Assuming 2% growth, the terminal value has a NPV of $4,843 million for 2009 and beyond. Note that without the terminal value for sales after 2009, the investment has a negative NPV of $296 million. Discount rate is calculated by; R = Rf + (Rm – Rf), so the US bonds rate (Risk-free rate, Rf) and the evaluated riskiness (), and Market riskiness (Rm) all affect the discount rates. Also note that the operating margins are computed before repayment of capital contributions from vendors or risk sharing partners (RSPs) and launch aid from the partner national governments. 2.
The FASB Statement No. 162, is The Hierarchy of Generally Accepted Accounting Principles, which became effective on November 13, 2008, it identified the sources of accounting principles and the framework for selecting the principles used in preparing the financial statements of nongovernmental entities that are presented in conformity with GAAP. The purpose of Statement 162 was to arrange the sources of GAAP in a hierarchy for users to apply accordingly. Once the Codification is in effect, all of its content will carry the same level of authority, effectively superseding Statement 162. Keywords: Sources of GAAP, Consolidation of Variable Interest Entities, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and Disclosure of Subsequent Events Week One Homework Assignment The four most recent FASB Accounting Standards Codification amendments will be summarized within this text.
But the impact may not be very significant even if an average rate is taken. The effort required to estimate the inflation rate for each element may not justify the accuracy that may be obtained. If the understanding in the project is that sales and costs may increase by different values very different from the average inflation, then we may need to consider the inflation separately. Question 9 NPV $178,337 IRR 21.6% MIRR 17.6% ARR 28.5% Payback 2.56 years (The figures are from the attached file with Cell C38 = 4% and C39 =2% – sales inflation taken at 4% and cost inflation at 2%) Question 10 a. The NPV would decrease since the costs will be higher and the new NPV is $98,762 NPV $98,762 IRR 17.5% MIRR 15.2% ARR 22.2% Payback 2.76 years (The
Case 2.3: Happiness Express, Inc. 1. The primary audit objectives used by auditors to accomplish by confirming a client’s year-end accounts receivable is stated in SAS No. 67, the Confirmation Process. The assertions used by this standard include existence or occurrence, completeness, and valuation. The existence assertion is to make sure that the client and accounts exist, the completeness is to make sure that all of the balances are recorded, and the valuation is to make sure that the balances are recorded at the correct amount.
Accelerated depreciation does increase the value of an investment, however before it is explained how, it is important to define and point out the relevance of depreciation, book value, market value, inter-period tax allocation and deferred tax liability. Depreciation is a non-cash expense that lowers the value of assets over a period of time. Assets are depreciated for two reasons – wear and tear and old models becoming obsolete. Depreciation’s relevance to accelerated depreciation is that accelerated depreciation is taking base depreciation and accelerating it to report more depreciation earlier in the depreciation cycle. Book value is the value that an asset is on the balance sheet.
International Journal of Health Services, 35(1), p. 63–90. Retrieved November 10, 2010, from http://pnhp.org/facts/myths_memes.pdf Myers, J. (2005). Health insurance: insured paying extra to cover uninsured. The Earth Times.
Case 5-1 Stern Corporation On December 31, 2006, before the yearly financial statements were prepared, the controller of the Stern Corporation re affected accounts receivable and the allowance for doubtful accounts. The controller first examined the December 31, subsequent review of the year's transactions applicable to accounts receivable revealed the items listed below: 1. Sales on account during 2006 amounted to $9,965,575. 2. Payment received on accounts receivable during 2006 totaled $9,685,420.
Operating income moved along the same path for the period albeit at a lower rate. The company’s invest ment in its self-insurance fund and interest income contributed significantly to the difference between operating income and net income. Revenue fell off by 12% in 2009 however; it increased by 22% in 2010. The company was able to increase it domestic and commercial rate after an application was made to the Fair Trading Commission. Fuel expenses grew at a faster rate than sales, fuel costs although seeing a fall off in 2009 by 20.52% rose by 29% in 2010.
In FY 2010 VA’s ranking dropped from 16 to 23 out of 28 of the large Federal agencies. Principle corrective strategies should focus on improving communications, education, and competencies on EEO and diversity issues” (Message from the Secretary of Veterans Affairs (2010). “High volume of discrimination complaints: The per capita filing rate at the informal stage remained steady at 1.46 percent from FY 2009 to FY 2010 (slightly higher than the government-wide average of 1.39 percent); and the formal filing rate decreased from .76 percent to 0.72 percent (still higher than the government-wide average is of 0.60 percent). While the Department has made some progress in the last couple of years, continued work is needed to reach the government-wide levels. VA experienced an increase in findings of discrimination for FY 2010 (22 in FY 2009 versus 33 in FY 2010).
This step takes the controls and other factors from the previous steps and integrates people, technology and policy and processes into the solution. (Whitman & Mattord, 2010). Lastly, Measuring Program Effectiveness is the last phase in Microsoft’s Four Phases of Risk Management. The final phase is an