Problem Set #7
Attached Files:
Building a Model – Marvel Renovations.xlsx
(18.835 KB)
Start with the partial model in the file attached. Marvel Pence, CEO of Marvel’s Renovations, a custom building and repair company, is preparing documentation for a line of credit request from his commercial banker. Among the required documents is a detailed sales forecast for parts of 2020 and 2021:
|
|
Sales |
Labor and Raw Materials |
|
May, 2020 |
$75,000 |
$80,000 |
|
June, 2020 |
$115,000 |
$75,000 |
|
July, 2020 |
$145,000 |
$105,000 |
|
August, 2020 |
$125,000 |
$85,000 |
|
September, 2020 |
$120,000 |
$65,000 |
|
October, 2020 |
$95,000 |
$70,000 |
|
November, 2020 |
$75,000 |
$30,000 |
|
December, 2020 |
$55,000 |
$35,000 |
|
January, 2021 |
$45,000 |
N/A |
Estimates obtained from the credit and collection department are as follows: collections within the month of sale, 20%; collections during the month following the sale, 60%; collections the second month following the sale, 25%. Payments for labor and raw materials are typically made during the month following the one in which these costs were incurred. Total costs for labor and raw materials are estimated for each month as shown in the table. General and administrative salaries will amount to approximately $25,000 a month; lease payments under long-term lease contracts will be $7,000 a month; depreciation charges will be $8,000 a month; miscellaneous expenses will be $5,000 a month; income tax payments of $30,000 will be due in both September and December; and a progress payment of $95,000 on a new office suite must be paid in October. Cash on hand on July 1 will amount to $70,000, and a minimum cash balance of $30,000 will be maintained throughout the cash budget period.
a. Prepare a monthly cash budget for the last 6 months of 2020.
b. Prepare an estimate of the required financing (or excess funds)—that is, the amount of money Marvel’s Renovations will need to borrow (or will have available to invest)—for each month during that period.
c. Would the cash budget be accurate if inflows came in all during the month, but outflows were bunched early in the month?
d. If its customers began to pay late, this would slow down collections and thus increase the required loan amount. Also, if sales dropped off, this would have an effect on the required loan. Do a sensitivity analysis that shows the effects of these two factors on the max loan requirement. Assume the purchases of labor and raw material also vary by the sales adjustment factor.
Submit your answers in a Word document.
Research Paper -Individual Submission
Attached Files:
Week 7 Research Paper – Research Topic List .docx
Week 7 Research Paper – Research Topic List .docx – Alternative Formats (19.201 KB)
Research Paper: This is a graduate course and students will be expected to research and write papers
summarizing in their own words what they have found on current topics from the weekly readings. Research is a theoretical review of relevant literature and application of findings in the literature to a topic related to a specific industry, field, or business problem.
The
research must be conducted using peer-reviewed trade or academic journals
. While Blogs, Wikipedia, encyclopedias, course textbooks, popular magazines, newspaper articles, online websites, etc. are helpful for providing background information, these resources are
NOT suitable resources for this research assignment.
Assignment Requirements:
i. Choose a research topic
from the chapter readings or from the list provided by your professor.
ii. Research/find a minimum at least four (4), preferably five (5) or more, different peer-reviewed articles on your topic from the University of the Cumberlands Library online business database. The article(s) must be relevant and from a peer-reviewed source. While you may use relevant articles from any time frame, current/published within the last five (5) years are preferred. Using literature that is irrelevant or unrelated to the chosen topic will result in a point reduction.
iii. Write a four (4) to five (5) page double spaced paper in APA format discussing the findings on your specific topic in your own words.
Note – paper length does not include cover page, abstract, or references page(s).
iv.
Structure your paper as follows:
a.
Cover page
b.
Overview describing the importance of the research topic to current business and professional practice in your own words.
c.
Purpose of Research should reflect the potential benefit of the topic to the current business and professional practice and the larger body of research.
d.
Review of the Literature summarized in your own words. Note that this should not be a “copy and paste” of literature content, nor should this section be substantially filled with direct quotes from the article. A literature review is a summary of the major points and findings of each of the selected articles (with appropriate citations). Direct quotations should be used sparingly. Normally, this will be the largest section of your paper (this is not a requirement; just a general observation).
e.
Practical Application of the literature. Describe how your findings from the relevant research literature can shape, inform, and improve current business and professional practice related to your chosen topic.
f.
Conclusion in your own words
g.
References formatted according to APA style requirements
v. Attach your paper to the Discussion board by the Thursday due date.
vi. Read and respond to at least four (4) other student postings by the Sunday due date.
Week Seven: Research Paper – List of potential research topics
To complete the Article Research Paper due in Week 7, please select a topic from the list provided below or from the chapter readings.
· Financial Markets
· Capital Allocation Process
· Debt, Equity and Derivative
· Securitization
· Mortgage-backed securities
· Federal Reserve Policy
· Investment Fund
· Regulation of Financial Institution
· U.S. Stock Market
· Financial Statements & Reports
· Working Capital
· Sarbanes-Oxley and Financial Fraud
· Performance Evaluation
· Return on invested capital
· The Federal Income Tax System
· Corporate Capital Gains
· Financial Analysis & Financial Ratios
· Common Size Analysis & Trend Analysis
· Comparative Ratios & Benchmarking
· Time Value of Money
· Perpetuities & Annuities
· What loans really cost
· The Great Recession of 2007
· Bonds Market
· Credit Default Swaps
· Sinking Funds
· Determinants of Market interest rates
· Bond Ratings
· The term structure of interest rates
· Bankruptcy & Reorganization
· Financing with Junk Bonds
· Investment Returns & Risk
· What does investment risk mean?
· Risk in a portfolio context
· Diversification and Multi-Stock Portfolios
· Capital Asset Principal Model
· Bernie Madoff Story
· The Efficient Markets Hypothesis
· The Fama-French Three-Factor Model
· Corporate Valuation and Stock Prices
· Do stock values affect long term or short term cash flows?
· Why are stock prices so volatile?
· Financial options
· Employee Stock Options
· The Black-Scholes Option Price Model (OPM)
· Taxes and Stock Options
· The Weight Average Cost of Capital
· Corporate Valuation and the Cost of Capital
· Global Variation in the cost of capital
· Managerial Issues and the Cost of Capital
· Capital Budgeting
· Capital Rationing
· Risk Analysis in Capital budgeting
· Risk Analysis
· Project Valuation
· The cash flow effect of asset purchases and Depreciation
· Externalities
· Tax Depreciation
· Financial Planning
· Implementing the Target Capital Structure
· Economies of Scale
· Conflicts between stockholders & Creditors
· Conflicts between managers & shareholders
· Monitoring and Discipline by the Board of Directors
· Charter provisions and by laws that effect the likelihood of hostile takeovers
· Using compensation to align managerial and shareholder interests
· Capital Structure and Internal Control systems
· Environmental Factors outside a firm’s control
· Stock Repurchase
· Tax Effect Theory
· Dividend Irrelevance Theory
· Empirical Evidence on Distribution Policies
· The impact of Distribution on Intrinsic Value
· The pros and cons of dividends and repurchases
· Capital structure
· Business risk and financial risk
· Capital structure theory
· Using the Black-Sholes Option Pricing Model to value equity
· Managing the maturity structure of Debt
· Supply Chain Management
· Credit Policy
· The cost of trade credit
· Revolving credit agreement
· Multinational versus domestic Financial Management
· Exchange rates
· Exchange rates & international trade
· The international monetary system and exchange rate policies
· Purchasing power parity
· International Money and Capital Markets
