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I. Title: Integrated Accounting & Financial Management Individual project
II. Introduction:
Course Outcomes Assessed on this Project:
A. Measurement, Assessment, & Interpretation: Apply monetary assertion Assessment to judge stockholder’s fairness and capital budgeting for 2 companies
B. Strategic Perspective: Consider information and knowledge for implementation of strategic plans.
C. Resolution making: Consider the strengths and weaknesses of company methods from current monetary efficiency.
D. Communication: Talk clearly in writing and talking, assembly expectations for content material, function, group, viewers, and format particularly APA Model.
Situations
Having simply graduated together with your MS diploma in accounting and monetary administration, you’re keen to begin making use of for positions with increased salaries. That’s, in fact, one purpose you determined to earn your grasp’s diploma! Happily, you’re one of many prime three candidates for a place at Benson, Cundiff, & Gilbert a monetary accounting and brokerage agency within the coronary heart of Washington, DC. You’ve all the time needed to dwell within the District, as locals name it.
Sasha, the pinnacle of Human Sources at Benson, Cundiff, & Gilbert referred to as this morning. After a short dialogue, Sasha says, “in preparation on your third interview you’ll put together a monetary Assessment of economic statements and reply to questions ready by our Board of Administrators. We’ve executed this kind of interviewing previously and typically a couple of candidate is employed: not for a similar place however in associated jobs. Are you prepared to partake in this kind of interview?” With out giving it a number of thought since you didn’t wish to sound hesitant, you say “Completely; what time and the place?”
III. Steps to Completion:
1. Assessment the monetary statements, ratios, and Different Info for Company A in Appendix A.
2. Reply the Company A Stockholders’ Fairness Questions in paragraph format. Don’t rewrite the questions in your report.
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Company A. Stockholders’ Fairness Questions: i. Calculate the common inventory return from 20X1–20X3. ii. Calculate the usual deviation over this identical interval. iii. Calculate the coefficient of variation over this era. iv. Assume that the CAPM holds, the Company has a beta of 1.50, and
the 30-year U.S. Treasury bonds promote at an eight% yield. Utilizing the CAPM, calculate Company A’s required fee of return.
v. Calculate the greenback quantity of dividends that have been declared throughout 20X3.
vi. Calculate the (intrinsic) worth of Company A’s inventory worth at year- finish 20X3 utilizing the dividend development mannequin.
vii. Examine the intrinsic worth to the market worth of the Company A. Clarify the distinction.
viii. Examine the intrinsic worth and market worth to the ebook worth of Company A’s. Clarify the distinction.
ix. Put together the journal entry to report the 20X3 buy of treasury inventory.
x. Recalculate 20X3 earnings per share, 20X3 present ratio, and 20X3 debt-to-assets assuming Company A by no means bought treasury inventory (i.e., has zero treasury inventory at year-end 20X3), and as a substitute left the monies in money.
a. Assume that administration made a daring prediction to traders at year-end 20X2 that 20X3 EPS can be a minimal of $6.50 and that this could verify the sturdy development fee skilled by Company A. On the identical time, a member of Company A’s board of administrators complained about using capital to buy Treasury Inventory and mentioned that administration ought to reinvest the monies again into Company A. Clearly, administration believes that the acquisition of treasury inventory over the previous three years elevated shareholder worth. Required: Who’s appropriate—administration or the member of the board? Use quantitative information to help your reply.
xi. There are three elements to this Question Assignment:
a. Assume that Company A desires to buy 5,000 extra
treasury shares in early 20X4 after which promote these identical 5,000
shares at year-end 20X4 when, at the moment, Company A
believes that the market worth will approximate $62 per share
(under its year-end 20X3 intrinsic worth).
Required: All else equal, is that this buy a great use of
capital?
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b. Required: Ought to collectors proud of the choice to buy the treasury inventory?
c. Suppose that on January 1, 20X4, Company A sells the
1,000 shares of TS bought in 20X1; Company A bought this
inventory on the market worth at year-end 20X3.
Required:
Put together the journal entry to report this transaction.
xii. How does this transaction influence the three monetary statements?
three. Assessment the monetary statements, ratios, and knowledge under for Company B in Appendix A.
four. Reply the Company B Capital Budgeting Questions in paragraph format. Don’t quantity or rewrite the questions in your report.
Company B. Capital Budgeting Questions:
1) Calculate the weighted common price of capital for Company B as of year- finish 20X3.
Company B bought gear with the intention to facilitate the processing of its product (with the intent of increasing its income) over the subsequent few years. On the finish of this project (finish of 20X7), a provider will start to take over the processing of this product. A couple of info concerning the buy are listed under:
a. The price of the gear, together with transport and set up, is
$400,000. The complete quantity will probably be paid in money. The gear will
be bought in early 20X4.
b. The lifetime of the gear is 4 years (finish of 20X7), at which era it’s anticipated to promote for $40,000.
c. Company B will initially buy $200,000 of stock; 70% of
stock purchases over the lifetime of this project will probably be financed by way of
accounts payable.
d. Recurring money flows happen at year-end of every 12 months, and termination
money flows happen at year-end 20X7.
e. All money flows generated annually are paid to Company B (i.e., proprietor of the project).
Primarily based on this data, Company B ready the Projected Steadiness Sheet and Projected Revenue Assertion for this project, which may be present in Appendix A. 2) Calculate the money flows related to this project. Calculate these money
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flows by 12 months, and for 20X4, individually calculate the money flows that happen firstly and finish of the 12 months. You should have 5 money stream calculations:
i. Starting of 20X4
ii. Finish of 20X4
iii. Finish of 20X5
iv. Finish of 20X6
v. Finish of 20X7 (contains recurring money flows and termination money flows).
three) Examine the combination undiscounted money flows to the combination web
revenue flows. Clarify the distinction (if any).
four) Calculate the current worth of the long run money flows.
5) Calculate the online current worth and inside fee of return related to this project.
6) Ought to Company B settle for or reject this project? Clarify your resolution.
7) Examine the interior fee of return to the weighted common price of capital. Is the distinction between the IRR and WACC in line with ROE? Clarify your reply.
IV. Deliverables
Submit one Phrase doc.
Quantity your solutions to correspond to the numbers on this project file.
The place written solutions are required, put together your responses in appropriate English grammar, and use spell test earlier than submitting to your task folder.
As a reminder, you might be making ready this file to current to the Board of Administrators for a job interview. Thus, it ought to be organized and simple to observe. All numeric solutions should embody the formulation used to seek out the solutions. In different phrases, present the way you derived all numeric solutions. Use commas for all numbers higher than 999. Use a greenback signal and two decimal locations for all greenback figures.
State any assumptions you make to help your selections.
V. Rubric
The rubric is situated within the Individual Project folder.
VI. Ideas for Success
Obtain Appendix A, which is situated within the Integrated Accounting & Financial Management Individual Project 1 folder.
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Learn the grading rubric earlier than starting the project to totally perceive the necessities; ask questions concerning the necessities if wanted.
Learn this project file till you absolutely perceive the necessities. Use the monetary ratio sources within the Week 2 module together with exterior
sources. Use spell test earlier than submitting your last model. Submit the deliverable on or earlier than the due date. Assessment the Late Coverage, which will probably be strictly enforced. It’s situated in Studying
Sources/Late Coverage. Ask your professor questions as wanted.
Tailored from “An Integrated Method to Starting Financial Accounting and Finance Programs,” by McWilliams, V. B., & Peters, M. F., 2012, Points in Accounting Schooling, 27(1), p. 299–336. Copyright 2012 by the American Accounting Affiliation.
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Reference
McWilliams, V. B., & Peters, M. F. (2012). An Integrated Method to Starting Financial Accounting and Finance Programs. Points in Accounting Schooling, 27(1), 299–336.
I. Title: Integrated Accounting & Financial Management Individual project
II. Introduction: Course Outcomes Assessed on this Project:
A. Measurement, Assessment, & Interpretation: Apply monetary assertion Assessment to judge stockholder’s fairness and capital budgeting for 2 companies
B. Strategic Perspective: Consider information and knowledge for implementation of strategic plans.
C. Resolution making: Consider the strengths and weaknesses of company methods from current monetary efficiency.
D. Communication: Talk clearly in writing and talking, assembly expectations for content material, function, group, viewers, and format particularly APA Model.
Situations
III. Steps to Completion:
1. Assessment the monetary statements, ratios, and Different Info for Company A in Appendix A.
2. Reply the Company A Stockholders’ Fairness Questions in paragraph format. Don’t rewrite the questions in your report.
three. Assessment the monetary statements, ratios, and knowledge under for Company B in Appendix A.
four. Reply the Company B Capital Budgeting Questions in paragraph format. Don’t quantity or rewrite the questions in your report.
IV. Deliverables
Submit one Phrase doc.
Quantity your solutions to correspond to the numbers on this project file.
The place written solutions are required, put together your responses in appropriate English grammar, and use spell test earlier than submitting to your task folder.
As a reminder, you might be making ready this file to current to the Board of Administrators for a job interview. Thus, it ought to be organized and simple to observe. All numeric solutions should embody the formulation used to seek out the solutions. In different phrases, present how …
State any assumptions you make to help your selections.
V. Rubric
The rubric is situated within the Individual Project folder.
VI. Ideas for Success
Obtain Appendix A, which is situated within the Integrated Accounting & Financial Management Individual Project 1 folder.
Learn the grading rubric earlier than starting the project to totally perceive the necessities; ask questions concerning the necessities if wanted.
Learn this project file till you absolutely perceive the necessities.
