Ch. 13: Interpreting Financial Statements BYP13-4 Discussion Questions What are some of the various lease options? When would you use one option over the others? What could be the financial impact of this decision? Under which circumstances would you lease versus purchase?
2. a. Critique Ace Repair’s current method of estimating its before-tax cost of debt. b. Is the earnings yield (E/P) an appropriate measure of the firm’s cost of equity? 3. a.
Learning Objective As a group, you will use the Meetings tool to discuss the Mindersoft Case, and reach a consensus about the problem(s), analyze the problem, and recommend a defensible solution. Your group will: Evaluate an early-stage investment opportunity from the VC's perspective: market opportunity, business model, management team, and financials and come up with an offer for the entrepreneur. Perform the valuation of an early stage Company using the pre and post money method, the venture capital method and discounted cash flow method of valuation. Illustrate the valuation gap between the VC and entrepreneur and underscore that valuation is eventually driven by negotiation. Explore how entrepreneurs make financing decisions when they are faced with timing issues and low bargaining power versus VCs.
2. Would Calaveras be a creditworthy borrower? What are the principal risk factors in this prospective credit? Can Calaveras adequately service the proposed amount of debt? What other considerations might influence your evaluation of this firm as a prospective borrower?
Which of the following choices regarding the proprietary fund financial statements is true? A. The Statement of Net Assets (Balance Sheet) reflects equity as contributed equity and retained earnings. B. Normally, a reconciliation is required between the proprietary fund financial statements and the business-type activities column in the government-wide financial statements.
How do you reconcile the empirical findings with the CAPM theory? 3. Discuss DF A ’ s trading strategy. How does it work, and what are the costs and benefits? Can DF A keep the competitive advantage in the future?
What tax credits can be earned on depreciation of an owned asset or the lease payments? This is another important question. Overall, it is important to consider the longevity and value of the item against corporate goals to determine if a lease or purchase makes more
| 1. | Question : | (TCO A, B, C) External users want answers to all of the following questions except: | | | Student Answer: | | Is the company earning satisfactory income? | | | | Will the company be able to pay its debts as they come due? | | | | Did the company use a budget to plan its expenses? | | | | How does the company compare in profitability with competitors?
What special role do CRAs play in financial markets and how successful have they been? 2. Are investors too reliant on CRAs and what will they
George is aware you are in an MBA Managerial Finance class and comes to you for advice on his working capital practices. More specifically George asks: 1. How you would describe my working capital practices, including my methods of capital budgeting analysis techniques? 2. What are potential pitfalls in my Capital Budgeting practices that I should be aware of?