3 page report on the impression of the Supreme Court

Question
	
The following is a written assignment based on the attached article. Your completed assignment should be 2-4 pages, double-spaced with all citations properly footnoted.
The article presents an analysis of the current outlook of the highest court in the United States. We often think of courts (and especially the Supreme Court) as dispassionate and thoroughly objective institutions. Yet as the text materials in Chapter One discuss, there are various schools of jurisprudence, some of whom try to examine the ways in which courts really operate. Robin Conrad and Ralph Nader have opposed views on the current court that appear prominently in the article.
Describe their respective viewpoints. Does this article change your impression of the Supreme Court? Why or why not?
Supreme Court Inc.

By JEFFREY ROSEN

Published: March 16, 2008

The New York Times
	

Question_DOC1_Dec11_2nd

Question
	
41. Barney's Bagels invested in a new oven for $12,000. The oven
reduced the amount of time for baking which increased production and

sales for five years by the following amounts of cash inflows:

Using the averaging method, the payback period for the investment
in the oven would be:

Page 6 of 55

A. 5.0 years.

B. 2.4 years.

C. 2.0 years.

D. 1.7 years.

42. Which of the following statements concerning payback analysis
is true?

A. An investment with a longer payback is preferable to an
investment with a shorter payback.

B. The payback method ignores the time value of money concept.

C. The payback method and the unadjusted rate of return are
different approaches that will consistently lead to the same conclusion.

D. All of the other answers are correct.

43. Which of the following doesnotrepresent an advantage of the unadjusted rate of
return over the payback method for evaluating capital

projects?

A. The unadjusted rate of return method considers the investment's
profitability.

B. The unadjusted rate of return method measures the recovery of
the initial investment in the project.

C. The unadjusted rate of return is a percentage that can be
compared to a stated hurdle rate.

D. None of the above represents an advantage.

44. Cash outflows generated by capital investments include all of
the following except:

A. purchase discounts

B. transportation costs

C. increased operating expenses

D. increase in the required amount of working capital

45. Which capital budgeting technique defines returns in terms of
income instead of cash flows?

A. The unadjusted rate of return method

B. The internal rate of return technique

C. The net present value technique

D. The payback period

46. Eddy Company has an opportunity to purchase an asset that will
cost the company $25,000. The asset is expected to add $7,500 per year

to the company's net income. Assuming the asset has a five-year
useful life and zero salvage value, the unadjusted rate of return based on

the average investment will be:

A. 60%.

B. 30%.

C. 15%.

D. none of the above answers are correct.

47. Finebaum Company plans to invest in a new operating plant that
is expected to cost $600,000. The projected incremental income from the

investment is as follows:

The unadjusted rate of return on the initial investment would be
approximately:

A. 5.0%.

B. 6.7%.

C. 13.3%.

D. 15.0%.

48. Select theincorrectstatement regarding postaudits of capital
investment decisions.

A. A postaudit should be conducted at the end of the project.

B. The postaudit helps management determine whether a project that
had been accepted should have been rejected.

Page 7 of 55

C. A postaudit is not necessary for a capital investment selected
using a technique that considers the time value of money.

D. The goal of a postaudit is to provide feedback that can be used
to improve the accuracy of future capital investment decisions.

49. The purposes of the postaudit for capital investments include
all of the followingexcept:

A. continuous improvement.

B. punishment for poor capital investment decisions.

C. determining whether the project generated the results expected.

D. ensuring that managers closely scrutinize capital investment
decisions.

50. The review of a capital budgeting decision to determine
whether a project was accepted that should have been rejected is referred to
as:

A. an audit.

B. a preaudit.

C. a postaudit.

D. a capital review.

51. Six years ago, Torrence Hardware paid a contractor $45,000 to
expand the store. At that time, the company calculated a net present value

of about $6,000 for the expansion. Now, the company believes that
the investment increased annual cash inflows by $8,000 per year for

each of the six years. Torrence has a desired rate of return of
10%. What was the net present value actually achieved for this capital

investment? (Do not round your PV factors and intermediate
calculations. Round to the nearest dollar.)

A. ($10,158)

B. ($3,000)

C. $34,842

D. $(9,207)

52. Lane Company is considering purchasing a capital investment
that is expected to provide annual cash inflows of $10,000 per year for 3

years. Assuming that Lane's required rate of return is 8%, what is
the present value of these cash inflows? (Do not round PV factors and

intermediate calculations. Round your final answer to the nearest
dollar.)

A. $25,771

B. $24,869

C. $33,121

D. $24,018

53. Phoenix Company is considering purchasing a capital investment
that is expected to provide annual cash inflows of $15,000 per year for 3

years. Assuming that the required rate of return is 10%, what is
the present value of these cash inflows? (Do not round PV factors and

intermediate calculations. Round your final answer to the nearest
dollar.)

A. $38,656

B. $37,303

C. $36,027

D. $23,665

54. Santa Fe Company is considering the purchase of equipment that
would cost $40,000 and offer annual cash inflows of $10,500 over its

useful life of 5 years. Assuming a required rate of return of 8%,
what is the net present value of this investment opportunity?

A. $(1,923)

B. $40,000

C. $1,923

D. $41,923

55. George Company is considering the purchase of equipment that
would cost $40,000 and offer annual cash inflows of $10,500 over its

useful life of 5 years. Assuming a desired rate of return of 10%,
is the project acceptable?

A. No, since the negative net present value indicates the
investment will yield a rate of return below the desired rate of return.

B. Yes, since the positive net present value indicates the
investment will earn a rate of return lower than the desired rate of return.

C. Yes, since the positive net present value indicates the
investment will earn a rate of return in deficit of 10%.

D. The answer cannot be determined.

Page 8 of 55

56. Crown Company is considering purchase of equipment that costs
$60,000. If the useful life is expected to be 5 years and Crown's required

rate of return is 10%, what is the minimum annual cash inflow that
the equipment must offer for the investment to be acceptable? (Do not

round your PV factors and intermediate calculations. Round your
final answer to the nearest dollar.)

A. $15,027

B. $15,828

C. $16,644

D. $18,928

57. Graves Company is considering purchase of equipment that costs
$60,000 and is expected to offer annual cash inflows of $19,000.

Graves' minimum required rate of return is 10%. How many years
must the cash flows last, for the investment to be acceptable? (Do not

round your PV factors and intermediate calculations. Round to
nearest whole year.)

A. 1

B. 2

C. 3

D. 4

58. Forrest Company is considering purchase of equipment that
costs $60,000 and is expected to offer annual cash inflows of $17,000 for 5

years. Forrest Company's required rate of return is 10%. What is
the internal rate of return of this investment project?

A. 13.79%

B. 5.2%

C. 17.65%

D. 12.86%

59. Bern Corporation is considering an investment in equipment
that would cost $50,000 and provide annual cash inflows of $14,000. The

company's required rate of return is 12%; the internal rate of
return for the investment is 10.5%. Should the company make this

investment?

A. Yes, since the internal rate of return is more than the
company's required rate of return.

B. Yes, since the internal rate of return is less than the
company's required rate of return.

C. No, since the internal rate of return is less than the
company's required rate of return.

D. The answer cannot be determined.

60. Frisco Corporation is considering two projects, A and B, and
it has gathered the following estimates for the projects:

What is the net present value for project A?

A. $7,360

B. $6,100

C. $1,260

D. None of the above answers are correct.

61. Frisco Corporation is considering two projects, A and B, and
it has gathered the following estimates for the project

What is the present value index for project B?

A. 1.096

B. 1.124

C. 0.889

D. 0.913

Page 9 of 55

62. York Corporation is considering purchasing equipment that
costs $80,000 and is expected to provide the following cash inflows over its

five-year useful life:

What is the payback period of this investment project (rounded to
the nearest year)?

A. 2 years

B. 3 years

C. 4 years

D. 6 years

63. Capital investment decisions involve all of the following,except:

A. the acquisition of short-term operational assets.

B. projects requiring relatively long periods of time and large
cash flows.

C. the acquisition of long-term operational assets.

D. none of the above answers are correct.

64. A series of equal cash flows at fixed intervals is termed
a(n):

A. net cash flow.

B. lump sum.

C. annuity.

D. return on investment.

65. Which method for evaluating capital investment proposals
reduces the present value of cash outflows from the present value of cash

inflows?

A. Net present value

B. Internal rate of return

C. Payback method

D. Unadjusted rate of return

66. Which of the following arenotpresent value methods of analyzing capital
investment proposals?

A. Internal rate of return and payback

B. Internal rate of return and net present value

C. Net present value and payback

D. Payback and unadjusted rate of return

67. Which of the following isnota criteria that is used to determine whether a
project is acceptable under the net present value method?

A. If the net present value is equal to zero

B. If the net present value is greater than zero

C. Book value of existing equipment

D. None of the above answers are correct.

68. Jim Tyler is evaluating a potential capital investment. He has
calculated the net present value using a minimum rate of return of 10%.

Using this rate, the net present value is negative. What does this
tell him about the rate of return expected for the project?

A. If the net present value is negative; the expected rate of
return for the project is less than the 10% minimum or required rate of return.

B. If the net present value is negative; the expected rate of
return for the project is greater than the 10% minimum or required rate of
return.

C. If the net present value is negative; the expected rate of
return for the project is equal to the 10% minimum or required rate of return.

D. None of the other answers are correct.

69. Which method of evaluating capital investment decisions uses
the concept of present value to compute a rate of return?

Page 10 of 55

A. Unadjusted rate of return

B. Internal rate of return

C. Net present value

D. Payback

70. Cash inflows generated by capital investments include all of
the followingexcept:

A. incremental revenues.

B. cost savings.

C. reduction in the amount of required working capital.

D. increase in operating expenses.

71. Cash outflows generated by capital investments include all of
the followingexcept:

A. incremental revenues.

B. initial investment in the capital asset.

C. increase in operating expenses.

D. increase in the amount of required working capital

72. Sarah Meyers is considering alternative proposals that involve
different amounts of investments. To compare different size investment

proposals, it may be helpful for Sarah to prepare a relative
ranking of the proposals by using a(n):

A. net present value.

B. present value index.

C. internal rate of return.

D. none of the above answers are correct.

73. The present value index indicates:

A. the time it will take to recover the initial cash outflow of an
investment.

B. the additional cash inflows from operating activities.

C. the rate of return per dollar invested in a capital project.

D. none of the above answers are correct.

74. The length of time required to recover the initial investment
in a capital asset is known as the:

A. the rate of return.

B. payback method.

C. internal rate of return.

D. unadjusted rate of return.

75. The time value of money concept recognizes that a dollar today
is worth more than a dollar tomorrow. Which of the following isnota

factor in causing the present value of cash inflows to diminish
over time?

A. Current expenses.

B. Earning potential, such as interest.

C. Risk of uncollectability.

D. Inflation reduces future purchasing power.

76. The difference between an ordinary annuity and an annuity due
is:

A. an ordinary annuity represents a present value and an annuity
due represents a future value.

B. an ordinary annuity represents a future value and an annuity
due represents a present value.

C. an ordinary annuity assumes the cash flows occur at the end of
the period and an annuity due assumes the cash flows occur at the

beginning of the period.

D. an ordinary annuity assumes the cash flows occur at the
beginning of the period and an annuity due assumes the cash flows occur at the

end of the period.

Page 11 of 55

True False

True False

True False

True False

True False

True False

True False

True False

True False

True False

77. Candy Cups thinks that offering delivery will increase their
sales. Candy is considering whether to purchase a used delivery truck costing

$12,000. Additional net income from the delivery service will be
$1,400 per year. The truck will last approximately 5 years. What is the

unadjusted rate of return based on the average investment?

A. About 23.3%

B. About 11.7%

C. About 58.3%

D. About 857.1%

78. Which of the following statements isincorrect?

A. The further into the future a cash receipt is expected to
occur, the higher is its present value.

B. The return on investment measures the compensation a company
expects to receive from investing in capital assets.

C. Most companies use their cost of capital to estimate the
minimum return on investment required from capital investments.

D. When a company invests in capital assets, it sacrifices present
dollars for the opportunity to receive future dollars.

79. The process by which management evaluates long-term investment
decisions involving long term operational assets is called:

A. fixed cost analysis.

B. activity based management.

C. strategic business analysis.

D. capital investment analysis.

80. Which of the following statements is correct?

A. A postaudit should be conducted at the time a capital
investment is purchased.

B. The postaudit of a capital investment project should be made
using the same analytical technique that was used in deciding to make the

investment.

C. The purpose of postaudits is to improve a company's
cost-volume-profit analysis.

D. The postaudit process uses expected cash flows and the
company's cost of capital.
	

Bus340 week 8 discussions

Question

 
"Cultural Conflict" Please respond to the following:
From the e-Activity, compare the fundamental differences between a
high context culture and a low context culture. Explain the importance
of understanding the differences that you identified. Discuss the key
ways in which such understanding could enable you to predict the impact
of these differences on the negotiation process between the U.S. and
China, as mentioned in the video.
Compare at least three (3) of the differences between a culture with
 a large-power distance and one with a low-power distance (e.g. the U.S.
 and China). Determine the crucial roles that these types of cultures
play during negotiations between the cultures. Provide a rationale for
your response.
"Cultural Differences" Please respond to
the following:

·
John, a representative of a U.S. manufacturer, is meeting with a
representative from a Chinese supplier in order to establish a new contract.
Describe three (3) aspects of a collectivistic culture that John needs to
consider in order to successfully complete the negotiation process and obtain a
signed contract. Justify your response.

·
From the e-Activity, choose at least two (2) approaches to
negotiating within Chinese culture that differ from similar approaches to
negotiating within American culture. If you were an American negotiator doing
business in China, specify the essential reasons why you should be cognizant of
the cultural differences you chose in order to complete a successful
negotiation.


	

Phase 3 Discussion Board

Question
	
Fundamentals
Task Name:
Phase 3 Discussion Board
Deliverable Length:
See assignment details
Details:
Reminder: Initial Discussion Board posts due by Wednesday, responses due by Sunday
Students will be expected to post their first initial Discussion Board posting by Wednesday of each week. Discussion posts will be graded, and late submissions will be assigned a late penalty in accordance with the late penalty policy found in the syllabus. NOTE: All submission posting times are based on midnight Central Time.
Students are expected to post their responses to peers by Sunday. NOTE: All submission posting times are based on midnight Central Time.
Primary Task Response: Within the Discussion Board area, write 400–600 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.
There are differences between the terms leader and leadership. There are various behavioral theories related to leadership. Kurt Lewin identified three (3) leadership styles: autocratic, democratic, and laissez-faire.
Think about a leader whom you worked with in the past, and respond to the following in discussion:
Discuss the characteristics of the leader.
Is the leader's style autocratic, democratic, or laissez-faire? Why or why not?
How does this leader help his or her followers achieve the organization’s goals?
	

Springdale Shopping Survey

Question
	

Read about the Springdale Shopping Survey at the end of Chapter 2 in the Integrated Cases section in Introduction to Business Statistics. The data set for this assignment is found on the green link SHOPPING. This data set will be used throughout the session so be sure to save an original copy and then perform the weekly calculations on the appropriate data.

Write a short report that includes an introduction, a conclusion paragraph and a body with written results that are backed up with all of the visual presentations of the data asked for in the four problems. It should be double-spaced and in APA style format per the CSU-GC Guide to Writing and APA Requirements.
	

cookbooks online-eco question

Question
	Q:

You are starting your own Internet business. You decide to form a company that will sell cookbooks online. Justcookbooks.com is scheduled to launch 6 months from today. You estimate that the annual cost of this business will be as follows:

Technology (Web design and maintenance)

$5,000

Postage and handling

$1,000

Miscellaneous

$3,000

Inventory of cookbooks

$2,000

Equipment

$4,000

Overhead

$1,000

Part I 1 graph plus calculations

You must give up your full-time job, which paid $50,000 per year, and you worked part-time for half of the year.

The average retail price of the cookbooks will be $30, and their average cost will be $20.Assume that the equation for demand is Q = 10,000 – 9,000P, where

Q = the number of cookbooks sold per month

P = the retail price of books.

Show what the demand curve would look like if you sold the books between $25 and $35.

Part II

Address the following questions:

What is the elasticity of the demand for cookbooks bought this way?

Is the business worth pursuing so far?

Why or why not?

Suppose that you expect to sell about 22,000 cookbooks per month online, and assume your overhead, technology, and equipment costs are fixed. What are your total costs?

What are your marginal costs?

What are the implications of operating in the short run and the long run?

As your business grows, how must you consider the issues regarding diminishing marginal returns and economies of scale?

What market structure have you entered, and why?

What can you do to guarantee success in this market?

Can you use price discrimination in this business?

What pricing strategy might you use?	

general business data bank

Question
	
Essay Questions

 

1. What is the basic difference between
consideration behavior and initiating structure behavior?

 

 

 

 



2. What three factors combine to create the
situation in Leadership Contingency Theory and what combination of the three
best matches a low LPC style? Explain.

 

 

 



3. Describe the three situational elements
under Fiedler’s Contingency Theory that can be described as either favorable or
unfavorable.



 

 



4. According to the path-goal theory of
leadership, one of the leader's roles is to increase rewards. Briefly explain this role.

 

 

 



5. Differentiate between a substitute and
a neutralizer. 

 

 

6.
 Distinguish between charismatic
and transformational leadership.

 

7.
 What are the five bases of power
and which one is generally the most expensive to use?

 

 

	

Law question data bank

Question
	
1.
 In Widom’s research on the relationship
between early child abuse and later delinquency or adult criminal behavior
which of the following were considered to be either validity or reliability
problems?

a.
using public school records and birth
records from local hospitals to select the sample

b.
by using law enforcement data to assess
delinquent and criminal behavior, Windom only identified those who were caught
for their behavior not those who were criminally active but were not caught

c.
by using court data to identify those
for the sample who were abused, Windom only knew about those cases where abuse
came to the attention of the public officials, not all the cases that go
unreported

d.
all of the above



/

2.
 In Sherman
and colleagues’ research dealing with crime hot spots they chose to use ‘calls
for service’ to local law enforcement as a means of measuring where different
types of crimes happened with greatest frequency. They noted some problems with the use of
calls for service. Which of the
following represents those problems?

a.
there is a potential for duplicate calls
to local law enforcement for any one event

b.
there may be false reports, in other
words no crime happened

c.
there can be misleading findings such as
parking lots or hospitals may appear to be hot spots when in fact they are not

d.
all of the above



/



3.
 Which of the following is not a concern about
the use of agency records?

a.
since most agencies are computerized,
there is little cause to be concerned about the quality of the data

b.
expect the expected, it is the
unexpected findings that are worrisome

c.
changes in record-keeping practices can
affect the measurement

d.
data will be accurate because agency
data has to be



/

4.
 In the text, an example was given concerning
the difficulty in trying to measure how much crime happened to victims who were
not residents of South Florida. Since police
only routinely kept records on where victims stayed locally (such as hotel
addresses) researchers could have an additional question added to the incident
recording form asking for the victim’s permanent address. All of the following
would be benefits of that except:

a.
it is much cheaper to add a question to
a form than collecting the data oneself

b.
it is much more expensive to add a
question to a form because it requires all the forms to be reprinted

c.
it allows for more control over the
measurement process

d.
it enhances the reliability of data
collection



/



5.
 Which of the following is accurate concerning
having agencies collect original research data?

a.
cooperation to add research questions is
not as likely to be successful if you are asking for a major additional effort
on the part of the agency staff

b.
the cooperation of the staff and their
organizations are directly proportional to the intrusiveness of the data
collection

c.
if the research project is likely to
save the agency money or improve staff performance the chances of enlisting
assistance is greater

d.
all of the above are accurate



/

6.
 Which of the following statements is most
accurate?

a.
once units of analysis are defined,
sampling agency records is relatively simple

b.
once units of analysis are defined,
sampling agency records is quite complicated

c.
there is no relationship between the
units of analysis used in agency records and the sampling techniques used

d.
you must use all agency records and
cannot select a subset since that will lead to incomplete conclusions



/

7.
 Which of the following represent reliability
or validity concerns when a researcher uses agency records?

a.
the number of general clerical staff
since too few is not good

b.
changes in the operational definitions
the agencies use to specify key terms

c.
maintaining consistent procedures the
agency uses to collect the data over time

d.
agency records are generalizable to
similar agencies



 Which of the following is not accurate
concerning validity and reliability of agency records?

a.
the shorter the time intervals under
study the greater the concern about procedure changes 

b.
longitudinal researchers must be
concerned about changes in operational definitions over time

c.
longitudinal researchers must be
concerned about changes in procedures over time

d.
the longer the time interval under study
the greater the concern about procedure changes

/



8.
 Which of the following would not impact the
validity and reliability of a study using agency records?

a.
discretion of prosecutors in who to
charge and what counts to add

b.
decisions that are made by police
officers to arrest verses give a warning

c.
recognition on the part of the
researcher that criminal justice data is a composite of criminal behavior,
ability to detect that behavior and decisions about system response to that
behavior

d.
decisions made by probation officers to
revoke on new crimes and not technical violations



/



9.
 It is often said that agency data are not
designed for research purposes. Which of
the following support that statement?

a.
some criminal justice agencies collect
data because they are legally required to do so

b.
often the data collected by criminal
justice agencies is not covered under privacy regulations

c.
because variable definitions are
consistent from agency to agency

d.
all of the above 



/

10.
 Which of the following situations would not
have an impact upon error in agency records?

a.
computers have the capacity to magnify
clerical error 

b.
a single crime could be recorded by two
agencies, thus making that event over-represented

c.
having very little data to input 

d.
even rare events can be recorded
improperly



/



11.
 Which of the following is an example of
content analysis in criminal justice research?

a.
counting the number of stories devoted
to the coverage of crime in your local newspaper 

b.
counting the number of robberies that
happen in your city

c.
measuring the average length of time from
arrest to disposition in your city

d.
determining the average number of
inmates housed in your city’s jail on a daily basis



/



12.
 Which of the following is an accurate
statement concerning the use of content analysis?

a.
content analysis involves a statistical
study of messages

b.
content analysis involves a systematic
study of messages and the meaning that those messages convey

c.
content analysis involves only the
analysis of speeches given concerning criminal justice issues

d.
content analysis methods can only be
used with agency reports to determine their applicability



/

13.
 Which of the following would not be an
appropriate target of content analysis?

a.
speeches

b.
newscasts

c.
constitutions

d.
number of domestic violence arrests



/







14.
 They underlying meaning of a communication is
it’s:

a.
latent content

b.
manifest content

c.
coding content

d.
coding scheme



/



15.
 A
researcher is interested in using content analysis to determine how the United
States Supreme Court has changed its interpretation of the 4th
Amendment’s “unreasonable” search and seizure prohibition over time. Which of the following are the units of
analysis?

a.
individual justices

b.
court decisions in 4th Amendment
cases

c.
the dissenting opinions

d.
the concurring opinions



/

16.
Coding in content analysis involves the
logic of conceptualization and:

a.
application

b.
operationalization

c.
validity

d.
generalization



/

17.
 Secondary analysis encompasses which of the
following sources of criminal justice data?

a.
content analysis of agency records

b.
UCR

c. self-reports

d. NCVS 



/







18.
 Which of the following is not an advantage of
using secondary data?

a.
reduction in validity threats

b.
it is cheaper than collecting original
data

c.
it is faster than collecting original
data

d.
the researcher may
benefit from the work of others established in their fields



/



19.
 If you wanted to measure the number of date
and acquaintance rapes that happen in this country and use UCR data as your
source, what is likely to be your most significant problem?

a.
generalizability

b.
validity 

c.
reliability

d.
applicability

/



20.
 The use of secondary analysis of data has
become very popular because:

a.
it is cheaper but never as good as
collecting your own data

b.
it is faster because the data is readily
available

c.
scholarly journals are now publishing
primarily data gathered from secondary analysis

d. because it is always considered valid



/
	

Spreadsheet Help

Question
	

 Shah Ophthalmology Center 12/17/2013

Background 

Lee Shah, a board certified ophthalmologist, has been successful in private practice for 15 years. In 2012 he met Ann Casey, a newly minted ophthalmologist, and agreed to employ her in his practice. (See contract terms below.) As a result Dr. Shah reorganized his practice as a new limited liability corporation, beginning with 2012.

Attachment One (excel Spreadsheet) is the Income/Expense statement for the first year of the newly organized medical practice. Dr. Shah now wants to replace some of the aging medical equipments in the facility and add examining room equipments to accommodate Dr. Casey. These purchases will cost $450,000. He will have to borrow $390,000 to enact this renovation and wants to create a series of pro forma income/expense statements for the next three years to accompany his loan application.

Assumptions and Added Information 

1) Dr. Ann Casey’s four-year contract provides for a starting salary of $140,000 for 2012 and a 10.50% increase for each of the next 3 years, after which a new partnership arrangement may be established depending upon results of the previous 4 years.
2) Dr. Lee Shah draws a salary of $255,000 plus retains the resulting annual profits (net income after taxes).
3) As a result of employing Dr. Casey the practice is expected to grow during the next three years as follows: 
- Office visits 4.50% per year
- General surgery 6.0% per year
4) A local bank has informally offered a $390,000 loan for a six year period at 3.95% annual interest.
5) The practice employs an Office Manager, a Receptionist and a Medical Technician; all can expect a 3.00% salary increase each year for the next three years.
6) The practice employs a contract service to perform all its billings, bookkeeping 
 and accounts payable needs. The contract service charges the practice at the rate 
 of 3.8% of gross income and requires a 0.45% annual increase beginning in 2013.
7) Insurance for the Center is $33,000/year. With added surgical procedures 
beginning in 2014, the annual insurance expense will be $55,000/year.
8) The lease for the office space, $40,000/year, includes a 5.5% increase in rent per year. And all other office expenses (materials & supplies, telephone & communications, marketing, and miscellaneous) are expected to increase 4.50% each year. 
9) The new equipments have a five-year life and are depreciated on a straight-line basis.
10) Taxes on the corporation are 0% for the first $33,000 of profit and 21.00% for the balance of profits.

Assignment 
 1) Using the attached income/expense statement outline and the 2012 operating data 
 as the base period, you are asked to calculate the following for the years 2013 – 
 2015:
 - Total incomes for each year
 - Total expenses for each year 
 - Gross profit for each year 
 - Taxes for each year 
 - Net Income for each year
 (Assume the loan is received and the equipments are purchased at the beginning 
 of 2013.)
 Begin by completing the income/expense statement for the year 2012.

2) Dr. Shah has recently previewed the most recent refractive surgery equipments, which he is certified to use. Beginning in 2014 the Practice will lease these equipments and offer refractive surgery. Revenue from refractive surgery is expected to be $192,000 in 2014 and then increases 22% per year.

The equipments lease for $82,000 per year which includes all maintenance and supplies.

An additional Medical Technician will be needed in 2014 for this effort, with a starting salary of $54,000 (and with a 3.5% annual raise planned), and marketing expenses will increase by 15% beginning in 2014.

Assignment Deliverables 

a) Upload the file to Blackboard.

In order to distinguish between the work of different students, the following guidelines should be adhered to: 

i. Name the .xls or .xlsx (Excel) workbook: Excel_LastName_FirstName

Hints: 
a. Rounding numbers to whole integers will make the spreadsheets easier to read
b. You should use formulas for the projections NOT hard numbers, so Dr. Shah can easily manipulate the spreadsheet in playing “what if” exercises on business expectations





	
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Airvalue Airways is a regional carrier whose strategy is to expand gradually

Question
	Airvalue Airways is a regional carrier whose strategy is to expand gradually as they can identify routes that offer an attractive return on the investment necessary to support successful coverage of the route. As part of this expansion, the company is planning to buy a new plane in the upcoming fiscal year. The purchasing department has narrowed the choice down to two models. One is the A220 which is manufactured in Europe. The other plane is the G435 which is built in the United States. The two aircraft have similar profiles. However, the locally-built G435 is significantly more expensive to purchase.

The A220 has an expected life of 5 years, will cost $90 million and its use will produce net operating cash inflows of $30 million per year. The G435 has a life of 10 years, will cost $128 million, and its use will produce net operating cash inflows of $25 million per year. Airvalue plans to serve the route for 10 years. When they need to purchase a new A220 at the end of five years, the cost will be $115 million net after allowing for salvage value of the used plane. Net operating cash inflows will remain at $30 million throughout the second five years. At the end of 10 years, salvage value of the G435 and of the second A220 are expected to be about the same at approximately $500,000 each.

As the company’s CFO you are to provide the financial analysis that will be considered by the strategic planning executive committee during evaluation of this expansion alternative. Your plan is to use a capital budgeting approach to the analysis in order to best assure that the decision will result in maximization of wealth for the company’s stockholders. You also want to convert the entire committee to the concept that capital budgeting should be used as the main tool for the financial analysis of capital expenditure alternatives.

The company uses the historical difference in returns between the S&P 500 and the Treasury bond rates of 7% as their estimated market risk premium. The current yield to maturity on a 10-year Treasury bond is 6.2%. Airvalue Airways’ common-stock equity beta is estimated as 1.40.

Airvalue’s capital structure is 58% common stock, 32% preferred stock and 10% long-term debt. An 8.8% after tax cost of debt has been determined and the cost of preferred stock is 12%.

Your task is to:

Describe for other members of the strategic planning committee the role that capital budgeting should play in corporate strategic management.
Explain why the NPV and IRR capital budgeting tools are superior to the accounting rate of return and simple payback techniques for determining the attractiveness of capital investment opportunities.
Use the Capital Asset Pricing Model (CAPM) to identify the cost of common stock.
Calculate the weighted average cost of capital (WACC) for the firm’s existing capital structure.
Calculate the net present value (NPV) for each plane model using the company’s WACC as the hurdle rate.
Recommend which plane should be purchased and justify your recommendation.
Discuss the need to manage implementation of the project so that the higher returns can be realized. Include the strategic management keys to protecting the project from competitive forces that would erode the earning power of the project and jeopardize realization of the projected rate of return on the investment.

To complete this assignment, you must submit a 6-8 page paper that addresses the seven elements of the task as listed above and exhibits your calculations of the cost of common stock, the weighted average cost of capital, and the NPV for each plane along with an explanation of the calculations.