Managerial Finance Questions ***Original Answers Please**** Each question should be labeled and references cited per question. Plagiarism report MUST be attached!!!! Each bullet answered in full graduate level work required!!!
1. Read the journal article, “Businesses Seeking Working Capital-Survey.” Based on the information presented in the article, discuss the following:
- How should a business use working capital analysis?
- Which is more important to the short-term lender: the stock of cash or the flow of cash?
- Is it possible in today’s business to operate with no current liabilities?
Should be 200-250 words in length.
2. Compare and contrast the Internal Rate of
Return (IRR), the Net Present Value (NPV) and Payback approaches to
capital rationing. Which do you think is better? Why? Provide examples
and evidence from two articles from ProQuest to support your position. Should be 200-250 words in length.
3. Analyze the Capital Asset Pricing Model (CAPM). Using the course
text and an article from ProQuest as references, address the following:
- Explain how the CAPM assists in measuring both risk and return.
- Explain how the CAPM assists in calculating the weighted average costs of capital (WACC) and its components.
- Illustrate why some managers have difficulty applying the Capital Asset Pricing Model (CAPM) in financial decision making.
- Identify the benefits and drawbacks of using the CAPM.
Develop a 200 – 300 word answer supporting your position.
4. Imagine you are a representative of management in the company you
have selected for your Week Six assignment and you must make a capital
budgeting decision. The decision is to implement a new computer
network system to decrease the time between customer order and delivery.
The cost will be 10% of last year’s profits. You are charged with
describing the important considerations in the decision-making process
to upper management. In your response, be sure to include the
following:
- A description of the important factors, in addition to
quantitative factors, that were considered when making this capital
budgeting decision. - An explanation of how these factors are significant to the company.
- A summary of how you will determine the criteria to
rank capital budgeting decisions and whether some criteria are more
important than others. - A calculation of the proposed return on investment based on criteria you select and justification for that ROI.
Develop a 200 – 250 word explanation supporting your recommendations.
Tip: For help with reading an annual report access this handy guide from Money Chimp (http://www.moneychimp.com/articles/financials/fundamentals.htm)
5. Go to MSN Money.
(http://investing.money.msn.com/investments/key-ratios) and type in a
ticker symbol for a company with the first letter of your last name.
Next, complete the following:
- Select “Key Ratios” on the left menu panel.
- There are several categories listed for ratios. Select one “Financial Condition Ratio” and one “Management Efficiency Ratio”.
- Open the Profile section on the left menu panel and you
will see “Industry” is identified. Find a competitive company within
that industry and compare those ratios to the ones you just found.
Examine your findings and determine whether your company
outperforms its competition based on financial ratios. Identify where
your firm seems to lag. Describe how your firm compares with the
industry and speculate as to why you believe your firm is performing as
it is.
Develop a 200 – 300 word answer supporting your position.
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