01/04/15 Flashcards
VALUE OF EQUITY/VALUE OF DEBT+VALUE OF EQUITY=
PROPORTION OF EQUITY IN FINANCIAL STRUCTURE.
DIVIDING RETAINED EARNINGS BY THIS PERCENTAGE GIVES THE?????
MAXIMUM LEVEL OF INVESTMENT THAT CAN BE MADE WITHOUT INCREASING DEBT OR EQUITY.
THE COST OF MOVING, HANDLING, AND STORING ANY
INDIVIDUAL PRODUCT…THIS NON VALUE ADDED COST ASSOCIATED WITH ???? ??? ???? INVENTORY IS THE MOST SIGNIFICANT
WORK IN PROCESS
TO ADJUST A HISTORICAL COST FOR INFLATION TAKE THE HISTORICAL COST AMOUNT AND MULTIPLY IT BY THE CPI CURRENT/CPI LAST.
HOW TO GET HISTORICAL COST USING CPI
TO CALCULATED THE ????? RETURN FROM INVESTMENT TAKE THE PV OF CASH FLOWS X PROBABILITY OF OUTCOME AND ADD THEM ALL TOGETHER.
EXPECTED RETURN
????? ELEMENTS NEEDED WOULD BE THE MOST CRITICAL REPORT TO INCLUDE IN A SYSTEMS SPECIFICATION REPORT FOR A FINANCIAL REPORT
DATA
A CHANGE IN US TASTES IN FAVOR OF JAPANESE GOODS WOULD CAUSE PRESSURE FOR THE JAPANSE YEN TO ????? IN COMPARISON TO THE US DOLLAR….THE INCREASE IN DEMAND FOR THE GOODS IN THE US WOULD INCREASE DEMAND FOR YEN
APPRECIATE
Y=A+BX (WHATS THE INDEPENDENT VARIABLE?)
X—IT CAN TAKE ON ANY VALUE AND DOES NOT DEPEND ON ANOTHER
?????? IS EQUAL TO THE NET OPERATING PROFIT AFTER TAXES MINUS THE COST OF CAPITAL INVESTED
ECONOMIC VALUE ADDED
ASSISTS WITH NON ROUTINE DECISIONS, SERVES STRATEGIC LEVELS OF THE ORG., ANSWERS QUESTIONS ABOUT COMPANY COMPETITORS, AND IDENTIFIES ACQUISITIONS THAT WOULD PROTECT THE COMPANY FROM CYCLICAL BUSINESS SWINGS
EXECUTIVE SUPPORT SYSTEM
THE ?????? PREVENTS A PROGRAMMER FROM ALTERING A PROGRAM AND USING THAT PROGRAM IN A PRODUCTION RUN
LIBRARIAN (SECURES PROGRAMS AND DATA)
NET INCOME / INVESTMENT =
ROI RETURN ON INVESTMENT
WACC-
TAKE THE PERCENTAGE OF THE DEBT OR EQUITY IN RELATION TO THE TOTAL OF THE TWO AND MULTIPLY THIS PERCENTAGE TIMES THE INTEREST RATE GET THE ????FACTOR
WEIGHTING FACTOR
ADD THE WEIGHTING FACTORS UP TO GET THE WACC
?????? RATE SWAP—–
THIS TRANSACTION IS USED TO OFFSET INTEREST RATE RISK. IT DOES THIS BY ENTERING INTO AN AGREEMENT WITH A BANK TO SWAP ONE INTEREST RATE FOR ANOTHER IF NEED BE.
INTEREST RATE SWAP
THE USE OF MESSAGE ENCRYPTION SOFTWARE INCREASES ??????
OVERHEAD—
THE TIME TO ENCRYPT AND DECRYPT THE DATA SLOWS DOWN PRODUCTION.
BUSINESS, OPERATIONS, SUPPLY, PRODUCT, AND POLITICAL RISK ALL FALL UNDER ????? RISK ERM
FINANCIAL
A CURRENT RATIO OF 2.5 TO 1 MEANS THAT THE COMPANY HAS 250,000 IN ASSETS TO EVERY 100,000 IN ?????
LIABILITIES
EXAMPLE NET INVESTMENT CALCULATION:
The new press costs $225,000 and will require $20,000 to install ($225,000 + $20,000 = $245,000).
In addition, the investment in the new press will require an increase in working capital of $6,000.
Increase in inventory: $ 4,000
Increase in accounts receivable: 16,000
Increase in accounts payable: (14,000)
———
Increase in working capital: $ 6,000
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From a cash flow perspective, an increase in inventory and accounts receivable is a reduction of cash. An increase in accounts payable is an increase in cash.
Therefore, the total cash outflow is $251,000 ($245,000 + $6,000).
Cash inflows:
The old press has a book value of $15,000. The loss on the sale is $10,000 ($15,000 book value - $5,000 cash received) and the tax savings from the loss is $4,000 (40% × $10,000). Thus, total cash inflows are $9,000 ($5,000 + $4,000).
Net investment:
Cash outflows - Cash inflows = $251,000 - $9,000 = $242,000
EXAMPLE NET INVESTMENT CALCULATION:
THE 8 COMPONENTS OF ???? ERM FRAMEWORK ARE…
INTERNAL ENVIRONMENT, OBJECTIVE SETTING, EVENT IDENTIFICATION, RISK ASSESSMENT, RISK RESPONSE, CONTROL ACTIVITIES, INFORMATION AND COMMUNICATION, AND MONITORING
THE COSO
COMPONENT OF INTERNAL CONTOL THAT ENSURES THAT MANAGEMENTS DIRECTIVES ARE CARRIED OUT….
CONTROL ACTIVITIES
A DOWNWARD SLOPING YIELD CURVE THAT DEPICTS THE TERM STRUCTURE OF INTEREST RATES IMPLIES THAT PREVAILING ST RATES ARE HIGHER THAN PREVAILING?????
LT RATES
