Nonconstant Growth. Metallica Bearings, Inc., is a young stat-up company. No dividends will be paid…

Nonconstant Growth. Metallica Bearings, Inc., is a young stat-up company. No dividends will be paid on the stock over the next six years, because the firm needs to plow back its earnings to fuel growth. The company will then pay a $9 per share dividend in year 7 and will increase the dividend by 5 percent per year thereafter. If the required return on this stock is 13 percent, what is the current share price?

 

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In December 2003, a European insurance company, Swiss Re, issued a 3-year floating-rate bond…

In December 2003, a European insurance company, Swiss Re, issued a 3-year floating-rate bond maturing on January 1, 2007, with a par value of US$400 million. The interest-rate payments were quarterly with a coupon reset formula of 3-month U.S. LIBOR plus 135 basis points. The principal at maturity was linked to a specifically constructed index of mortality rates (i.e., mortality index) across five countries(United States, United Kingdom, France, Italy, and Switzerland). The principal schedule at maturity called for repayment in full if the mortality index does not exceed 1.3 times the 2002 base level during any of the three years of the life of the bond. However, if the mortality index exceeded that level, there would be an increase of5% for every change in the index by 0.01. (a) What was the purpose of Swiss Re issuingthis bond? (b) The Swiss Re bond is referred to as a catastrophebond. Why?

 

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Unknown to Global, Pine carried a concealed pistol. While Pine was making a delivery, he suspected…

Pine, an employee of Global Messenger Co., was hired to deliver highly secret corporate documents for Global’s clients throughout the world. Unknown to Global, Pine carried a concealed pistol. While Pine was making a delivery, he suspected an attempt was being made to steal the package, drew his gun and shot Kent, an innocent passerby. Kent will not recover damages from Global if Global discovered that Pine carried a weapon and did nothing about it. Global instructed its messengers not to carry weapons. Pine was correct and an attempt was being made to steal the package. Pine’s weapon was unlicensed and illegal.

 

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alumni Giving Alumni donations are an important source of revenue for colleges and universities…. 1 answer below »

alumni Giving Alumni donations are an important source of revenue for colleges and universities. If administrators could determine the factors that could lead to increases in the percentage of alumni who make a donation, they might be able to implement policies that could lead to increased revenues. Research shows that students who are more satisfied with their contact with teachers are more likely to graduate. As a result, one might suspect that smaller class sizes and lower student/faculty ratios might lead to a higher percentage of satisfied graduates, which in turn might lead to increases in the percentage of alumni who make a donation. The following table shows data for 48 national universities. The Graduation Rate column is the percentage of students who initially enrolled at the university and graduated. The % of Classes Under 20 column shows the percentages of classes offered with fewer than 20 students. The Student/Faculty Ratio column is the number of students enrolled divided by the total number of faculty. Finally, the Alumni Giving Rate column is the percentage of alumni who made a donation to the university.

Managerial Report

1. Use methods of descriptive statistics to summarize the data.

2. Develop an estimated simple linear regression model that can be used to predict the alumni giving rate, given the graduation rate. Discuss your findings.

3. Develop an estimated multiple linear regression model that could be used to predict the alumni giving rate using the Graduation Rate, % of Classes Under 20, and Student/ Faculty Ratio as independent variables. Discuss your findings.

4. Based on the results in parts 2 and 3, do you believe another regression model may be more appropriate? Estimate this model, and discuss your results.

5. What conclusions and recommendations can you derive from your analysis? What universities are achieving a substantially higher alumni giving rate than would be expected, given their Graduation Rate, % of Classes Under 20, and Student/Faculty Ratio? What universities are achieving a substantially lower alumni giving rate than would be expected, given their Graduation Rate, % of Classes Under 20, and Student/ Faculty Ratio? What other independent variables could be included in the model?

 

 

 

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Identify one type of business that would likely use real-time data processing rather than batch…

Identify one type of business that would likely use real-time data processing rather than batch processing. Describe the advantages of real-time processing to this type of business. View Solution:
Identify one type of business that would likely use real time

 

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A project Nirrti is considering requires an initial cash outlay of $722,000 for equipment. She expec

A project Nirrti is considering requires an initial cash outlay of $722,000 for equipment. She expects to spend an additional $67,000 in the first year to cover costs as the project will produce negligible cash inflows for that year. During years 2 through 6, she expects to receive cash inflows of $331,000 a year. What is the net present value of this project at a discount rate of 17.1 percent?

 

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Prove the integral identity

Prove the integral identity

 

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The economic order quantity (EOQ) model is a classical model used for controlling inventory and… 1 answer below »

The economic order quantity (EOQ) model is a classical model used for controlling inventory and satisfying demand. Costs included in the model are holding cost per unit, ordering cost, and the cost of goods ordered. The assumptions for that model are that only a single item is considered, that the entire quantity ordered arrives at one time, that the demand for the item is constant over time, and that no shortages are allowed. Suppose we relax the first assumption and allow for multiple items that are independent except for a budget restriction. The following model describes this situation:

Let Dj = annual demand for item j

Cj = unit cost of item j

Sj = cost per order placed for item j

i = inventory carrying charge as a percentage of the cost per unit

B = the maximum amount of investment in goods

N = number of items

The decision variables are Qj , the amount of item j to order. The model is:

 

In the objective function, the first term is the annual cost of goods, the second is the annual ordering cost (Dj /Qj is the number of orders), and the last term is the annual inventory holding cost (Qj /y2 is the average amount of inventory).

a. Set up a spreadsheet model and for the following data:

b. Solve the problem using Excel Solver.

 

 

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Plains States Manufacturing has just signed a contract to sell agricultural equipment to Boschin, If…

Instruction 9.1:

Use the information for following problem(s).

Plains States Manufacturing has just signed a contract to sell agricultural equipment to Boschin, a German firm, for euro 1,250,000. The sale was made in June with payment due six months later in December. Because this is a sizable contract for the firm and because the contract is in euros rather than dollars, Plains States is considering several hedging alternatives to reduce the exchange rate risk arising from the sale. To help the firm make a hedging decision you have gathered the following information.

· The spot exchange rate is $1.40/euro

· The six month forward rate is $1.38/euro

· Plains States' cost of capital is 11%

· The Euro zone 6-month borrowing rate is 9% (or 4.5% for 6 months)

· The Euro zone 6-month lending rate is 7% (or 3.5% for 6 months)

· The U.S. 6-month borrowing rate is 8% (or 4% for 6 months)

· The U.S. 6-month lending rate is 6% (or 3% for 6 months)

· December put options for euro 625,000; strike price $1.42, premium price is 1.5%

· Plains States' forecast for 6-month spot rates is $1.43/euro

· The budget rate, or the lowest acceptable sales price for this project, is $1,075,000 or $1.35/euro

30)

Refer to Instruction 9.1. Plains States could hedge the Euro receivables in the money market. Using the information provided, how much would the money market hedge return in six months assuming Plains States reinvests the proceeds at the U.S. investment rate?

A)

$1,250,000

B)

$1,724,880

C)

$1,674,641

D)

$1,207,371

31)

Refer to Instruction 9.1. Money market hedges almost always return more than forward hedges because of the greater risk involved.

32)

Refer to Instruction 9.1. If Plains States chooses to implement a money market hedge for the Euro receivables, how much money will the firm borrow today?

A)

euro 1,201,923

B)

$1,201,923

C)

euro 1,196,172

D)

$1,196,172

33)

Refer to Instruction 9.1. A ________ hedge allows Plains States to enjoy the benefits of a favorable change in exchange rates for their euro receivables contract while protecting the firm from unfavorable exchange rate changes.

A)

forward

B)

call option

C)

put option

D)

money market

34)

Refer to Instruction 9.1. What is the cost of a put option hedge for Plains States' euro receivable contract? (Note: Calculate the cost in future value dollars and assume the firm's cost of capital as the appropriate interest rate for calculating future values.)

A)

$27,694

B)

$26,250

C)

euro 27,694

D)

euro 26,250

35)

Refer to Instruction 9.1. The cost of a call option to Plains States would be ________.

A)

$17,653

B)

$16,733

C)

$18,471

D)

There is not enough information to answer this question.

36)

Refer to Instruction 9.1. If Plains States purchases the put option, and the option expires in six months on the same day that Plains States receives the euro 1,250,000, the firm will exercise the put at that time if the spot rate is $1.43/euro.

 

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BUACC 2614 – Management Accounting 2 Semester 2, 2014 Group Assignment According to Martin and…

BUACC 2614 – Management Accounting 2
Semester 2, 2014
Group Assignment
According to Martin and Steele (2010, p.13), “The two principal professional associations in Australia – CPA Australia (the CPA) and the Institute of Chartered Accountants in Australia (the Institute) have indicated their awareness of the significance of issues of sustainability reporting and development of appropriate skill sets in word and in deed. The commitment of both organisations to sustainability principles has been shown by their adoption of, and support for, sustainability-focused reporting approaches and by their opting to take up membership of the Accounting for Sustainability Forumâ€.
According to Sikka (2008, p.291), “The burgeoning corporate social responsibility literature rarely focuses on the anti-social practices of accounting firms…Accountancy firms are on a collision course with civil societyâ€.
Consider the above excerpts.
In a two-part essay:
a. Discuss the stance and initiatives of the Australian accounting profession on corporate social responsibility (CSR) and sustainability. Include your views on the role of accounting and the professional accountants on CSR and sustainability.
b. Discuss the way in which BHP Billiton has demonstrated its social and environmental accountability.
BHP has been publishing Sustainability Reports or alternatively Annual Health, Safety, Environment and Community Reports for over a decade. For BHP’s Sustainability Report for 2013, please go to:
http://www.bhpbilliton.com/home/aboutus/sustainability/reports/Documents/2013/BHPBillitonSustainabilityReport2013_Interactive.pdf
For BHP-related issues in the media, please go to:
http://www.smh.com.au/environment/bhp-mines-set-to-damage-lifegiving-swamps-20100217-odzf.html
http://www.abc.net.au/news/2013-01-07/an-radio-doco3a-ok-tedi/4455092
You may also refer to other media reports on BHP’s environmental impact.
Two good starting points for your research are: the textbook (Chapter 17); the IFAC’s International Guidance Document on Environmental Management Accounting and the websites of the CPA and ICAA. For example, go to: http://www.cpaaustralia.com.au/professional-resources/practice-management/toolkit/environmental-accounting
References:
Martin, A. and Steele, F. (2010) Sustainability in Key Professions: Accounting. A report prepared by the Australian Research Institute in Education for Sustainability for the Australian Government Department of the Environment, Water, Heritage and the Arts.
Sikka, P. (2008). “Enterprise culture and accountancy firms: new masters of the universeâ€, Accounting, Auditing & Accountability Journal, Vol.21 (2), pp.268-95.
————————————————————————————-
Please note the following:
• Format: Essay
• Contribution to overall assessment: 25%
• Length: 2000 – 2500 words
• Due date:02nd October 2014
Your work must comply with the University’s General Guide for the Presentation of Academic Work.
Useful links:
http://federation.edu.au/__data/assets/pdf_file/0015/164121/FedUni-General-Guide-to-Referencing-2014.pdf
http://federation.edu.au/__data/assets/pdf_file/0018/190044/2014-General-Guide-to-Writing-and-Study-Skills.pdf
• This is a group-assignment. Each group needs to have 2 to 3 members in it. Please organise yourselves into groups.
• Please make sure that names and ID numbers of all group members are stated on the cover sheet of your submission.
As this is a group assignment, each member of your group is awarded the same mark. As we know, working in groups has its pros and cons. I am sure that you will hold constructive and energetic group discussions on the issues at hand. In case of any disagreements, you will be able to resolve them in a democratic and rational way. There will be times when you may have to agree to disagree with each other. Invariably different group members bring different skills to a project; it is up to you to make the best of it. I believe one can learn a lot by discussing the issues with one’s colleagues.
If you happen to find your group members are “not pulling their weight†or there are problems with any member’s commitment, then please try to resolve those issues amongst yourselves. Open and honest communication always helps. If you are unable to resolve these issues, you are most welcome to see me and we will try to sort out the problems together. Do this as soon as possible and certainly before the due date.
• BUACC2614, Management Accounting 2
• Semester 2, 2014
• Group Assignment
Bases of assessment HD P F
Content – Identification of relevant issues.
Research – Selection of relevant material.
A demonstration of critical evaluation of the material.
Expression of your viewpoint (and not a catalogue of quotes/ others’ ideas).

Expression – clarity, style (formal and academic), coherence in writing, grammar, punctuation, spellings and sentence structure.
A logical flow of argument at both the paragraph level and the overall text level.
Use of supporting arguments.
Use of literature to support the argument.

Structure – Synopsis (stated the topic, reflected main arguments and identified conclusions reached).
Introduction (clearly stated the essay question; outlined the plan for answering the question).
Discussion in appropriately linked sections and paragraphs.
Conclusion (no new material; reiterated the main line of argument).
Referencing procedure (within the text, and at the end of the text).
Appropriately styled and punctuated bibliography.

Overall Presentation – including cover page, line spacing, page numbering.
GRADE:

 

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