Details of this Paper

ACT 5735 Winter 2014 Final Exam

Description

solution


Question

Question;Question #1 (6 points)What is the controller?s role in strategy implementation? Be sure to provide specific examples inyour answer.Question #2 (14 points)List and describe the principles of internal control we discussed in this course. As part of youranswer, provide an example of each principle.Question #3 (8 points)List and describe four actions a firm can take to accelerate the collection of cash from sales. Foreach action listed, describe the potential costs involved with the action.Question #4 (6 points)In your own words, describe the system that Lowes uses to manage its Accounts Payable.Question #5 (6 points)Using the financial statements provided on Blackboard, calculate and interpret the days tocollect ratio. Assume credit sales are 15% of total net sales.Question #6 (10 points)Using the financial statements provided on Blackboard, calculate and interpret the days to selland gross profit ratios.Question #7 (10 points)Using the financial statements provided on Blackboard, calculate and interpret the currentliabilities ratios (including cash cycle) we discussed in class.Question #8 (10 points)Using the financial statements provided on Blackboard, calculate and interpret the long-termliabilities ratios we discussed in class.Question #9 (10 points)What is a firm?s WACC? How is it calculated? How is it used?Question #10 (10 points)Consider the following potential investment, which has the same risk as the firm?s other projects:Time01234Cash Flow-$170,000$58,000$63,000$67,000$68,000The firm?s current weighted-average cost of capital is 14%.a) How much value will this investment create for the firm?b) At what discount rate will this project break even?c) Should the firm do this investment? Be sure to justify your recommendation.d) How would your analysis change if this potential investment was more risky than the firm?sother projects? Be specific.Question #11 (15 points)The following situations each describe a weakness in internal control. For each situation, explainwhy it is a weakness and then suggest a change that would improve internal control.1) The warehouse clerk is responsible for ordering merchandise when levels become low andadvising the accounting department to issue a payment to the supplier when the goods arereceived.2) The check-singing machine is stored with a supply of pre-numbered, blank checks in the lunchroom closet.3) Purchase orders can be approved by the purchasing manager, accountant, or warehousesupervisor, depending on who is least busy.4) Sales managers are responsible for granting credit to customers.5) Purchasing managers are allowed to order goods from any vendor he or she chooses

 

Paper#43806 | Written in 18-Jul-2015

Price : $45
SiteLock