29 Dec Population parameters or

Population parameters or population characteristics can be estimated by taking representative samples of a population. In other words, conclusions about an entire population can be inferred from a sampling of that population. This sampling of the population can then be examined and inferences made about the general population it represents. Various measures provide different types of data or measures of data from which conclusions can be derived. Examples of these types of measures are Measures of Central Tendency and Measures of Dispersion.

Address all of the following questions in a brief but thorough manner.

What are the most common measures of central tendency? Include brief definitions for the common measures of central tendency as part of your initial posting.

How do these measures differ? How are they the same?

What information is provided by each of these measures and what do they tell us? How could you use measures of central tendency in decision making as a leader and/or manager?

What are the various measures of dispersion?

What are the uses of these measures and what are their limitations?

What does each of these measures tell a researcher? A leader or manager?

The final paragraph (three or four sentences) of your initial post should summarize the one or two key points that you are making in your initial response.

Your posting should be the equivalent of 1 to 3 single-spaced pages (500–1500 words) in length.

Week 2 discussion

Investments are based on the belief that the rate of return justifies or compensates the investor for the risk associated with that particular investment. The risk associated with this investment is associated with the chance that a loss will be incurred. Or, to put it another way, the greater the chance of a loss the more risky the investment. Therefore, some statistical measures of the risk involved with an investment are necessary before the investment is made.

Address all of the following questions in a brief but thorough manner.

What is the Expected Rate of Return on an investment and what does it tell us about the probability of the risk involved with a particular investment?

How could the required rate of return of an investment be estimated?

In terms of risk, what are the advantages (and/or disadvantages) of a well-diversified portfolio?

The final paragraph (three or four sentences) of your initial post should summarize at least the one or two key points that you are making in your initial response.

Your posting should be the equivalent of 1 to 2 single-spaced pages (500–1000 words) in length.

Week 3 discussion

Investors use the financial statements in many ways. One of the most important uses of these statements is to evaluate past performance and project future performance.

Address all of the following questions in a brief but thorough manner.

What are the major financial statements and what types of information does each provide the user?

What is a pro forma financial statement and what types of information does it provide the user?

Who and what are the potential users and uses of these types of pro forma financial statements?

The final paragraph (three or four sentences) of your initial post should summarize the one or two key points that you are making in your initial response.

Your posting should be the equivalent of 1 to 2 single-spaced pages (500–1000 words) in length.

Week 4 discussion

A firm’s capital structure is determined by more than just a component cost for each source of capital and is not fixed over time. Rather, the capital structure of a firm is determined by conditions in the domestic and international economies and it should also reflect changing conditions in the economy. In other words, the relationship between risk and return should be the major consideration in establishing the capital structure of the firm and the value of the firm.

Address all of the following questions in a brief but thorough manner.

What is the basic relationship between risk and return and how is this reflected in the value of the firm’s stock? The cost of debt?

What are the primary factors that should be considered when establishing a firm’s capital structure?

What are the primary differences and/or similarities between financial risk and business risk?

The final paragraph (three or four sentences) of your initial post should summarize the one or two key points that you are making in your initial response.

Your posting should be the equivalent of 1 to 2 single-spaced pages (500–1000 words) in length.

Week 5 discussion

Capital budgeting is the process by which long-term fixed assets are evaluated and possibly selected or rejected for investment purposes. The purpose of capital budgeting is to evaluate potential projects for possible investment by the firm.

Address all of the following questions in a brief but thorough manner.

What are the various methods for evaluating possible capital projects, in terms of their possible benefits to the firm? Describe the benefits and/or shortcomings of each.

What is the NPV profile and what are its uses?

The final paragraph (three or four sentences) of your initial post should summarize the one or two key points that you are making in your initial response.

Your posting should be the equivalent of 1 to 2 single-spaced pages (500–1000 words) in length.

Week 1 Project

Instructions

The Allied Group has acquired Kramer Industries and is now considering additional investments. They have determined that there is a firm that is a good fit for their portfolio, the Kramer firm of Montana. The firm was established in 1990 and has the following historical returns:

Kramer Industries

Year

Earnings

1990

(8% Loss)

1995

23%

2000

26%

2005

31%

2010

18%

Address all of the following questions:

What was the average return for the stock over the period of 1990 through 2010?

What was the standard deviation for the stock over this period?

Assume that you currently have a portfolio that returns 19.5%. If you add this stock to the current portfolio, what would happen to the average return on the portfolio?

Should Allied invest in the stock? Justify your response.

Submission Details:

Submit your 3 to 4 page paper in a Microsoft Word document, using APA style.

Name your document MBA5009_W1_LastName_FirstName.doc.

Submit your assignment to the Submissions Area by the due date assigned.

Week 2 Project

Instructions

Wal-Mart is one of the most dynamic companies in our economy. However, the company is being challenged in the market by new competitors. For the Wal-Mart Corporation, go online and find the annual report for the most recent year available.

Deliverables:

Based on the obtained annual report, complete the following table:

Ratio

Formula

Results

Operating Profit Margin After Taxes

Gross Profit Margin

Average Collection Period

Total Asset Turnover

Fixed Asset Turnover

Inventory Turnover

Debt to Total Assets

Times Interest Earned

Based the information in your table and in the annual report, evaluate the status of Wal-Mart on each of these ratios.

What would you conclude based on the information above in terms of the overall condition of Wal-Mart? What recommendations would you make?

Submission Details:

Submit your assignment in a Microsoft Excel spreadsheet. Cite any references in APA style. Show all your calculations

Name your document MBA5009_W1_LastName_FirstInitial

By the due date assigned, submit the completed assignment to the Submissions Area.

Week 3 Project

Instructions

Bob and Carol are planning for the birth of their first child exactly four years from today. They are now ready to start their savings plan for the big event. The current hospital cost for having a healthy baby at the local hospital is $6500 after all insurance payments. Pre-natal care for the immediate 12-month period prior to having the baby amounts to $2000 out-of-pocket costs. Carol’s best friend is planning a baby shower, so only a crib, a baby carrier, and other miscellaneous items will be needed, which all cost $1,200 today. However, these items will be purchased and paid for the day of the child’s birth, and the items are expected to increase in costs by 10% each year over the next four years due to inflation.

Bob and Carol now have $500 in cash that they plan to put in the bank in order to cover the all the new costs. Also, Uncle Ted has promised to contribute $1000 at the end of year two, as a present to Bob and Carol for baby expenses.

Currently, Bob and Carol can earn 6% compounded annually on this money. In order to be able to pay cash for all these expenses on the day the baby is born, how much will Bob and Carol have to save, assuming the baby is born exactly four years from today

Questions:

Draw the timeline that illustrates the timing of all the events of the situation described above.

How much will Bob and Carol need to have in the bank on the day the baby is born in order to achieve all their goals?

What amount needs to be saved at the end of each year in order for Bob and Carol to reach their financial goals?

Submission Details:

Submit your 2 to 4 page paper in a Microsoft Word document, using APA style.

Name your Microsoft Word document MBA5009_W3_LastName_FirstName.doc.

Submit to the Submissions Area by the due date assigned.

Week 4 Project

Instructions

The Allied Group intends to expand the company’s operation by making significant investments in several opportunities available to the group. Accordingly, the group has identified a need for additional financing in preferred and new common stock and new bond issues. The (Krf) risk-free rate for the company is 7%, and the appropriate tax rate is 40%. Also, the beta coefficient for the company is 1.3 and the market risk premium (Km) is 12%.

New Debt (Kd)

The company has been advised that new bonds can be sold on the market at par ($1000) with an annual coupon of 8%, for 30 years.

New Common Stock

Market analysis has determined that given the positive history of the firm, new common stock can be sold at $29 per share, with the last dividend being paid of $2.25 per share. The growth rate on any new delete the words highlighted in yellow common stock has been estimated at a constant rate of 15% per year for the next 3 years.

Preferred Stock

New Preferred Stock can be issued with an annual dividend of 10% of par and is paid annually and currently would sell for $90 per share.

Tasks:

Using the Capital Asset Pricing Model (CAPM), discuss and calculate the cost of new common stock (Ks).

What would the dividend yield as a percentage (i.e., per dividend payment divided by the book value of a share of stock) today and a year from now if the dividend growth rate is 12%?

What is the after-tax cost as a percentage (e.g., interest rate) of new debt today?

What are your recommendations for raising capital based on your answers to the above questions plus considering other factors (e.g., current and potential changes in the economy locally, regionally, nationally and worldwide, changes in the demand and/or supply plus cost of materials, skilled labor, management and/or leadership, changes in interest, tax, inflation and/or supply of investment capital)?

Submission Details:

Submit your 3 to 4 page paper in Microsoft Word, using APA style.

Name your paper: MBA5009_W4_ LastName_FirstInitial.doc.

Submit to the Submissions Area by the due date assigned.

Week 5 Project

Instructions

The Allied Group is considering two investments. The first investment involves a packaging machine, which can be used to package garments for shipping orders to customers. The second possible investment would be a molding machine that would be used to mold the mannequin parts.

The first possible investment is the packaging machine, which will cost $14,000. The second investment, the molding machine, would cost $12,000. The expected cash flows for the two projects are given below and the cost of capital to the firm is 15%. Both machines will be unusable after five years and have no salvage value.

The net cash flows for the two possible projects are given in the following table:

Year Packaging Machine Molding Machine

0 ($14000) ($12,000)

1 4100 3200

2 3300 2800

3 2900 2800

4 2200 2200

5 1200 2200

Address all of the following questions in a brief but thorough manner.

What is each project’s payback period? Provide a detailed explanation of how you calculated the payback period for each.

What is the NPV for each project? Provide a detailed explanation of how you calculated the payback period for each.

What is the IRR for each project? Provide a detailed explanation of how you calculated the internal rate of return (IRR) for each.

If both of the projects can be selected, then should both be selected? Why or why not? Explain why or why not.If the two projects are mutually exclusive, which project, if any, should be selected? Explain why.

Submission Details:

Submit your 4 to 5 page Microsoft Word document, using APA style.

Name your report: MBA5009_W5_ LastName_FirstInitial.doc.

Submit to the Submissions Area by the due date assigned.

Week 1 knowledge check

Question 1

If a grocery store wanted to know how many cans of spinach to order, they could use sales statistics to do so.

Question 1 options:

a) True

b) False

Question 2

Descriptive statistics is concerned with inferring certain characteristics under study.

Question 2 options:

a) True

b) False

Question 3

The most useful measure of central tendency is the mode.

Question 3 options:

a) True

b) False

Question 4

The chance of winning a lottery can be defined by the rules of probability.

Question 4 options:

a) True

b) False

Question 5

The science of collecting and analyzing data is called probability.

Question 5 options:

a) True

b) False

Week 2 knowledge check

Question 1

The accounting equation says that everything must balance and equal out to show that we have recognized events correctly.

Question 1 options:

a) True

b) False

Save

Question 2

Expenses will always have the term “expense” at the end of the account name

Question 2 options:

a) True

b) False

Question 3

The balance sheet is a record of the assets, liabilities, and owners’ equity of a company as of a point in time.

Question 3 options:

a) True

b) False

Question 4

The financial statements show the company’s operations and results in financial terms.

Question 4 options:

a) True

b) False

Question 5

The statement of stockholders’ equity explains changes in equity from net income (or loss) and from owner investment and withdrawals over a defined period of time.

Question 5 options:

a) True

b) False

Week 3 knowledge check

Question 1

Present value (PV) calculations provide the basis for valuation analysis and pricing of financial instruments.

Question 1 options:

a) True

b) False

Question 2

Future value (FV) refers to the amount of cash to be received or paid at a future date.

Question 2 options:

a) True

b) False

Question 3

We value things less that are in the future relative to things that might happen in a short time period.

Question 3 options:

a) True

b) False

Question 4

The main elements of time value of money (TVM) are money (cash), interest, andtime.

Question 4 options:

a) True

b) False

Question 5

John Maynard Keynes, an economist, suggested we hold money for three motives: transactions, precautionary, and speculative.

Question 5 options:

a) True

b) False

Week 4 knowledge check

Question 1

The cost of capital is the primary factor in deciding whether to pursue an investment.

Question 1 options:

a) True

b) False

Question 2

The cost of capital typically provides the basis upon which the targeted rate of return is determined.

Question 2 options:

a) True

b) False

Question 3

The cost of capital is the rate at which the future cash flows are discounted.

Question 3 options:

a) True

b) False

Question 4

The NPV provides an estimate of how much (present) value the investment adds to the business.

Question 4 options:

a) True

b) False

Question 5

The time-value of money allows us to include time as a factor in the decision process.

Question 5 options:

a) True

b) False