Problem 9-4A (Video)

Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2020 are as follows.

January

February

Sales$360,000$400,000

Direct materials purchases120,000125,000

Direct labor90,000100,000

Manufacturing overhead70,00075,000

Selling and administrative expenses79,00085,000

All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,000 of depreciation per month.

Other data:

1.Credit sales: November 2019, $250,000; December 2019, $320,000.

2.Purchases of direct materials: December 2019, $100,000.

3.Other receipts: January—Collection of December 31, 2019, notes receivable $15,000;

                      February—Proceeds from sale of securities $6,000.

4.Other disbursements: February—Payment of $6,000 cash dividend.

The company’s cash balance on January 1, 2020, is expected to be $60,000. The company wants to maintain a minimum cash balance of $50,000.
Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February.

Expected Collections from Customers

January

February

November

$

$

December

January

February

    Total collections$$

Expected Payments for Direct Materials

January

February

December

$

$

January

February

    Total payments$$

Prepare a cash budget for January and February in columnar form.

COLTER COMPANY
Cash Budget

For the Two Months Ending February 28, 2020February 28, 2020For the Quarter Ending February 28, 2020

January

February

Ending Cash BalanceManufacturing OverheadNotes ReceivableExcess (Deficiency) of Available Cash Over Cash DisbursementsTotal DisbursementsReceiptsRepaymentsTotal ReceiptsDirect MaterialsSale of SecuritiesBorrowingsDisbursementsFinancingCollections from CustomersDirect LaborSelling and Administrative ExpensesTotal Available CashCash DividendBeginning Cash Balance

$$

AddLess

:

BorrowingsExcess (Deficiency) of Available Cash Over Cash DisbursementsCollections from CustomersTotal DisbursementsTotal Available CashManufacturing OverheadTotal ReceiptsDirect LaborDirect MaterialsRepaymentsFinancingDisbursementsEnding Cash BalanceNotes ReceivableReceiptsSale of SecuritiesSelling and Administrative ExpensesCash DividendBeginning Cash Balance

    Repayments    Receipts    Cash Dividend    Excess (Deficiency) of Available Cash Over Cash Disbursements    Sale of Securities    Selling and Administrative Expenses    Total Available Cash    Notes Receivable    Total Disbursements    Total Receipts    Beginning Cash Balance    Collections from Customers    Borrowings    Disbursements    Direct Labor    Direct Materials    Ending Cash Balance    Financing    Manufacturing Overhead    

    Manufacturing Overhead    Notes Receivable    Sale of Securities    Beginning Cash Balance    Total Disbursements    Excess (Deficiency) of Available Cash Over Cash Disbursements    Total Receipts    Repayments    Direct Materials    Receipts    Collections from Customers    Selling and Administrative Expenses    Total Available Cash    Cash Dividend    Borrowings    Direct Labor    Disbursements    Financing    Ending Cash Balance    

    Cash Dividend    Beginning Cash Balance    Total Receipts    Disbursements    Direct Labor    Borrowings    Notes Receivable    Total Disbursements    Financing    Total Available Cash    Collections from Customers    Direct Materials    Manufacturing Overhead    Receipts    Sale of Securities    Ending Cash Balance    Repayments    Selling and Administrative Expenses    Excess (Deficiency) of Available Cash Over Cash Disbursements    

    Disbursements    Total Receipts    Sale of Securities    Total Disbursements    Cash Dividend    Total Available Cash    Ending Cash Balance    Manufacturing Overhead    Receipts    Beginning Cash Balance    Notes Receivable    Borrowings    Excess (Deficiency) of Available Cash Over Cash Disbursements    Repayments    Selling and Administrative Expenses    Collections from Customers    Direct Labor    Direct Materials    Financing    

BorrowingsFinancingReceiptsDirect MaterialsCollections from CustomersTotal ReceiptsBeginning Cash BalanceRepaymentsTotal Available CashCash DividendTotal DisbursementsEnding Cash BalanceDisbursementsManufacturing OverheadDirect LaborExcess (Deficiency) of Available Cash Over Cash DisbursementsNotes ReceivableSelling and Administrative ExpensesSale of Securities

AddLess

:

Manufacturing OverheadFinancingExcess (Deficiency) of Available Cash Over Cash DisbursementsRepaymentsCash DividendDirect LaborTotal Available CashBorrowingsBeginning Cash BalanceSelling and Administrative ExpensesEnding Cash BalanceTotal DisbursementsSale of SecuritiesNotes ReceivableReceiptsTotal ReceiptsDirect MaterialsCollections from CustomersDisbursements

    Ending Cash Balance    Cash Dividend    Excess (Deficiency) of Available Cash Over Cash Disbursements    Beginning Cash Balance    Manufacturing Overhead    Selling and Administrative Expenses    Direct Labor    Collections from Customers    Direct Materials    Total Disbursements    Total Available Cash    Financing    Disbursements    Notes Receivable    Borrowings    Total Receipts    Receipts    Repayments    Sale of Securities    

    Total Available Cash    Cash Dividend    Selling and Administrative Expenses    Total Disbursements    Total Receipts    Borrowings    Direct Materials    Beginning Cash Balance    Excess (Deficiency) of Available Cash Over Cash Disbursements    Financing    Collections from Customers    Repayments    Manufacturing Overhead    Notes Receivable    Receipts    Direct Labor    Disbursements    Ending Cash Balance    Sale of Securities    

    Excess (Deficiency) of Available Cash Over Cash Disbursements    Disbursements    Notes Receivable    Financing    Receipts    Collections from Customers    Sale of Securities    Manufacturing Overhead    Ending Cash Balance    Direct Materials    Total Disbursements    Repayments    Selling and Administrative Expenses    Borrowings    Direct Labor    Beginning Cash Balance    Total Available Cash    Total Receipts    Cash Dividend    

    Total Available Cash    Borrowings    Direct Labor    Manufacturing Overhead    Disbursements    Repayments    Total Receipts    Cash Dividend    Direct Materials    Ending Cash Balance    Receipts    Beginning Cash Balance    Financing    Selling and Administrative Expenses    Total Disbursements    Excess (Deficiency) of Available Cash Over Cash Disbursements    Notes Receivable    Collections from Customers    Sale of Securities    

    Total Disbursements    Disbursements    Direct Materials    Direct Labor    Ending Cash Balance    Borrowings    Excess (Deficiency) of Available Cash Over Cash Disbursements    Financing    Manufacturing Overhead    Notes Receivable    Selling and Administrative Expenses    Receipts    Repayments    Total Receipts    Cash Dividend    Sale of Securities    Total Available Cash    Collections from Customers    Beginning Cash Balance    

    Total Available Cash    Beginning Cash Balance    Direct Labor    Cash Dividend    Sale of Securities    Total Disbursements    Total Receipts    Borrowings    Financing    Collections from Customers    Excess (Deficiency) of Available Cash Over Cash Disbursements    Direct Materials    Disbursements    Selling and Administrative Expenses    Ending Cash Balance    Manufacturing Overhead    Notes Receivable    Receipts    Repayments    

Total DisbursementsTotal ReceiptsManufacturing OverheadCollections from CustomersCash DividendBeginning Cash BalanceNotes ReceivableFinancingDirect LaborBorrowingsRepaymentsDirect MaterialsDisbursementsExcess (Deficiency) of Available Cash Over Cash DisbursementsEnding Cash BalanceReceiptsSale of SecuritiesSelling and Administrative ExpensesTotal Available Cash

Notes ReceivableCollections from CustomersSale of SecuritiesDirect MaterialsCash DividendTotal DisbursementsDisbursementsBeginning Cash BalanceManufacturing OverheadExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingDirect LaborReceiptsRepaymentsEnding Cash BalanceSelling and Administrative ExpensesTotal Available CashTotal ReceiptsBorrowings

AddLess

:

RepaymentsDirect MaterialsCash DividendManufacturing OverheadSale of SecuritiesSelling and Administrative ExpensesBeginning Cash BalanceFinancingBorrowingsTotal ReceiptsCollections from CustomersNotes ReceivableReceiptsDisbursementsTotal Available CashTotal DisbursementsDirect LaborEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash Disbursements

AddLess

:

Excess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadTotal Available CashBeginning Cash BalanceCollections from CustomersCash DividendTotal ReceiptsRepaymentsReceiptsDirect LaborNotes ReceivableBorrowingsDirect MaterialsDisbursementsEnding Cash BalanceSale of SecuritiesSelling and Administrative ExpensesTotal Disbursements

Notes ReceivableCash DividendEnding Cash BalanceFinancingManufacturing OverheadReceiptsRepaymentsExcess (Deficiency) of Available Cash Over Cash DisbursementsSale of SecuritiesDirect LaborCollections from CustomersSelling and Administrative ExpensesTotal DisbursementsTotal Available CashBeginning Cash BalanceTotal ReceiptsBorrowingsDirect MaterialsDisbursements

$$

Quantitative Problem 1: Assume today is December 31, 2019. Barrington Industries expects that its 2020 after-tax operating income [EBIT(1 – T)] will be $430 million and its 2020 depreciation expense will be $65 million. Barrington's 2020 gross capital expenditures are expected to be $110 million and the change in its net operating working capital for 2020 will be $25 million. The firm's free cash flow is expected to grow at a constant rate of 6% annually. Assume that its free cash flow occurs at the end of each year. The firm's weighted average cost of capital is 8.4%; the market value of the company's debt is $2.6 billion; and the company has 190 million shares of common stock outstanding. The firm has no preferred stock on its balance sheet and has no plans to use it for future capital budgeting projects. Also, the firm has zero non-operating assets. Using the corporate valuation model, what should be the company's stock price today (December 31, 2019)? Do not round intermediate calculations. Round your answer to the nearest cent.
$   per share

Quantitative Problem 2: Hadley Inc. forecasts the year-end free cash flows (in millions) shown below.

The weighted average cost of capital is 12%, and the FCFs are expected to continue growing at a 4% rate after Year 5. The firm has $25 million of market-value debt, but it has no preferred stock or any other outstanding claims. There are 18 million shares outstanding. Also, the firm has zero non-operating assets. What is the value of the stock price today (Year 0)? Round your answer to the nearest cent. Do not round intermediate calculations.
$   per share

According to the valuation models developed in this chapter, the value that an investor assigns to a share of stock is dependent on the length of time the investor plans to hold the stock.

The statement above is -Select-truefalseCorrect 2 of Item 2.

Case Problem:

John invents The Night Truck, a mobile night-shop with home delivery service between 8

pm and 6 am.

We are end December 2019 and John needs your help to evaluate this project. The project could generate annual sales of 150.000 € in 2020. The sales could then increase by 10% a year. John anticipates that a new regulation as from 2024 would prevent the sales of

alcohol during the night, meaning that sales would stop on the 31st of December 2023. Cost of sales amounts to 60% of sales.

The project requires a new warehouse as well as two trucks. The initial total investment (in 2019) is estimated at 200.000 € (which can be depreciated linearly over 10 years from 2020 onwards). At the end of 2023, the initial investment could be sold for 92,300 €.

John recently travelled to New York, where the concept already exists, to study the feasibility of the project. This trip cost 5.000 € and will be paid in 2020. In 2020, accounts receivable would increase by 75,000 €, inventories by 25.000 € and accounts payable by 50.000 €. Those accounts will stay stable until 2022, with the exception of inventories which John expects to further increase by 10.000 € in 2022 to meet the increasing demand. At the end of the project, all these amounts would be recovered.

The company is subject to a tax rate of 25%. Assume that all cash flows occur at the end of the year, that the inflation rate is 0% and that the annual risk-free rate is 2% (annually compounded). The risk premium for similar projects is 6% (annually compounded).

Questions:

1) What is a sunk cost? Do you identify such cost for the project?

2) Calculate the incremental net incomes and free cash flows of the project.

3) Which discount rate should you choose to evaluate the project? How do you interpret your answer? What is the main information included in this number?

4) Calculate the NPV of this project? What would you advise to John? Why?

5) What would be the impact of this project on the company’s value (if the project is undertaken...)?

Case Problem:

John invents The Night Truck, a mobile night-shop with home delivery service between 8

pm and 6 am.

We are end December 2019 and John needs your help to evaluate this project. The project could generate annual sales of 150.000 € in 2020. The sales could then increase by 10% a year. John anticipates that a new regulation as from 2024 would prevent the sales of

alcohol during the night, meaning that sales would stop on the 31st of December 2023. Cost of sales amounts to 60% of sales.

The project requires a new warehouse as well as two trucks. The initial total investment (in 2019) is estimated at 200.000 € (which can be depreciated linearly over 10 years from 2020 onwards). At the end of 2023, the initial investment could be sold for 92,300 €.

John recently travelled to New York, where the concept already exists, to study the feasibility of the project. This trip cost 5.000 € and will be paid in 2020. In 2020, accounts receivable would increase by 75,000 €, inventories by 25.000 € and accounts payable by 50.000 €. Those accounts will stay stable until 2022, with the exception of inventories which John expects to further increase by 10.000 € in 2022 to meet the increasing demand. At the end of the project, all these amounts would be recovered.

The company is subject to a tax rate of 25%. Assume that all cash flows occur at the end of the year, that the inflation rate is 0% and that the annual risk-free rate is 2% (annually compounded). The risk premium for similar projects is 6% (annually compounded).

Questions:

1) What is a sunk cost? Do you identify such cost for the project?

2) Calculate the incremental net incomes and free cash flows of the project.

3) Which discount rate should you choose to evaluate the project? How do you interpret your answer? What is the main information included in this number?

4) Calculate the NPV of this project? What would you advise to John? Why?

5) What would be the impact of this project on the company’s value (if the project is undertaken...)?

P16.9 (LO 4) (EPS with Stock Dividend and Discontinued Operations) Christina Corporation is preparing the comparative financial statements to be included in the annual report to stockholders. Christina employs a fiscal year ending May 31.

Income from operations before income taxes for Christina was $1,400,000 and $660,000, respectively, for fiscal years ended May 31, 2021 and 2020. Christina experienced a loss from discontinued operations of $400,000 on March 3, 2021. A 20% combined income tax rate pertains to any and all of Christina Corporation's profits, gains, and losses.

Christina's capital structure consists of preferred stock and common stock. The company has not issued any convertible securities or warrants and there are no outstanding stock options.

Christina issued 40,000 shares of $100 par value, 6% cumulative preferred stock in 2017. All of this stock is outstanding, and no preferred dividends are in arrears.

There were 1,000,000 shares of $1 par common stock outstanding on June 1, 2019. On September 1, 2019, Christina sold an additional 400,000 shares of the common stock at $17 per share. Christina distributed a 20% stock dividend on the common shares outstanding on December 1, 2020. These were the only common stock transactions during the past 2 fiscal years.

Instructions
Determine the weighted-average number of common shares that would be used in computing earnings per share on the current comparative income statement for:
The year ended May 31, 2020.
The year ended May 31, 2021.
Starting with income from operations before income taxes, prepare a comparative income statement for the years ended May 31, 2021 and 2020. The statement will be part of Christina Corporation's annual report to stockholders and should include appropriate earnings per share presentation.
The capital structure of a corporation is the result of its past financing decisions. Furthermore, the earnings per share data presented on a corporation's financial statements is dependent upon the capital structure.
Explain why Christina Corporation is considered to have a simple capital structure.
Describe how earnings per share data would be presented for a corporation that has a complex capital structure.

Golden Wedding Dress Company designs custom wedding dresses for brides to be. The person preparing the adjusting entries at year-end was unable to complete the adjustments due to illness. You have been given the following unadjusted trial balance along with some additional information for the December 31, 2020, year-end.

Other information:

1. Assume all accounts have a normal balance.
2. 70% of the balance in the Advance Sales account is for wedding dresses to be made and delivered by Golden during 2021; the remaining 30% is from sales earned during 2020.
3. Golden warranties its wedding dresses against defects and estimates its warranty liability to be 2% of adjusted net sales.
4. The 3%, 5-year note payable was issued on October 1, 2020; interest is payable annually each September 30.
5. The mortgage is paid annually on the first day of the next year. The next mortgage payment will be paid consisting of $8,752 interest and $23,727 principal for a total of $32,479.
6. Uncollectible accounts are estimated to be 1.5% of outstanding receivables.
7. A physical count of the inventory showed a balance actually on hand of $61,700.
8. Sarah promised her operations manager a year-end performance bonus of $3,715, which would be paid with her salary in January for high sales achieved this year.

Required:
1. Based on the information provided, journalize the adjusting entries at December 31, 2020.

2. Prepare a classified balance sheet. (Be sure to list the assets and liabilities in order of their liquidity. Round the final answers to the nearest whole dollar amount.)

On October 1, 2020, Mr. Elon Musky starts a business. Mr. Musky chooses December 31 as the fiscal year end for his business. With the cash given to him by his rich uncle, he purchases the following assets:

Class 1 (10%):

                        A $980,000 brick building that will accommodate his manufacturing operations.

Class 8 (20%):

Three billboards costing $1,300 each

                        A cash register worth $2,800

                        A barcode scanner $1,900

                        Furniture and fixtures for a total of $16,000

Class 10.1 (30%):

A BMW sedan that he purchased new for $85,000. The vehicle is used exclusively for business purposes.

Class 12 (100%):

                          Mr. Musky purchased a variety of tools, dies, jigs, patterns and moulds. Although the total spent on these items was $18,000, no individual item costed more than $500.

Class 13 (SL):

                          Elon will need space to store his raw materials and finish goods. On October 1, he signs a 10-year lease with 3 renewal options. Each renewal option allows him to rent the warehouse for an additional 2 years. To meet his storage needs, Mr. Musky immediately spends $45,000 making improvements to the warehouse.

Class 14 (SL):

                          On November 1, Elon purchases a copyright from one of his competitors for $85,000. At the time of the purchase, the copyright had a remaining life of 25 years.

Class 14.1 (5%):

                          Elon spent a total of $5,000 on incorporation fees for his business. He plans to expense as much of these fees as he possibly can. He also acquires two smaller business that he thought would have been his major competitors. With the acquisition of the first business, a payment of $258,000 was made for goodwill. For the acquisition of the second business, a payment of $228,000 was reported for goodwill. Both business are fully absorbed into Elon’s operations.

Class 50 (55%):

                          Mr. Musky acquired four computers, each costing $3,000, and 2 cell phones costing $1,200 each.

Class 53 (50%):

                          Manufacturing equipment of all sorts was acquired at a total cost of $850,000.

During the year 2021, the following transactions took place:

Purchases made during the year.

Class 10.1 (30%):

Feeling that one car was not enough to meet his needs, Elon purchases a high-end Tesla for $130,000. This vehicle is also used exclusively for business purposes.

Class 12 (100%):

More small jigs and dies are purchased for a total of $5,500.

Class 50 (55%):

                        Two iPad tablets at a price of $1,300 each.

Class 53 (50%):

                        A casting machine was purchased for $10,000.

Dispositions of assets that occurred during the year.

Class 14 (SL):

            The copyright is no longer needed and was sold for $65,000.

Class 50 (55%):

            One of the computers was sold for $1,000

Class 53 (50%):

            Manufacturing equipment that had originally been purchased for $3,950 was sold for $4,500.

During the year 2022, the following transactions took place:

Purchases made during the year.

Class 13 (SL):

On November 1, 2022, more improvements were made to the leased warehouse costing a total of $66,000.

Class 53 (50%):

A new manufacturing machine was purchase for $105,000.

Dispositions of assets that occurred during the year.

Class 10.1 (30%):

While speeding on the highway, Mr. Musky lost control of his Tesla and totally destroyed his car. Elon received $85,000 from his insurance company as compensation for his destroyed Tesla.

Class 12 (100%):

Ten dies were sold for total proceeds of $3,300. These dies had been purchased for $450 each.

Class 14.1 (5%):

During the year, Elon sells a portion of his business and as a consequence, receives a payment for goodwill of $272,000.

Required:

Calculate the maximum CCA that can be claimed during the year as well as the closing UCC balances for the years ending December 31, 2020, 2021, and 2022.

Calculate any taxable capital gains, allowable capital losses, recapture or terminal losses resulting from the above transactions.

On October 1, 2020, Mr. Elon Musky starts a business. Mr. Musky chooses December 31 as the fiscal year end for his business. With the cash given to him by his rich uncle, he purchases the following assets:

Class 1 (10%):

                        A $980,000 brick building that will accommodate his manufacturing operations.

Class 8 (20%):

Three billboards costing $1,300 each

                        A cash register worth $2,800

                        A barcode scanner $1,900

                        Furniture and fixtures for a total of $16,000

Class 10.1 (30%):

A BMW sedan that he purchased new for $85,000. The vehicle is used exclusively for business purposes.

Class 12 (100%):

                          Mr. Musky purchased a variety of tools, dies, jigs, patterns and moulds. Although the total spent on these items was $18,000, no individual item costed more than $500.

Class 13 (SL):

                          Elon will need space to store his raw materials and finish goods. On October 1, he signs a 10-year lease with 3 renewal options. Each renewal option allows him to rent the warehouse for an additional 2 years. To meet his storage needs, Mr. Musky immediately spends $45,000 making improvements to the warehouse.

Class 14 (SL):

                          On November 1, Elon purchases a copyright from one of his competitors for $85,000. At the time of the purchase, the copyright had a remaining life of 25 years.

Class 14.1 (5%):

                          Elon spent a total of $5,000 on incorporation fees for his business. He plans to expense as much of these fees as he possibly can. He also acquires two smaller business that he thought would have been his major competitors. With the acquisition of the first business, a payment of $258,000 was made for goodwill. For the acquisition of the second business, a payment of $228,000 was reported for goodwill. Both business are fully absorbed into Elon’s operations.

Class 50 (55%):

                          Mr. Musky acquired four computers, each costing $3,000, and 2 cell phones costing $1,200 each.

Class 53 (50%):

                          Manufacturing equipment of all sorts was acquired at a total cost of $850,000.

During the year 2021, the following transactions took place:

Purchases made during the year.

Class 10.1 (30%):

Feeling that one car was not enough to meet his needs, Elon purchases a high-end Tesla for $130,000. This vehicle is also used exclusively for business purposes.

Class 12 (100%):

More small jigs and dies are purchased for a total of $5,500.

Class 50 (55%):

                        Two iPad tablets at a price of $1,300 each.

Class 53 (50%):

                        A casting machine was purchased for $10,000.

Dispositions of assets that occurred during the year.

Class 14 (SL):

            The copyright is no longer needed and was sold for $65,000.

Class 50 (55%):

            One of the computers was sold for $1,000

Class 53 (50%):

            Manufacturing equipment that had originally been purchased for $3,950 was sold for $4,500.

During the year 2022, the following transactions took place:

Purchases made during the year.

Class 13 (SL):

On November 1, 2022, more improvements were made to the leased warehouse costing a total of $66,000.

Class 53 (50%):

A new manufacturing machine was purchase for $105,000.

Dispositions of assets that occurred during the year.

Class 10.1 (30%):

While speeding on the highway, Mr. Musky lost control of his Tesla and totally destroyed his car. Elon received $85,000 from his insurance company as compensation for his destroyed Tesla.

Class 12 (100%):

Ten dies were sold for total proceeds of $3,300. These dies had been purchased for $450 each.

Class 14.1 (5%):

During the year, Elon sells a portion of his business and as a consequence, receives a payment for goodwill of $272,000.

Required:

Calculate the maximum CCA that can be claimed during the year as well as the closing UCC balances for the years ending December 31, 2020, 2021, and 2022.

Calculate any taxable capital gains, allowable capital losses, recapture or terminal losses resulting from the above transactions.

Which of the following is an abstract statement?

Multiple Choice

Top of Form

Most of our employees produce highly satisfactory work.

Of the 15 candidates who applied for the job, 12 had advanced business degrees.

The new international sales division will be launched in October 2018.

Income for the last quarter of 2015 was higher by 10 percent.

Karishma accepted the CEO position on December 20, 2015.

part a. Drawing from Dynamic Capability theory, what recommendations would you make to Under Armour’s CEO Kevin Plank to create a winning strategy in the rapidly changing environment? Provide three (3) recommendations to support your answer.

part b.Evaluate critically the three (3) key elements of Under Armour’s strategy, the management need to address as top priority to stay competitive.

Understanding Finance (30%):

The CEO needs you to explain the following concepts which deeply trouble him:

a. What is advantage and disadvantages between raising money from debt and equity?
b. What is purpose of Treasury shares?
c. Explain the benefits and downside of different depreciation policies such as straight line and declining method?
d. Explain what is financial leverage and its advantage and disadvantage.