Project #45595 - Managerial Accounting

1.  Examine the functions and operations of investment banks in the

    U.S. economy by answering each of the following questions:

    (a) Describe two financial services provided by investment banks.

    (b) Identify two types of securities that investment bank

    syndicates sell high, globally. (c) Does it pay to search for the

    best available investment bank or should a firm stay loyal to a

    given investment bank? Explain? (d) Could the U.S. government

    reduce its regulatory constraints on investment banks in a way that

    that would help firms and the economy?  Explain.


2.  Explain how it could help a firm to: (a) buy back some of its

    common stock; (b) increase its use of internal financing relative

    to external financing; (c) replace some equity financing with debt

    financing; (d) take a public firm private; and (e) pay down some of

    the firm's debt?


3.  Calculate the break-even point (Q), for a firm whose: (a) total

    fixed cost (TFC) = $100,000, product price per unit of output

    (P) = $8.00, and average variable cost (AVC) = $4.00.

    (b) TFC = $600,000, P = $20,000, and AVC = $10,000.


4.  How much will a 15% increase in sales increase a firm's net

    operating income (NOI) and increase its net income (NI), if:

(a)       its degree of operating leverage (DOL) = 3.0, and its degree

of financial leverage (DFL) = 4.0? (b) its DOL = 2.0 and DFL = 2.5?


5.  (a) How do business managers determine that acquiring a given

    working capital asset would help their company financially?   

(b)       Identify a working capital asset that is particularly time

consuming to manage, and explain why. (c) Would a current ratio < 1

for a company help its managers identify a financial management

problem?  Explain. 


6.  Explain what financial problems, if any, may be created by each of

    the following company practices: (a) The company doesn’t offer

    credit to its customers or accept credit card payments for its

    retail sales. (b) The company has a high percentage of bad debts on

    its accounts receivable.  (c) The company is late in paying some of

    its suppliers. (d) Many customers are complaining about substantial

    product quality defects. (e) The company has a substantial backlog

    of orders.


7.  Describe a business practice that would help a company manage each

    of the following financial risks: (a) interest rate risk;

    (b) liquidity risk; and (c) credit risk.


8.  (a) Describe three potential causes of errors in preparing

    projected (i.e., pro forma) financial statements for a company for

    the next three years. (b) Describe two unethical practices of some

    financial managers in preparing financial statements that could

    hurt them and their company.


9.  (a) Explain why financial planning is an important part of business

    planning. (b) Describe one way that financial ratio analysis of

    projected financial statements could be efficiently used by

    managers for financial planning.


10. Use the following data from a firm's pro forma (i.e., projected or

    forecasted) financial statements to calculate the following

    profitability ratios for the firm, assuming that all stocks are

    common stocks: (a) net profit margin; (b) return on total assets;

    (c) return on equity; (d) price-earnings ratio. 


          Sales                               $ 500 million

          Net income                             30 million

          Total Assets                         1000 million     

          Stockholders' Equity                  750 million

          Number of Common Stock Shares          10 million


          Price per share of common stock $75.00

Subject Mathematics
Due By (Pacific Time) 11/05/2014 05:00 pm
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