Week 1
discussion
Population parameters or population characteristics can be
estimated by taking representative samples of a population. In other words,
conclusions about an entire population can be inferred from a sampling of that
population. This sampling of the population can then be examined and inferences
made about the general population it represents. Various measures provide
different types of data or measures of data from which conclusions can be
derived. Examples of these types of measures are Measures of Central Tendency
and Measures of Dispersion.
Address all of the following questions in a brief but
thorough manner.
What are the most common measures of central tendency?
Include brief definitions for the common measures of central tendency as part
of your initial posting.
How do these measures differ? How are they the same?
What information is provided by each of these measures and
what do they tell us? How could you use measures of central tendency in
decision making as a leader and/or manager?
What are the various measures of dispersion?
What are the uses of these measures and what are their
limitations?
What does each of these measures tell a researcher? A leader
or manager?
The final paragraph (three or four sentences) of your
initial post should summarize the one or two key points that you are making in
your initial response.
Your posting should be the equivalent of 1 to 3
single-spaced pages (500–1500 words) in length.
Week 2
discussion
Investments are based on the belief that the rate of return
justifies or compensates the investor for the risk associated with that
particular investment. The risk associated with this investment is associated
with the chance that a loss will be incurred. Or, to put it another way, the
greater the chance of a loss the more risky the investment. Therefore, some
statistical measures of the risk involved with an investment are necessary
before the investment is made.
Address all of the following questions in a brief but
thorough manner.
What is the Expected Rate of Return on an investment and
what does it tell us about the probability of the risk involved with a
particular investment?
How could the required rate of return of an investment be
estimated?
In terms of risk, what are the advantages (and/or disadvantages)
of a well-diversified portfolio?
The final paragraph (three or four sentences) of your
initial post should summarize at least the one or two key points that you are
making in your initial response.
Your posting should be the equivalent of 1 to 2 single-spaced
pages (500–1000 words) in length.
Week 3
discussion
Investors use the financial statements in many ways. One of
the most important uses of these statements is to evaluate past performance and
project future performance.
Address all of the following questions in a brief but
thorough manner.
What are the major financial statements and what types of
information does each provide the user?
What is a pro forma financial statement and what types of
information does it provide the user?
Who and what are the potential users and uses of these types
of pro forma financial statements?
The final paragraph (three or four sentences) of your
initial post should summarize the one or two key points that you are making in
your initial response.
Your posting should be the equivalent of 1 to 2
single-spaced pages (500–1000 words) in length.
Week 4
discussion
A firm’s capital structure is determined by more than just a
component cost for each source of capital and is not fixed over time. Rather,
the capital structure of a firm is determined by conditions in the domestic and
international economies and it should also reflect changing conditions in the
economy. In other words, the relationship between risk and return should be the
major consideration in establishing the capital structure of the firm and the
value of the firm.
Address all of the following questions in a brief but
thorough manner.
What is the basic relationship between risk and return and
how is this reflected in the value of the firm’s stock? The cost of debt?
What are the primary factors that should be considered when
establishing a firm’s capital structure?
What are the primary differences and/or similarities between
financial risk and business risk?
The final paragraph (three or four sentences) of your
initial post should summarize the one or two key points that you are making in
your initial response.
Your posting should be the equivalent of 1 to 2
single-spaced pages (500–1000 words) in length.
Week 5
discussion
Capital budgeting is the process by which long-term fixed
assets are evaluated and possibly selected or rejected for investment purposes.
The purpose of capital budgeting is to evaluate potential projects for possible
investment by the firm.
Address all of the following questions in a brief but
thorough manner.
What are the various methods for evaluating possible capital
projects, in terms of their possible benefits to the firm? Describe the
benefits and/or shortcomings of each.
What is the NPV profile and what are its uses?
The final paragraph (three or four sentences) of your
initial post should summarize the one or two key points that you are making in
your initial response.
Your posting should be the equivalent of 1 to 2
single-spaced pages (500–1000 words) in length.
Week 1
Project
Instructions
The Allied Group has acquired Kramer Industries and is now
considering additional investments. They have determined that there is a firm
that is a good fit for their portfolio, the Kramer firm of Montana. The firm
was established in 1990 and has the following historical returns:
|
Kramer Industries |
|
|
Year |
Earnings |
|
1990 |
(8% Loss) |
|
1995 |
23% |
|
2000 |
26% |
|
2005 |
31% |
|
2010 |
18% |
Address all of the following questions:
What was the average return for the stock over the period of
1990 through 2010?
What was the standard deviation for the stock over this
period?
Assume that you currently have a portfolio that returns
19.5%. If you add this stock to the current portfolio, what would happen to the
average return on the portfolio?
Should Allied invest in the stock? Justify your response.
Submission Details:
Submit your 3 to 4 page paper in a Microsoft Word document,
using APA style.
Name your document MBA5009_W1_LastName_FirstName.doc.
Submit your assignment to the Submissions Area by the due
date assigned.
Week 2
Project
Instructions
Wal-Mart is one of the most dynamic companies in our
economy. However, the company is being challenged in the market by new
competitors. For the Wal-Mart Corporation, go online and find the annual report
for the most recent year available.
Deliverables:
Based on the obtained annual report, complete the following
table:
|
Ratio |
Formula |
Results |
|
Operating |
||
|
Gross |
||
|
Average |
||
|
Total |
||
|
Fixed |
||
|
Inventory |
||
|
Debt |
||
|
Times |
Based the information in your table and in the annual
report, evaluate the status of Wal-Mart on each of these ratios.
What would you conclude based on the information above in
terms of the overall condition of Wal-Mart?
What recommendations would you make?
Submission Details:
Submit your assignment in a Microsoft Excel spreadsheet.
Cite any references in APA style. Show all your calculations
Name your document MBA5009_W1_LastName_FirstInitial
By the due date assigned, submit the completed assignment to
the Submissions Area.
Week 3
Project
Instructions
Bob and Carol are planning for the birth of their first
child exactly four years from today. They are now ready to start their savings
plan for the big event. The current hospital cost for having a healthy baby at
the local hospital is $6500 after all insurance payments. Pre-natal care for
the immediate 12-month period prior to having the baby amounts to $2000
out-of-pocket costs. Carol’s best friend is planning a baby shower, so only a
crib, a baby carrier, and other miscellaneous items will be needed, which all
cost $1,200 today. However, these items will be purchased and paid for the day
of the child’s birth, and the items are expected to increase in costs by 10%
each year over the next four years due to inflation.
Bob and Carol now have $500 in cash that they plan to put in
the bank in order to cover the all the new costs. Also, Uncle Ted has promised
to contribute $1000 at the end of year two, as a present to Bob and Carol for
baby expenses.
Currently, Bob and Carol can earn 6% compounded annually on
this money. In order to be able to pay cash for all these expenses on the day
the baby is born, how much will Bob and Carol have to save, assuming the baby
is born exactly four years from today
Questions:
Draw the timeline that illustrates the timing of all the
events of the situation described above.
How much will Bob and Carol need to have in the bank on the day
the baby is born in order to achieve all their goals?
What amount needs to be saved at the end of each year in
order for Bob and Carol to reach their financial goals?
Submission Details:
Submit your 2 to 4 page paper in a Microsoft Word document,
using APA style.
Name your Microsoft Word document
MBA5009_W3_LastName_FirstName.doc.
Submit to the Submissions Area by the due date assigned.
Week 4
Project
Instructions
The Allied Group intends to expand the company’s operation
by making significant investments in several opportunities available to the
group. Accordingly, the group has identified a need for additional financing in
preferred and new common stock and new bond issues. The (Krf) risk-free rate
for the company is 7%, and the appropriate tax rate is 40%. Also, the beta
coefficient for the company is 1.3 and the market risk premium (Km) is 12%.
New Debt (Kd)
The company has been advised that new bonds can be sold on
the market at par ($1000) with an annual coupon of 8%, for 30 years.
New Common Stock
Market analysis has determined that given the positive
history of the firm, new common stock can be sold at $29 per share, with the
last dividend being paid of $2.25 per share. The growth rate on any new delete
the words highlighted in yellow common stock has been estimated at a constant
rate of 15% per year for the next 3 years.
Preferred Stock
New Preferred Stock can be issued with an annual dividend of
10% of par and is paid annually and currently would sell for $90 per share.
Tasks:
Using the Capital Asset Pricing Model (CAPM), discuss and
calculate the cost of new common stock (Ks).
What would the dividend yield as a percentage (i.e., per
dividend payment divided by the book value of a share of stock) today and a
year from now if the dividend growth rate is 12%?
What is the after-tax cost as a percentage (e.g., interest
rate) of new debt today?
What are your recommendations for raising capital based on
your answers to the above questions plus considering other factors (e.g.,
current and potential changes in the economy locally, regionally, nationally
and worldwide, changes in the demand and/or supply plus cost of materials,
skilled labor, management and/or leadership, changes in interest, tax,
inflation and/or supply of investment capital)?
Submission Details:
Submit your 3 to 4 page paper in Microsoft Word, using APA
style.
Name your paper: MBA5009_W4_ LastName_FirstInitial.doc.
Submit to the Submissions Area by the due date assigned.
Week 5
Project
Instructions
The Allied Group is considering two investments. The first
investment involves a packaging machine, which can be used to package garments
for shipping orders to customers. The second possible investment would be a
molding machine that would be used to mold the mannequin parts.
The first possible investment is the packaging machine,
which will cost $14,000. The second investment, the molding machine, would cost
$12,000. The expected cash flows for the two projects are given below and the
cost of capital to the firm is 15%. Both machines will be unusable after five
years and have no salvage value.
The net cash flows for the two possible projects are given
in the following table:
Year
Packaging Machine
Molding Machine
0
($14000) ($12,000)
1
4100
3200
2
3300
2800
3
2900
2800
4
2200
2200
5
1200
2200
Address all of the following questions in a brief but
thorough manner.
What is each project’s payback period? Provide a detailed
explanation of how you calculated the payback period for each.
What is the NPV for each project? Provide a detailed
explanation of how you calculated the payback period for each.
What is the IRR for each project? Provide a detailed
explanation of how you calculated the internal rate of return (IRR) for each.
If both of the projects can be selected, then should both be
selected? Why or why not? Explain why or why not.If the two projects are
mutually exclusive, which project, if any, should be selected? Explain why.
Submission Details:
Submit your 4 to 5 page Microsoft Word document, using APA
style.
Name your report: MBA5009_W5_ LastName_FirstInitial.doc.
Submit to the Submissions Area by the due date assigned.
Week 1
knowledge check
Question 1
If a grocery store wanted to know how many cans of spinach
to order, they could use sales statistics to do so.
Question 1 options:
a) True
b)
False
Question 2
Descriptive statistics is concerned with inferring certain
characteristics under study.
Question 2 options:
a) True
b)
False
Question 3
The most useful measure of central tendency is the mode.
Question 3 options:
a) True
b)
False
Question 4
The chance of winning a lottery can be defined by the rules
of probability.
Question 4 options:
a) True
b)
False
Question 5
The science of collecting and analyzing data is called
probability.
Question 5 options:
a) True
b)
False
Week 2
knowledge check
Question 1
The accounting equation says that everything must balance
and equal out to show that we have recognized events correctly.
Question 1 options:
a) True
b)
False
Save
Question 2
Expenses will always have the term “expense” at the end of
the account name
Question 2 options:
a) True
b)
False
Question 3
The balance sheet is a record of the assets, liabilities,
and owners’ equity of a company as of a point in time.
Question 3 options:
a) True
b)
False
Question 4
The financial statements show the company’s operations and
results in financial terms.
Question 4 options:
a) True
b)
False
Question 5
The statement of stockholders’ equity explains changes in
equity from net income (or loss) and from owner investment and withdrawals over
a defined period of time.
Question 5 options:
a) True
b)
False
Week 3
knowledge check
Question 1
Present value (PV) calculations provide the basis for
valuation analysis and pricing of financial instruments.
Question 1 options:
a) True
b)
False
Question 2
Future value (FV) refers to the amount of cash to be
received or paid at a future date.
Question 2 options:
a) True
b)
False
Question 3
We value things less that are in the future relative to
things that might happen in a short time period.
Question 3 options:
a) True
b)
False
Question 4
The main elements of time value of money (TVM) are money
(cash), interest, andtime.
Question 4 options:
a) True
b)
False
Question 5
John Maynard Keynes, an economist, suggested we hold money
for three motives: transactions, precautionary, and speculative.
Question 5 options:
a) True
b)
False
Week 4
knowledge check
Question 1
The cost of capital is the primary factor in deciding
whether to pursue an investment.
Question 1 options:
a) True
b)
False
Question 2
The cost of capital typically provides the basis upon which
the targeted rate of return is determined.
Question 2 options:
a) True
b)
False
Question 3
The cost of capital is the rate at which the future cash
flows are discounted.
Question 3 options:
a) True
b)
False
Question 4
The NPV provides an estimate of how much (present) value the
investment adds to the business.
Question 4 options:
a) True
b)
False
Question 5
The time-value of money allows us to include time as a
factor in the decision process.
Question 5 options:
a) True
b)
False
