Accounting for Non-Financial ManagersWeek 4 homeworkThe site would not let me copy and paste so I have attached the assignment as an attachment.
An aluminum pan has a flat circular bottom with a diameter of 15cm and a thickness of 0.4 cm. The pan is placed over a heater rated1400 W. The inner surface temperature of the bottom of the pan ismeasured to be 105 °C. Determine the temperature of the outersurface of the bottom of the pan. Thermal conductivity of Al is 237W/m.K. . . .
Tom was hired as a budget analyst at a large aviation manufacturing business. His boss has asked that he review last year's master budget, actual results, and planned numbers, and calculate the variances for each category. The data table Tom was given follows below and the assignment is at the end of the data table.
Actual results variance statict budget
Units sold 20,000.00 24,000.00
Revenues 2,500,000.00 2,88,000.00
Total variable cost 1,900,200.00 2,112,000.00
Contribution margin 599,800.00 768,000.00
Fixed cost 570,000.00 552,000.00
Operating income 29,800.00 216,000.00
Create a table that shows the variances for each category and for overall.Then, in a 1-page Word document, summarize why there were variances.Include both the calculation table and summary in the same document.
Problem 1: Hedging with forwards and futures
Today is 13th December 2019. You work in the risk management department of a large publicly
listed manufacturing company. Your company will need to purchase 1000 units of asset S on the 15th
of February 2020. Asset S is a consumption asset that is crucial for production in your company.
You have some historical data on the price movements of asset S and the price movements for a
futures contract (F) written on an asset that is correlated with your asset S. You are responsible for
the technical process of any hedging activity, as well as communicating the pros and cons of
hedging activity to upper management who have minimal finance experience. Please refer to the
data in the sheet titled ‘Problem 1’ in the ef5050_exam.xls file to answer parts of this question that
require calculation.
Question 1.1
a) Describe how you would hedge the purchase price risk of asset S using a forward contract.
b) What challenges could you face with this hedging strategy?
Question 1.2
Imagine a situation in which no forward contract is available and you must use a futures contract to
hedge the price risk. You have available a futures contract (in the series F) that expires on the 15th of
February 2020. The commodity underlying the futures contract F has price movements that are
correlated with asset S. Answer using the data in the sheet for Problem 1 under ‘Historical Data on
Prices of Futures and Asset’. Each futures contract is for 1 unit of asset F.
a) Calculate the number of futures contracts needed to hedge.
b) Please explain the logic of this hedge ratio to management.
c) Would you recommend using this hedge ratio? Give reasons why/why not.
d) Can you think of alternative types of hedge ratio and their potential advantages.
Question 1.3:
Consider the data in the sheet for Problem 1 under ‘Realised Outcomes on Prices of Futures and
Asset’ to be the true outcome of the data. Assume, for now, that there are no margins for trading
futures.
a) What is the outcome of your hedging strategy using the hedge ratio from 1.2 (a)?
b) What hedge ratio would you use in the future given access to this longer dataset?
c) Does the difference, if any, impact your approach to hedging?
Question 1.4:
The initial margin is 8% of the contract value and the maintenance margin is 5% of the contract
value.
a) Describe the evolution of your cash position, for the realised outcomes from ‘Realised
Outcomes on Prices of Futures and Asset’ given the hedge ratio calculated in 1.2 (a).
b) How could you estimate the potential risks associated with margins? Try to come up with a
simple measure of risk.
c) Provide some analysis to management that helps them understand the risk measure you
came up with in part (b).
Attachments:
B. Your task
• You are required to conduct a literature review of a topic area of your choice within this unit.
TOPIC: Income smoothing and Corporate Governance
· Each student is required to review fiveacademic journal papers and prepare a report based on your review.
FIVE Academic Journal Papers:
1. Corporate governance and income smoothing in China
2. The impact of corporate governance mechanisms on EU banks’ income smoothing behavior
3. Corporate governance and performance of financial institutions
4. Income smoothing among European systemic and non-systemic banks
5. Accounting Income Smoothing, Hedging and Corporate Governance
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Attachments:
An annuity immediate has semi-annual payments of 1000 for 25 years at a rate of 6%, convertible quarterly. Find the present value.
Your engineering consulting firm is in the middle of a veryprofitable year. Yet, you have some engineers that have some idletime. You can either give them time off or find some work for them.The variable cost for the engineers is $30/hour and the standardcost is $55/hour. A possible job has become available. Yourengineering estimator tells you that it will take at most 250hours, at least 150 hours and most likely 180 hours. How would youdecide how much to charge? What is the least you would be willingto charge? Use real numbers wherever possible. Justify yoursteps. Attached
Last year, Jarod left a job that pays $60,000 to run
his own bike-repair shop. Jarod’s shop charges
$65 for a repair, and last year the shop performed
3,000 repairs. Jarod’s production costs for the year
included rent, wages, and equipment. Jarod spent
$50,000 on rent and $100,000 on wages for his
employees. Jarod keeps whatever profit the shop
earns, but does not pay himself an official wage.
Jarod borrowed $20,000 for the shop’s equipment at
an annual interest rate of 5 percent
Total revenue = $65 x 5,000 = $325,000 Expenses = $60,000 + $100,000 + $30,000 + ($30,000 x 0.04) = $191,200 Net earnings from shop = $325,000 – $191,200 = $133,800 Difference = $133,800 -…
my question is on the above approved answer: Where is 30000 coming from yet we have 50000 on the question?
A fish tank measuring 80cm by 40cm contains water to a height of 35 cm. Find (i) the volume of water in the tank, giving your answer in litres. (ii) the surface area of the tank that is in contact with the water, giving your answer in m^2.
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ef5050-exam.pdf
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