In your own words explain how taking on more debt could reduce Organic Produce Corporation’s cost of capital, potentially leading to the optimal capital structure, but also leading to increased risk to the business.
QUESTION 1
A company needs to truck a load of goods to another warehouse. With standard shipping, it takes two days to deliver the goods. If the company opts for express delivery by hiring an extra driver for $175, then the load can be driven around the clock so the delivery time is reduced to one day. The shipment is valued at $1M, the company's annual holding cost is 25%, and it is open for business every day of the year. Determine the cost difference between the two options. Express your answer rounded to the nearest dollar without the $ or commas.
Answer:
QUESTION 2
A factory needs to produce 80 units per day. It is open for business 8 hours per day. Determine the required Takt time in minutes rounded to the nearest minute.
Answer:
4 points
QUESTION 3
Prior to a set of on-site vendor evaluations, your purchasing team determined what it wanted to see in an appropriate vendor and assigned weights to each factor as follows:
|
|
Decision Factor |
Weight |
|
1 |
Quality |
25% |
|
2 |
Location |
15% |
|
3 |
Price |
20% |
|
4 |
Staff Support |
5% |
|
5 |
Financing Terms |
35% |
After the evaluation visits, the team ranked the 4 vendor candidates as follows:
|
|
Quality |
Location |
Staff Support |
Price |
Financing Terms |
|
Pogo Company |
5 |
3 |
3 |
1 |
5 |
|
GoGo Incorporated |
3 |
1 |
5 |
3 |
5 |
|
Logo Corporation |
3 |
5 |
3 |
5 |
3 |
|
Dodo Limited |
5 |
3 |
1 |
5 |
3 |
Determine the numeric score for GoGo Incorporated to the nearest tenth (0.1 accuracy) and enter it in the box below.
Answer:
5 points
QUESTION 4
The IT department at a local business determined that the computer server was not capable of handling the additional e-commerce traffic with the introduction of 2 new product lines. A eager junior IT staff (new graduate of a JC) suggested that the company acquire the top BL server product from IBM based on the following numbers:
Initial installed cost: $35,000
Annual operating cost: $2,500 per year
Salvage value: $3,000
Asset life (life of computer): 5 years
Firm's weighted average cost of capital (WACC): 10%
The expected net cash inflow from this asset investment is expected to be $10,500 per year during the asset's useful life of 5 years. Using the convention of “Cash In” as positive cash flow and “Cash Out” as negative cash flow, determine the net present value of this proposed asset investment to the nearest dollar. The CIO (Chief Information Officer) is very sensitive to the company's P&L (profit and loss) position.
Hint: Present Values of Future Cash Flows
Answer:
5 points
QUESTION 5
Based on the result above, select the appropriate (best) statement you should make to the CIO.
multiple choice:
|
|
A. |
A. “The annual $10,000 cash inflows from this investment far exceeds the annual cash outflows. Additionally, the total cash inflows also exceed the initial cash out (investment). I concur with my colleague and recommend that we invest in this asset!” |
|
|
B. |
B. “Mr. CIO… with all due respect towards my JUNIOR colleague, the numbers disagree with his recommendation. Given the cash flows, the investment has a poor NPV and thus should not be considered unless we can negotiate a better initial cost for this asset or improve upon the project's cash inflows.” |
|
|
C. |
C. “The cash inflows from revenues are higher than the cash out for operating expenses. The NPV looks great. I concur with my colleague -invest in this asset!” |
|
|
D. |
D. “I don't know, Sir. I feel incompetent, having barely passed Finance and Ops. I must defer my recommendation until tomorrow, so I may confer with a colleague.” |
Gaining a durable competitive edge over rivals hinges mainly on:
a. The ability of a company to earn bigger profits per unit sold than rivals.
b. Management’s ability to come up with a product/service that has innovative or unique features.
c. Having than rivals.
d. Building competitively valuable expertise and capabilities that rivals cannot match.
e. Having a lower price than rivals and thereby winning and market share away from rivals.
…….
KS 1.2 Incorporate the use of technology appropriate to the discipline and content.
HO Higher Order Thinking
HO 2.2 Exercise independent judgement and initiative in adapting and applying knowledge and
skills for effective planning, problem solving and decision making in diverse contexts.
Assessment Purpose
This assignment is an individual assessment assessing your learning from the MYOB tutorials
and Pabst & Perrin text by completing the February transactions and end of month processing.
Accuracy of accounting information is important and the marking will be based on correct
entries. This assessment will assist you to develop problem solving and judgement skills.
Part A involves preparing February MYOB accounts and is worth 17%.
Part B involves a business report worth 8%.
Find the five number summary for the following data set: 5,4,3,2,6,7,8,11,5
Case Study AJ McDonalds & Co Pty Ltd is an Accounting company recently established with its office located at 44 George Street, Sydney, 2000. Its board is composed of 7 directors responsible for overall supervision and management of the company. Products & Services The Company is planning to offer following services to its clients which would include corporate clients, trusts, partnerships and individuals: • Financial & investment Planning • Audit & assurance • Internal audit outsourcing • Tax Planning • Seeking Private Rulings on specific tax issues • Tax returns Vision Statement of AJ McDonalds & Co Pty Ltd “To be one of the best professional accounting and management consultancy company in Pacific region” Mission Statement of AJ McDonalds & Co Pty Ltd “Our mission is to provide a largest range of accounting, taxation, risk management and management consultancy to SME and large businesses and financial institutions in Pacific region, to also contribute towards increase in their shareholders’ value. You have been appointed as Risk Management Officer of the company. The CEO has tasked you to develop a risk management strategy for the company and its implementation plan. Meeting with CEO You held a meeting with the CEO on the Risk Management strategy. You explained that it was not possible to have a totally risk-free environment. Many decisions involve managing risks according to the Company’s assessment of what constitutes an acceptable level of risk and its judgments about the costs and benefits of particular courses of action. CEO advised to prepare a risk matrix to assess the level of acceptable risk. You also explained following objectives of Risk Management function in the company and sought his support to ensure that the objectives are achieved through a series of actions including strategy and implementation:
Attachments:
What are the potential risks to a company of unethical behaviors by employees? What are potential risks to the public and to stakeholder? Corporate ethics codes are often faulted for being “window dressing”—that is, for having little or no effect on actual behavior. Financial ethics expert John Dobson says day-to-day behavior in the workplace “acculturates” employees—teaches them that the behavior they see is rational and acceptable in that environment Dobson takes issue with the notion of “neoclassical economic theory which states that people are material opportunists who will readily jettison honesty and integrity in favor of guile and deceit whenever the latter are more likely to maximize some payoff function.”
Question description: Why do you believe that criticism is often so difficult for individuals to hear?
Which listening skills from Chapter 3 can you integrate to improve your ability to respond more constructively to criticism? Explain why you selected these skills.
What strategies do you use when you give criticism to others? Why do you use these strategies?
Do your strategies allow the other to save face? Explain.
Which command is used to determine if an IP access list is enabled on a particular interface?
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