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Managerial Accounting




10 questions.Examine the functions and operations of investment banks in theU.S. economy by answering each of the following questions;Directions: Include a copy of the question with each of your answers.For the problem-solving questions,As a guideline, answer each essay question within 10 or more typed lines. If you use one or more sources of information in preparing any answer, provide an APA-style reference, and cite a reference wherever it is used.;1.Examine the functions and operations of investment banks in the U.S. economy by answering each of the following questions;(a) Describe two financial services provided by investment banks.;(b) Identify two types of securities that investment bank syndicates sell high, globally. (c) Does it pay to search for the best available investment bank or should a firm stay loyal to a given investment bank? Explain? (d) Could the U.S. government reduce its regulatory constraints on investment banks in a way that that would help firms and the economy? Explain.;2.Explain how it could help a firm to: (a) buy back some of its common stock, (b) increase its use of internal financing relative to external financing, (c) replace some equity financing with debt financing, (d) take a public firm private, and (e) pay down some of the firm's debt?;3.Calculate the break-even point (Q), for a firm whose: (a) total fixed cost (TFC) = $100,000, product price per unit of output (P) = $8.00, and average variable cost (AVC) = $4.00. (b) TFC = $600,000, P = $20,000, and AVC = $10,000.;4.How much will a 15% increase in sales increase a firm's net operating income (NOI) and increase its net income (NI), if;(a) its degree of operating leverage (DOL) = 3.0, and its degree of financial leverage (DFL) = 4.0?;(b) its DOL = 2.0 and DFL = 2.5?;5.(a) How do business managers determine that acquiring a given working capital asset would help their company financially?;(b) Identify a working capital asset that is particularly time consuming to manage, and explain why. (c) Would a current ratio < 1 for a company help its managers identify a financial management problem?Explain.;6.Explain what financial problems, if any, may be created by each of the following company practices: (a) The company doesn?t offer credit to its customers or accept credit card payments for its retail sales. (b) The company has a high percentage of bad debts on its accounts receivable.(c) The company is late in paying some of its suppliers. (d) Many customers are complaining about substantial product quality defects. (e) The company has a substantial backlog of orders.;7.Describe a business practice that would help a company manage each of the following financial risks: (a) interest rate risk, (b) liquidity risk, and (c) credit risk.;8.(a) Describe three potential causes of errors in preparing projected (i.e., pro forma) financial statements for a company for the next three years. (b) Describe two unethical practices of some financial managers in preparing financial statements that could hurt them and their company.;9.(a) Explain why financial planning is an important part of business planning. (b) Describe one way that financial ratio analysis of projected financial statements could be efficiently used by managers for financial planning.;10. Use the following data from a firm's pro forma (i.e., projected or forecasted) financial statements to calculate the following profitability ratios for the firm, assuming that all stocks are common stocks: (a) net profit margin, (b) return on total assets, (c) return on equity, (d) price-earnings ratio.;Sales$ 500 million;Net income30 million;Total Assets1000 million;Stockholders' Equity750 million;Number of Common Stock Shares10 million;Price per share of common stock $75.00


Paper#76078 | Written in 18-Jul-2015

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