As a financial analyst for National Engineering, you are required to estimate

Cost of Capital Homework Problems

Q1.1. As a financial analyst for National Engineering, you are required to estimate the cost of   capital the firm should use in evaluating its heavy construction projects. The firm’s   balance sheet data and other information are listed below. Assume a 35% corporate tax  rate.

a. What is your estimate? What assumptions must you make to calculate this estimate?

b. What qualifications to this estimate should you mention in your report when National applies this rate to its various projects?

Selected Balance Sheet Items

Bonds  (see market data)

Preferred stock     $400,000

Common Stock        $800,000

Retained Earnings   $2,000,000

Market Data

Market Value     Yield

 Bonds:

8%, 10-year $250,000         12%

12%, 15-year $1,000,000       15%

21%, 1-year  $250,000         11%

Common stock:

Average dividend growth (5 years) = 10%

Current Dividend Yield = 7%

Price = $47.25

Shares = 100,000

Preferred stock:

$4.50 preferred dividend

Price = $22.50

Shares = 20,000

Q 1.2. Given the following information for Columbia Power Co., find the WACC. Assume the company’s tax rate is 35%.

Debt: 3000 8% coupon bonds outstanding, $1000 par value, ten years to maturity, selling for 101% of par; the bonds make semiannual interest payments

Common Stock: 50,000 shares outstanding selling for $62 per share; the beta is 1.10

Preferred Stock: 10,000 shares of 4% preferred stock outstanding, $100 par value, currently selling for $60 per share

Market: 5% market risk premium and 6% risk-free rate

Q1.3. Independence Mining Corporation has 7 million shares of common stock outstanding, 1million shares of 6% preferred stock outstanding, and 100,000 9% semiannual bonds outstanding, par value $1000 each. The common stock currently sells for $35 per share and has a beta of 1.0, the preferred stock currently sells for $60 per share, and the bonds have 15 years to maturity and sell for 89% of par. The market risk premium is 8%, T-bills are yielding 7%, and Independence Mining’s tax rate is 34%.

a. What is the firm’s market value capital structure?

b. If Independence Mining is evaluating a new investment project that has the same risk as the firm’s typical project, what rate should the firm use to discount the project’s cash flows?

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The marketing director of a small chain of specialty coffee

Question 1:
1) The marketing director of a small chain of specialty coffee/pastry “cafés” collected data on 120 customers at random (offering a free cup of coffee if the customer filled out the questionnaire) in a study to determine whether satisfaction with various attributes of the café (e.g., quality of service) (Y) is related to various demographics of the customer (X). The data considering quality of service (a value ranging from 0-4, by tenths and the  demographic, AGE (in years), are in the Excel file named “sat vs. age”. (e.g., first responder: AGE=21, SAT=3.9)

a) Obtain the Least Squares line.
b) Obtain a point estimate of the mean satisfaction for customers with age = 30.
c) What is the point estimate of the change in satisfaction when age increases by one year?

Question 2:
Refer to the “sat. vs. age” data of “Question 1”.

a) Obtain a 95% confidence interval for the mean satisfaction for customers age 28. Interpret your interval.
b) Mary Jones is 28 years old. Predict her satisfaction and find a 95% confidence interval for this value.
c) Is the interval in part b) wider than that of part a)? Should it be?
d) Run an F-test to test Ho: B = 0 vs. H1: B≠0 with a = .01. What is your conclusion in practical terms?

Question 3:
The data in Excel file named “Advertising Recall” represent the number of ads for a product recalled (Y) over time (X). There were 900 people in the study, divided into 9 sets of 100. Each set of 100 people were polled after a certain number of days, three groups after 1 day, three groups after 3 days, three groups after 5 days, three groups after 7 days, and 3 groups after 9 days. The Y values are the average number of ads for the product recalled (e.g., first data value, Y = .07, X = 9).

a) Fit a OLS line to the data.
b) Perform the F-test to determine whether or not there is a lack of fit to a linear regression function. Use a = .05.
ADVERTISING RECALL

Question 4:
The data in the Excel file, “Brand Awareness” represent the relationship between a “brand awareness measure”* (Y) and age (X) for 8 children. (e.g., value 1: Y = 63, X = 5)

a) Obtain the OLS regression line.
b) Examine the standardized residuals. What is suggested about data point 7?
c) Omit case 7 from the data and then obtain the OLS regression line.
d) Using the regression results from part c), find a 99% confidence interval for the Y observation when X = 12.
e) Does the Y value for case 7 fall inside or outside of this interval? What does this suggest?
*A complex measure using a large multi-item scale

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Grindstone Paving has the following information for one item they sell

Grindstone Paving has the following information for one item they sell. At the beginning of July, they had 50 units with a cost of $25 each. Grindstone uses the perpetual inventory system and uses FIFO for inventory valuation. Grindstone charges 5% sales tax on all sales.
Prepare the following journal entries. Use the table below the transactions to calculate inventory valuation.

Date    Transaction  
Jul 8    Purchased 500 units at $26 each on account, terms 2/10, net 30.
Jul 10    A portion of the inventory from the above purchase was defective. Grindstone returned 100 units to the supplier.
Jul 12    Sold 300 units to SouthShore on account at $60 per unit plus tax, terms 2/10, net 30.
Jul 14    The customer from Jul 12 returned 30 units that were not needed. Process the return, including sales tax.
Jul 18    The customer from Jul 12  paid their amount owing and claimed their discount. Note the discount is not taken on the sales tax amount.
Jul 22    Purchased 350 units on account at $27 per unit with terms of 3/10, net 30.
Jul 23    Sold 200 units for $60 each plus tax. Received cash.
Jul 25    Took advantage of discount offered and paid up amount owing from the Jul 22 purchase.
Jul 31    Remitted the sales tax owing to the government.
Jul 31    Grindstone provides warranties on the products they sell. They estimate the warranty to be $2 for each item sold (less any returns).

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Charles Austin of the controller’s office of Headland Corporation

Charles Austin of the controller’s office of Headland Corporation was given the assignment of determining the basic and diluted earnings per share values for the year ending December 31, 2018. Austin has compiled the information listed below.

1. The company is authorized to issue 8,000,000 shares of $10 par value common stock. As of December 31, 2017, 2,000,000 shares had been issued and were outstanding.

2. The per share market prices of the common stock on selected dates were as follows.

Price per Share

July 1, 2017 $20.00

January 1, 2018 $21.00

April 1, 2018 $25.00

July 1, 2018 $11.00

August 1, 2018 $10.50

November 1, 2018 $9.00

December 31, 2018 $10.00

3. A total of 662,400 shares of an authorized 1,320,000 shares of convertible preferred stock had been issued on July 1, 2017. The stock was issued at its par value of $25.00, and it has a cumulative dividend of $3 per share. The stock is convertible into common stock at the rate of one share of convertible preferred for one share of common. The rate of conversion is to be automatically adjusted for stock splits and stock dividends. Dividends are paid quarterly on September 30, December 31, March 31, and June 30.

4. Headland Corporation is subject to a 40% income tax rate.5.The after-tax net income for the year ended December 31, 2018, was $11,580,000.

The following specific activities took place during 2018.

1. January 1—A 5% common stock dividend was issued. The dividend had been declared on December 1, 2017, to all stockholders of record on December 29, 2017.

2. April 1—A total of 433,200 shares of the $3 convertible preferred stock was converted into common stock. The company issued new common stock and retired the preferred stock. This was the only conversion of the preferred stock during 2018.

3. July 1—A 2-for-1 split of the common stock became effective on this date. The board of directors had authorized the split on June 1.

4. August 1—A total of 290,400 shares of common stock were issued to acquire a factory building.

5. November 1—A total of 22,800 shares of common stock were purchased on the open market at $9.00 per share. These shares were to be held as treasury stock and were still in the treasury as of December 31, 2018.

6. Common stock cash dividends—Cash dividends to common stockholders were declared and paid as follows.

April 15—$0.30 per share

October 15—$0.20 per share

7. Preferred stock cash dividends—Cash dividends to preferred stockholders were declared and paid as scheduled.

(a) Determine the number of shares used to compute basic earnings per share for the year ended December 31, 2018. (Round answer to 0 decimal places, e.g. $1,500.)

Number of shares to compute basic earnings per share

(b) Determine the number of shares used to compute diluted earnings per share for the year ended December 31, 2018. (Round answer to 0 decimal places, e.g. $1,500.)

Number of shares to compute diluted earnings per share

(c) Compute the adjusted net income to be used as the numerator in the basic earnings per share calculation for the year ended December 31, 2018.

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IHP 430 Module Three Group Discussion

IHP 430 Module Three Group Discussion Guidelines and Rubric

Multi-voting Process Tool

1. Review the following scenario. Choose a multi-voting process tool you will use to complete the analysis of the scenario. Then, work through the scenario to determine which project you will select.

2. Next, discuss the process and the tool you used to complete the multi-voting process analysis with your group on the discussion board. 3. Finally, discuss the four criteria that should be considered when problem-solving: risk, economy, timing, and resources.

Using a multi-voting process tool, address the following problem:

Ten projects are being considered by the QM team. Based on team member preferences (below), if a single vote is held, Project D will be selected. The chair wants to consider team member preferences beyond simply their first choices. Use a multi-voting process and assign three points to each member’s first choice, two points to the second, and one point to the third. After the first vote, options that receive fewer than three points should be eliminated and the remaining options re-voted. In subsequent rounds, two points will be given to the first choice and one point to the second. Continue to eliminate low vote-tallying options
until all but two options have been eliminated. On the final vote, each team member will get a single vote worth one point. Which option will be selected?

Jacob D, I, B, C, A, F, E, J, H, G
Isabella A, C, E, F, G, J, D, H, I, B
Ethan H, G, E, D, B, I, J, A, C, F
Emma D, I, F, A, E, G, B, C, H, J
Olivia B, G, A, J, H, C, F, E, I, D

Multi-voting Process Tool Peer Feedback: As healthcare managers, there are two important skills to master: working in groups or teams, and giving and receiving constructive feedback. For this project, each team is composed of three to five team members. Individually, complete your multi-voting process analysis to select the best approach in identifying problems and post it to your group’s discussion board to share with your team members during Module Three. During Module Three, you will go to the group discussion to review your team members’ multi-voting analysis responses. When reviewing your peers work, offer constructive feedback (to at least two peers).

You are expected to provide feedback on the content of the multi-voting analysis and compare and contrast each peer approach with your own. The communication tone of the critique must be professional and respectful, and contain a rationale that supports your critique. Make content recommendations that are focused and relevant to the multi-voting process analysis, and use proper mechanics of writing. This must be completed before the end of Module Three. Your final product will be graded individually.

Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions

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Career communications are the same as any professional business

Resume and Cover Letter Package

Career communications are the same as any professional business communication. Like memos and emails, when you write a cover letter to accompany your resume, you need to spend time planning how you’re going to write this unique communication.

Your task:

1. Find a help wanted ad/job posting you’re interested in. This could be from any source, i.e., it could come from a career search site or directly from a company’s website.

Copy that posting into a Word document.

2. Write a cover letter in response to that job posting. This would be considered a solicited cover letter. Refer to page 519 for how to flow your text (intro paragraph, body text, last paragraph. You will lose points if you do not follow this organizational structure.

3. Upload the job posting and your cover letter to Canvas by the deadline noted.

Assignment tips:

- Upload each individual item as a separate Word document. (1. Job posting, 2. Cover letter).

- Format your cover letter in the proper business letter format Use the letter format on page 519. You must include:
o Your address
o The hiring company’s address
o As a salutation appropriate to your particular job posting
o Left justified text
o Spaces between paragraphs
o A closing line with spaces for your signature, and your name.

- Proofread, proofread, and proofread.

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The cash account of Cullumber Co. showed a ledger balance of $22,679.53

The cash account of Cullumber Co. showed a ledger balance of $22,679.53 on June 30, 2017. The bank statement as of that date showed a balance of $24,070.00. Upon comparing the statement with the cash records, the following facts were determined.

1. There were bank service charges for June of $145.00.
2. A bank memo stated that Bao Dai’s note for $6,960.00 and interest of $208.80 had been collected on June 29, and the bank had made a charge of $31.90 on the collection. (No entry had been made on Aguilar’s books when Bao Dai’s note was sent to the bank for collection.)
3. Receipts for June 30 for $19,662.00 were not deposited until July 2.
4. Checks outstanding on June 30 totaled $12,398.09.
5. The bank had charged the Cullumber Co.’s account for a customer’s uncollectible check amounting to $1,468.56 on June 29.
6. A customer’s check for $522.00 (as payment on the customer’s Accounts Receivable) had been entered as $348.00 in the cash receipts journal by Cullumber on June 15.
7. Check no. 742 in the amount of $491.00 had been entered in the cash journal as $419.00, and check no. 747 in the amount of $337.56 had been entered as $3,375.60. Both checks had been issued to pay for purchases and were payments on Cullumber’s Accounts Payable.

A) Prepare a bank reconciliation dated June 30, 2017, proceeding to a correct cash balance.
B) Prepare any entries necessary to make the books correct and complete. (If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

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Sunland Corp. factors $392,000 of accounts receivable with Coronado

Sunland Corp. factors $392,000 of accounts receivable with Coronado Finance Corporation on a without recourse basis on July 1, 2017. The receivables records are transferred to Coronado Finance, which will receive the collections. Coronado Finance assesses a finance charge of 1.90% of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable to cover sales discounts, returns, and allowances. The transaction s to be recorded as a sale.

Prepare the Journal entry on July 1, 2017, for Sunland Corp. to record the sale of receivables without recourse.
Prepare the Journal  entry on July 1, 2017, for Coronado Finance Corporation to record the purchase of receivables without recourse.

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At the end of 2017, Ivanhoe Company has accounts receivable of $877,500

At the end of 2017, Ivanhoe Company has accounts receivable of $877,500 and an allowance for doubtful accounts of $47,800. On January 16, 2018, Ivanhoe Company determined that its receivable from Ramirez Company of $7,470 will not be collected, and management authorized its write-off.

Prepare the journal entry for Ivanhoe Company to write-off the Ramirez receivable.
What is the net realizable value of Ivanhoe Company’s Accounts receivable before the write-off  of the Ramirez receivable?
What is the net realizable value of Ivanhoe Company ‘s Accounts receivable after the write-off of the Ramirez receivable?

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Monty Company reports the following financial information before adjustments

Monty Company reports the following financial information before adjustments.

Dr.        Cr.
Accounts Receivable        $147,300
Allowance for Doubtful Accounts                    $3,380
Sales Revenue (all on credit)                    809,000
Sales Returns and Allowances        50,910

Prepare the journal entry to record bad debt expense assuming Monty Company estimates bad debts at (a) 5% of net sales and (b) 5% of accounts receivable but Allowance for Doubtful Accounts had a $1,380 debt balance.

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