Recognize legal issues in Canadian and international trade and investment. 2. Recognize and apply legal principles in the areas covered by the course when evaluating a proposal, writing a contract and/or making a recommendation to a client. 3. Understand product liability issues and recotnize contractual and non-contractual liability in business transactions.
| | | Establishes a market value for the firm. | | | Makes it easier for owner-managers to engage in profitable self-dealings. | 8 points Question 2 Financial Accounting Standards Board (FASB) Statement #13 requires that for an unqualified audit report, financial (or capital) leases must be included in the balance sheet by reporting the Answer | | residual value as a fixed asset. | | | residual value as a liability. | | | present value of future lease payments as an asset and also showing this same amount as an offsetting liability.
These recommendations can be implemented at no cost to Crouse Hinds via negotiation, consolidation, and coordination of transportation. Problem statement: Carol Quinn, Vice President of Operations, seeks reductions in logistic expenses at Crouse Hinds. Analysis: This report proposes transportation solutions that significantly reduce transportation costs, reduce risk to Crouse Hinds for in-transit damage, and take advantage of advantageous dense, not easily damaged freight and more efficient transportation routes to negotiate better freight terms. Inbound freight: Inter-company transfers First, Crouse Hinds inter-company transfers ship TL from Brunswick, ME and Windsor, CT, shipments which are not full 45,000 pound Truck Loads, at a combined annual cost of $202,650. Crouse Hinds only ships 25,000 pounds from Brunswick and 20,000 pounds from Windsor.
Since the Walton Work Wear line is in the production stage, its accumulated development costs should be capitalized. The Carroway Cool Top has not started it commercial production which would allow the development costs not to be amortized yet. Also interest costs on loans to generate financing for the R&D activates of a product can be capitalized rather than expensed. The capitalization of interest would allow CCL to reduce taxable income in the future when it is more profitable. I would recommend that CCL make the above changes immediately so that the financail statements are not incorrect.
· Liability-A C Corporation has limited liability in that it is seen as a separate entity from the owners, which in turn protects their personal assets from being taken to pay for the company’s debt or liability losses. As with the other business entities, insurance can be purchased to shield the assets from being taken due to a liability loss. · Income taxes-Corporations are taxed twice. They are first taxed on the profits made by the corporation itself then the profits to the shareholders, also known as dividends, are taxed. · Longevity-The dissolution of a C-Corporation can occur because of a shareholder becoming disabled or dying, the failing profits of the company or because they can not agree on the direction or handling of the company.
A rising ROE suggests that a company is increasing its ability to generate profit without needing as much capital. It also indicates how well a company's management is deploying the shareholders' capital. In other words, the higher the ROE the better. Falling ROE is usually a problem. CAGR: Operating income, % Operating income (EBIT) measures a company's earning power from ongoing operations and it largely used by investor because it excludes the effects of different capital structures and tax rates used in different companies.
Compass Box Whisky Company case 1. The costs in Exhibit 3b: Warehousing Business: Warehousing is required in order to store the whisky through its maturation and aging stage. The costs related from the warehousing operations are directly related to the operational costs of the business as an integral part of the product manufacturing phase. Accounting: Since the warehousing of the product is a required part of the manufacturing process (ie. To get the inventory to a usable condition) all warehousing costs should be capitilised as part of inventory.
Question 1 Currently, 9.30% is used as their hurdle rate and satisfied with the intellectual relevance of a hurdle rate as an expression of the opportunity cost of money by the managers. As a result the firm’s share prices are sluggish. Their price-to-earnings ratio is also below investor’s expectation in comparison to the company’s risk. The relationship between risk and return is important to take into consideration. The constant hurdle rate results in a flat line and doesn’t correlate risk with return.
Seagate management have a fiduciary duty to protect the wealth of shareholders and ensure a fair offer tendering hence they have narrowed down to opt for this two-staged LBO transaction. Given that the expected cash flows of Seagate were stable and established, it makes leveraged buyout feasible. The borrower is well credit rated, cash flows are steady and the interest rate offered is financially reasonable hence the leveraged-buyout is suitable for Seagate. There are 3 potential sources of value creation in this transaction: 1. Use of a risk hedging financial contract, the swap 2.
Case: Great Lakes Carriers 1. What marketing data would you want to have available to make the decisión? First of al lis important to know the changes that the demand of cole and iron ore has had during the past few years . Because these have dresead , is important to know the new demand to evaluate two important things: * If its necesary the new ship that Kate sugested , this ship have a maximium carrying capacity but may be not necesary if the demand is low * How are going to be the schedules are also defined by the demand because they need to evaluate the rentability of the transportation in each port , also the frecuency of deliveries because one port can demand more tan another one. With the dates about the demand , GLC can evaluate the ofer that they need to handled the demand , and the way that they are gona do it , if they are going to do some hauls by trucks or by ships , how many workers they need to have , the schedudels that they are going to handled etc.