Implications of a Change and risk.
Implications of a Change and risk.
What are the implications of a change in the return on equity with an increase in debt financing? What is the relationship between business risk, financial risk, and
beta (systematic or market risk)? How does the degree of operating and financial leverage change the profitability of the firm when sales levels change significantly.
Use examples and explain your answers?
Fundamental Concepts of Corporate Finance
Fundamental Concepts of Corporate Finance
1.) What is a firm’s fundamental, or intrinsic, value? What might cause a firm’s intrinsic value to be different than its actual market value? 2.) Edmund Enterprises
recently made a large investment to upgrade its technology. Although these improvements won’t have much of an impact on performance in the short run, they are expected
to reduce future costs significantly. What impact will this investment have on Edmund Enterprises’ earnings per share this year? What impact might this investment have
on the company’s intrinsic value and stock price? 3.) What are financial intermediaries, and what economic functions do they perform? 4.) Is an initial public offering
an example of a primary or a secondary market transaction? 5.) If a “typical” firm reports $20 million of retained earnings on its balance sheet, can the firm
definitely pay a $20 million cashdividend? 6.) Explain the following statement: “Whereas the balance sheet can be thought of as a snapshot of the firm’s financial
position at a point in time, the income statement reports on operations over a period of time.” 7.) What is operating capital, and why is it important? 8.) Explain the
difference between NOPAT and net income. Which is a better measure of the performance of a company’s operations? 9.) What is free cash flow? Why is it the most
important measure of cash flow? 10.) If you were starting a business, what tax considerations might cause you to prefer to set it up as a proprietorship or a
partnership rather than as a corporation?
Investment & Portfolio Management Analysis and Evaluation of International Investments International investment is a prudent part of any investment portfolio.
International investment helps to diversify the investment portfolio. Although, international investments are beneficial, they are not risk free. In addition,
international investors should be ready with some long-term plans spread over a period of 5 to 10 years in order to decrease the risk of loss due to a slump in
markets. To complete Module 5 SLP, please read the information in the background material, look for more information, and then respond to the following tasks: 1) For
this module, choose one of the AMEX International Indexes [http://www.amex.com/?href=/etf/EtMain.jsp] to invest some of your imaginary money in. Look under exchange
traded funds (ETFS) for information about their international indices. Report what index (or indexes) you chose, and why. Also report how much you chose to invest, and
why. You are required to invest at least $120,000 in these indexes. You obtain the money by selling some of the securities that are currently held in your portfolio.
Assume that you sell the securities at their present market prices. 2) Provide a table showing the present composition of your portfolio after the purchase of the
international fund, and the present market value of this portfolio. 3) Comment on the performance of your investments during this course session. Remember to consider
the market value of the portfolio as of the date on which you prepare the report. As this is the final part of the session long project, you are now required to review
your investment performance during this session.
Investment & Portfolio Management: Using Mutual Fund Investment Strategies One way to diversify your portfolio is to invest in the mutual funds.
A mutual fund is a professionally managed type of collective investment that pools money from many investors to buy stocks, bonds, short-term money market instruments,
and/or other securities. Go surf the web and choose one to three mutual funds (stock funds only) to buy into with some of your imaginary $894,000. You should invest at
least $100,000 in mutual funds. In order to get the necessary money to buy mutual funds you might want to sell some of the securities in your portfolio. You must do so
at the market price at the closing day of your imaginary transactions. 1) Which mutual fund or funds did you choose, and why? Please include a discussion about your
choice of active or passive funds. 2) How much did you spend, including transaction fees? 3) Prepare and display a table showing the development of your initial
$894,000 portfolio starting from Module 1 to its position at the end of Module 3. 4) Based on your analysis and findings, what would you recommend to other investors?
Would you recommend the mutual funds that you chose to other investors? Why?
Finance: Insurance Costs 1: Marisa has a policy with replacement cost coverage and 80% co-insurance, and has a loss of $100,000 on her house.
The replacement cost is $400,000 and the total policy coverage is $300,000. Since the loss is less than the coverage, she expects to get the full amount of the claim
paid by the insurance company. Is she correct? Why? How much will the insurance company reimburse her for? 2: MacKenzie has a personal automobile policy with coverage
of $25,000/$50,000/$10,000, $5,000 for medical payments and $250 deductible for collision insurance. How much will her insurance reimburse in each of the following
conditions? Will she have any out-of-pocket expenses? (Show your work). a) MacKenzie runs a red light and collides with another car resulting in the following losses:
-replacement of trailer hitch: $200 -replacement of rear bumper: $150 -replacement of computer being carried in back seat: $300 -replacement of rear windshield: $100
b) Driving home from work in a snowstorm, MacKenzie’s husband, Bill, who was driving MacKenzie’s car, hit a Mercedes, slid into a guardrail, and knocked down a
telephone pole. Damages to the Mercedes, the guardrail, and the telephone pole were $8,500, $2,000, and $4,500, respectively. c) MacKenzie was in an accident where she
was found to be at fault. Four passengers were badly injured and were awarded $15,000 each because of her negligence.
Short-Term Vs. Long-Term Profits Managers should not focus on the current stock value because doing so will lead to overemphasis on short-term profits at the expense
of long-term profits.
In your post, explain what is meant by this statement. Describe how management might decide whether to focus on short term or long term goals and how that decision
impacts the organization. Next, Compute an example of how focusing on short term profits can be detrimental to long term profits. Share your opinion regarding whether
you feel it’s a better option to focus on short term or long term goals. Use evidence from the text or external sources to support your position.
Analyzing Fixed and Variable Costs in the Healthcare Field .
Analyzing Fixed and Variable Costs in the Healthcare Field .
Choose the best answer for each of the following: 1. In the long run: a. All costs are fixed b. All costs are mixed c. All costs are variable d. Paying a monthly
‘budget’ amount for utilities is a fixed cost 2. Which of the following is most likely a fixed cost? a. Income taxes b. The cost of merchandise sold c. Depreciation
taken on equipment d. The cost of commissioned sales people e. All of the above 3. Which of the following is most likely a variable cost? a. Depreciation taken on an
office building b. Wages for production workers c. Interest on corporate bonds d. Rent on an office building e. None of the above 4. The use of operating leverage: a.
Requires a teeter totter to be installed in the office b. Requires the firm to have only variable costs c. Increases the breakeven level d. Eliminates all fixed costs
e. None of the above 5. Operating leverage is: a. Always bad b. Always good c. Good, when the economy is bad d. Good when the economy is good 6. The goal of breakeven
analysis is to: a. Avoid paying taxes b. Earn as much as your competitors c. Set variable costs equal to fixed costs d. Determine long-term investment levels e.
Determine the minimum volume of business to avoid a loss 7. Comparing a capitated environment to a fee-for-service environment; in a capitated environment: a. Each
additional visit creates costs without a corresponding increase in revenues b. The total revenues line on a CVP graph is flat rather than upward sloping c. Less
utilization rather than more utilization enhances profitability d. Providers of health services also take on an insurance function e. All of the above 8. In a multi-
service facility, which of the following is direct cost? a. Electricity b. Custodial services c. Depreciation on the building d. Nurse pay in one department e. All of
the above are direct costs 9. A good cost driver does all of the following except: a. Allocates costs fairly b. Helps in controlling costs c. Can be traditional or
activity based d. Provides greater benefits than its cost e. All of the above are elements of a good cost driver 10. Which costs are most likely allocated? a. Fixed
costs b. Direct costs c. Variable costs d. Indirect costs e. None of the above 11. In allocating support services to other support service departments, which method is
most accurate? a. Direct method b. Reciprocal method c. Step-down method 12. In allocating support services to other support service departments, which method is
easiest? a. Direct method b. Reciprocal method c. Step-down method 13. Activity based costing is: a. Is only suitable for large organizations b. Generally not as
accurate as traditional costing c. Is generally less expensive to implement than traditional costing d. Generally better than traditional costing, but more expensive
to implement than traditional costing 14. Which of the following is not true? a. A price setter usually has a large market share b. Price setters must watch costs more
closely than price takers c. A health provider in a competitive market is usually a price taker d. A health care provider can be both a price setter and a price taker
e. All of the above are true 15. To allocate the cost of Financial Services in a Health Care setting: a. Patient revenues is a better cost driver b. The number of
bills is a better cost driver c. We are better to not allocate the cost of Financial Services d. Using both the number of bills and patient revenues may be the best
method 16. Which is more likely to be used by a price setter wanting to provide a full range of services to constituents at various wealth levels? a. Target costing b.
Full cost pricing c. Cross subsidization d. Marginal cost pricing 17. Which is more likely to be used by a price taker? a. Target costing b. Full cost pricing c. Cross
subsidization d. Marginal cost pricing 18. Government intervention in healthcare, to insure care for the poor, will likely move healthcare providers toward: a. Being
price takers and using target costing b. Being price setters and using target costing c. Being price setters and using cross subsidization d. Being price takers and
using cross subsidization 19. Health care providers are: a. Price takers b. Price setters c. A price setter or price taker, depending on their costing method d. Either
a price setter or price taker, depending on the competition 20. If long-run prices are set on the basis of marginal costs, the organization may: a. Not recover its
total costs b. Not recover its direct costs c. Temporarily build market share d. Not recover its overhead fixed costs e. All of the above 21. To set capitation rates,
which method is best? a. Fee-for-service method b. Demographic approach c. Budgetary, or cost approach d. In general, one approach is as good as another 22. Which is
most likely the shortest? a. Corporate goals b. Vision statement c. Values statement d. Mission statement e. Corporate objectives 23. Which is least likely to change?
a. Corporate goals b. Vision statement c. Values statement d. Mission statement e. Corporate objectives 24. Using the bottom-up, or participatory approach: a. Budgets
are first developed by individuals who are most knowledgeable regarding their departments’ or programs’ financial needs b. Requires component budgets to be sent back
to the original preparers for revision c. Often initially results in an organizational budget that is not financially feasible d. Does not reflect top management’s
perspective from the start e. All of the above 25. In variance analysis, which of the following will provide the largest differences? a. Comparing the static budget to
the actual results b. Comparing the static budget to the flexible budget c. Comparing the actual results to the flexible budget d. We cannot tell 26. During an
economic downturn: a. Conventional budgeting is more useful because the budget is likely to have a great deal of change b. Zero-based budgeting is more useful because
the budget is likely to have a great deal of change c. Conventional budgeting is more useful because the previous budget provides a good starting point d. Zero-based
budgeting is more useful because the previous budget provides a good starting point 27. A cash budget is useful: a. For liquidity planning b. To project cash inflows
and outflows c. Can show when the organization can invest excess cash d. Can show when the organization needs to borrow cash e. All of the above
Trends in Financial Environments for Healthcare What trends or threats are or will impact the financial environment of healthcare organizations?
These may include legislative changes, lack of primary care providers, or changing demographics. How can we best prepare for the impending trends if they are
continuously changing? Identify the pertinent changes that you might experience. What plan would you propose to address the changes? 4-8 pages. APA formatting is
highly recommended, but not required. A minimum of 4 academic references are required. Do not use wikis, blogs, white papers or other non-academic references. If you
are unsure about the quality of the references, please contact your instructor.
The media informs many viewers of deviance and crime
The media informs many viewers of deviance and crime
Question
The media informs many viewers of deviance and crime, victims of crime, and justice in society. Consider and describe the following:
Where do you get your information about:
Deviant behavior
Crime
Victims of crime
Justice for victims
Describe your perception of
Deviant behavior
What behavior is deviant according to your values?
Crime
What do you believe is the root or cause of crime?
What types of crimes do you believe happen most?
Who do you believe commits crime?
Victims of crime
Who do you believe is likely to be a victim?
Have you ever been fearful of a crime occurring to you or your family?
What do you believe about victims that you hear about?
Justice for victims
How do you see justice handled in our society?
What form of punishment do you see as being effective or ineffective?
Loss and Gain Calculations Greg recently inherited a large, family-run farm that primarily produces grain for harvest each year.
Greg has recently been researching the use of futures contracts to improve his returns on his crop each year and reduce the price risk at harvest time. Greg decides to
enter into a futures contract on his grain harvest in March once the crops are in. The current futures price per bushel of grain is $290.50. By May, the price per
bushel had grown to $298 per bushel. A contract calls for the delivery of 1,000 bushels of grain. -Calculate the long position gain or loss in this scenario. –
Calculate the short position gain or loss in this scenario. -Would you recommend doing future contracts like this to Greg? Why, or why not? -Explain how futures
contracts can be both good and bad for someone in Greg’s position.