Devry BUSN379 Week 2 Case Latest 2015
Case
Case I is due at the end of this week. Prepare a memo in Word,
which answers the questions in the Chapter 2 Case,Cash Flows and Financial Statements at Sunset Boards,
Inc., on page 51 of the textbook. Use Excel to solve any financial
calculations. You will be graded on correct financial analysis, proper use of
technology, business-like presentation of technology, and business-like
presentation.
Week 2 Case Study I.
A.Prepare the following (You may put this in Word
or submit an Excel):(60/60)
1. An
income statement for 2013 and 2014.
2.
A balance sheet for 2013 and 2014.
3.
Operating cash flow for 2013 and 2014.Hint: find the capital spending and
change in net working capital. Ending net fixed assets – Beginning net fixed
assets + Depreciation = Net capital spending. Ending NWC – Beginning NWC =
Change in NWC. Operating cash flow – Net capital spending – Change in NWC =
Cash flow from assets.
4.
Cash flow from assets for 2014
5.
Cash flow to creditors for 2014
6.
Cash flow to stockholders for 2014
B.How would you describe Sunset Boards’ cash
flows for 2014?(15/15)
Describe
each of: positive earnings, cash flow from operations, net working capital, new
fixed assets, total to all stakeholders, total to all bondholders, total to all
stockholders. Take this from your work in A.
C.What do you think about Tad’s expansion plans?(15/15)
Hint,
address these questions: Is the expansion plan risky? What is the cash flow?
What is the capital spending? How much does the company have to raise from
creditors? Can they afford to expand?
WEEK 4 CASE
Case
Case II is due at the end of this week. For this assignment,
prepare a memo in Word, which answers the questions in the Chapter 5 case, S &
S Air’s Mortgage, on page 165 of the textbook. Use Excel to do any financial
calculations. You will be graded on correct financial analysis, proper use of
technology, and business-like presentation.
Good
work effort with Week 4 Case Study II.
1.
Mortgage Payments(10/10)
a. What are
the monthly payments for a 30-year traditional mortgage?
b.
What are the monthly payments for a 20-year traditional mortgage?
2. Amortization(15/15)
a. Prepare an
amortization table for the first six months of the traditional 30-year
mortgage.
Year/
Beginning Balance / Total Payment / Interest Paymt / Principal Paymt / Ending
Balance
1 / $35,000,000.00 / 212,098.17 / 177,916.67 /
34,181.51 / 34,965,818.49
2 / 34,965,818.49 / 212,098.17 / 177,742.91 /
34,355.26 / 34,931,463.23
3 / 34,931,463.23 / 212,098.17 / 177,568.27 /
34,529.90 / 34,896,933.32
4 / 34,896,933.32 / 212,098.17 / 177,392.74 /
34,705.43 / 34,862,227.89
5 / 34,862,227.89 / 212,098.17 / 177,216.33 /
34,881.85 / 34,827,346.04
6 / 34,827,346.04 / 212,098.17 / 177,039.01 / 35,059.17 / 34,792,286.88
b. How much
of the first payment goes toward principal? Hint: just pull this number from
your table.
3. Smart Loan(25/25)
a. How long
would it take for S&S Air to pay off the smart loan assuming 30-year
traditional mortgage payments? Hint: The payment for a loan repaid with equal
payments is the annuity payment with the loan value as the PV of the annuity.
Bi-weekly payoff =
Bi-weekly payoff =
b. Why is
this shorter than the time needed to pay off the traditional mortgage?
The
bi-weekly payments pay off the loan quicker for two reasons. First, one-half of
the payment gets to the bank quicker each month, which reduces the interest
that accrues each month. Second, the company is actually making 13 full
payments each year (26 bi-weekly periods amounts to 13 monthly payments).
c. How much
interest would the company save?
4. Assume S&S Air takes out a bullet loan
under the terms described. What are the payments on the loan?(15/15)
a. Monthly payments
b. Bullet
Payment
5. What are the payments for the interest-only
loan?(15/15)
6. Which mortgage is the best for the company?
Are there any potential risks in this action?(10/10)
WEEk 6 CASE
Case III – Chapter 8 Case,Bullock Gold Mining, page 274 is due this week.
See the Syllabus section “Due Dates for
Assignments & Exams” for due date information.
Week 6
Case Study III.
1.Construct
a spreadsheet to calculate the payback period, internal rate of return,
modified internal rate of return, and net present value of the proposed mine.
You must submit the spreadsheet. Repeat your answers below.(60/60)
2.Based on
your analysis, should the company open the mine?(30/30)
Since
3. Bonus Question (not
graded): Most spreadsheets do not have a built-in formula to calculate the
payback period. Write a VBA script that calculates the payback period for a
project.
Work
written clearly and without errors of spelling or syntax. Points deducted: 0
Late
fee. Points deducted: 0
Your
work was distinguished. You answered the questions fully. Your writing was
clear and free of errors.
Total
Points: 90
Dr.
Geoff
Your
answers for section 3 and 6 were incorrect.
Your
work was distinguished. You answered the questions fully. Your writing was
clear and free of errors.
You
would have received fewer deductions if youhad shown your work. Your writing
was clear and free of errors. Your answers for section 3, 5, 6, 8 and 10 were
incorrect.
Your
answer for section 3 was incorrect.
