is a strong US dollar better for the economy than a weak dollar and vice versa?

For many years, Lawton Industries has manufactured prefabricated houses where the houses are constructed in sections to be assembled on customers’ lots. The company expanded into the precut housing market in 2006 when it acquired Presser Company, one of its suppliers. In this market, various types of lumber are precut into the appropriate lengths, banded into packages, and shipped to customers’ lots for assembly. Lawton decided to maintain Presser’s separate identity and, thus, established the Presser Division as an investment center of Lawton.

              Lawton uses return on average investment (ROI) as a performance measure the investment defined as operating assets employed. Management bonuses are based in part on ROI. All investments in operating assets are expected to earn a minimum return of 15% before income taxes. Presser’s ROI has ranged from 19.3% to 22.1% since it was acquired in 2006. The division had an investment opportunity in the year just ended that had an estimated ROI of 18%, but Presser’s management decided against the investment because it believed the investment would decrease the division’s overall ROI.

              Presser’s operating statement for the year just ended is presented next. The division’s operating assets employed were $12,600,000 at the end of the year, a 5% increase over the balance at the end of the previous year.

_______________________________________________________________________

                                                          Presser Division Operating Statement

                                                                  For the year ended Dec. 31

                                                                             ($000 omitted)

_______________________________________________________________________

              Sales Revenue                                                                                                                   $24,000

              Cost of Goods Sold                                                                                                              15,800

                   Gross Profit                                                                                                                      $8,200

              Operating Expenses

              Administrative                                                                          $2,140

              Selling                                                                                         3,600                              5,740

              Income from operations

                   Before income taxes                                                                                                      $2,460

_______________________________________________________________________

Questions

1. Calculate these performance measures for the year just ended for the Presser Division of Lawton Industries:

1. Return on average investment in operating assets employed (ROI).
2. Residual income calculated on the basis of average operating assets employed.

2. Would the management of Presser Division have been more likely to accept the investment opportunity it had during the year if residual income were used as a performance measure instead of ROI? Explain your answer.

The Presser Division is a separate investment center with Lawton Industries. Identify and describe the items Presser must control if it is to be evaluated fairly by either the ROI or residual income performance measures

1. Antigen presentation is an important link between innate and acquired (adaptive) immunity. Explain in detail how the process occurs. Please include: what cells might be involved, the differences between MHC 1 and MHC 2 and how antigen presentation leads to differential activation of acquired immunity.