Chapter 4 MARKET AND DEMAND ANALYSIS 1. We have to estimate the parameters a and b in the linear relationship Yt = a + bT Using the least squares method. According to the least squares method the parameters are: ∑ T Y – n T Y b = ∑ T 2 – n T 2 a = Y – bT The parameters are calculated below: Calculation in the Least Squares Method T Y TY T 2 1 2‚000 2‚000 1 2 2‚200 4‚400 4 3 2‚100 6‚300 9 4 2‚300 9‚200 16 5 2‚500 12‚500 25 6 3‚200 19‚200 36 7 3‚600 25
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EVQUES T3 SuB 2011 Key 1. In a recent period 12‚250 units were made and there was a favorable labor efficiency variance of $22‚500. If 41‚000 labor-hours were worked and the standard wage rate was $12 per labor-hour‚ the standard hours allowed per unit of output is closest to: A. 3.19 B. 3.35 C. 3.50 D. 6.00 [pic] AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Bloom ’s: Analysis Brewer - Chapter 09 #40 Learning Objective: 3 Level: Hard Source: CIMA
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References: CAPM - RISK ( n.d.) Retrieved from http://www.uwf.edu/constad/fin4424web/ Keown‚ A.‚ Martin‚ J.‚ & Petty‚ J. (2011). Foundations of finance (7th ed.). Boston‚ MA: Prentice Hall. Net Present Value( n.d.) Retrieved from http://www.2012books.lard bucket.org/books/managerial- finance/section_13_03.html. ----------------------- [pic] [pic]
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Why are market prices useful to a financial manager? A competitive market is one which a good can be bought and sold at the same price. We can use prices from competitive markets to determine the cash value of a good. Whenever a good trades in a competitive market‚ the price determines the value of the good. Financial Managers must be able to evaluate costs and benefits in order to make the appropriate decisions that benefit the company. Once we use the market prices to evaluate the cost and benefits
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CHAPTER 7 CORPORATIONS: REORGANIZATIONS SOLUTIONS TO PROBLEM MATERIALS Status: Q/P Question/ Learning Present in Prior Problem Objective Topic Edition Edition 1 LO 1 IRS Letter Ruling Unchanged 1 2 LO 1 Reorganizations follow tax law Unchanged 2 3 LO 1 Types of reorganizations Unchanged 3 4 LO 2 Comparing like-kind exchange to corporate New reorganization 5 LO 2 Four-column template Unchanged 5 6 LO 1‚ 2‚ 3 Reorganization: tax attributes Unchanged 6 7
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great challenges in communicating the relevant value for an organisation. However‚ they are becoming increasingly more important in an environment where goodwill and other intangible assets are making up larger components of business purchase/combination prices. In determining the correct value of goodwill in the financial statements‚ there are three bases of measurement in accounting that can be applied; historical cost‚ market value and net present value. Each method has its own costs and benefits
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Fundamentals of corporate finance (European edition) by David Hillier Quartile 4 IBA Chapter 1 - 14 Chapter 1 Introduction to corporate finance 1.1 Corporate finance and the financial manager Corporate finance must be considered with three basic types of question: 1. What long-term investments to make 2. Where will we get the money for those investments from 3. How will we manage everyday financial activities 1. What long-term investment to make: To process of planning and
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CASE 2: VALUING CAPITAL INVESTMENT PROJECTS CORPORATE FINANCE GROUP Y Growth Enterprises‚ Inc When valuing any project‚ the free cash flows must be determined in order to be able to successfully implement any method of capital budgeting. Growth Enterprises is currently considering four projects. Each has an equal required initial investment of $10‚000‚000 which is followed by a set of cash flows different for each project. Depreciation figures for each project were calculated on a straight-line
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shareholder value: according to Alfred Rappaport author of creating share holder value; a guide to managers and investors‚ who is regarded as father of share holder value‚ the following seven factors called “value drivers” affect shareholder value 1. Rate of sales growth 2. Operating profit margin 3. Income tax rate 4. Investment in working capital 5. Fixed capital investment 6. Cost of capital 7. Value growth duration While first six “value drivers” are self explanatory‚ last one value growth duration
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not be the only method used for this project. The figures in the attached benefit and value proposal does indicate that the project will cost roughly $1‚000‚000.00 - $2‚000‚000.00 just to acquire the CRM system and another $1‚000‚000.00 for all implementation‚ up-training ‚ maintenance‚ etc. There are so many other methods that may be used whether it is a payback period or net present value or a net present value and payback period combined‚ the Board is encouraged to investigate or entertain future
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