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HRM 594 Final Exam Set 2 | DeVry Online Help

HRM 594 Final Exam Set 2 | DeVry Online Help | DevryExams4 - DevryOnlineHelp | Scoop.it

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1. (TCO B) Discuss the 13 strategic staffing decisions one must make when developing an organizational staffing strategy. Do you believe that some of them are more important to an organization than others? Which ones? Fully explain your reasoning, providing clear examples to illustrate your position. (Points: 25)

2. (TCO E) You are the staffing manager for your organization. Fully discuss the administrative issues that you would address in the planning stage of external recruiting. Explain the importance of each issue. (Points: 30)

3. (TCO G) You are a staffing manager. Recommend the steps your organization should take to develop and implement a policy regarding employment-at-will. Explain the importance of having an employment-at-will policy, and the consequences of not having one. (Points: 30)

Page 2

1. (TCO C) As an HR leader, how would you try to get individual managers to be more aware of the legal requirements of staffing systems and to take steps to ensure that they themselves engage in legal staffing actions? (Points: 30)

2. (TCO F) You are a staffing professional. Describe how you might go about determining scores for applicants’ responses to: a. interview questions, b. letters of recommendation, and c. questions about previous work experience. (Points: 25)

3. (TCO H) You are an HR Manager for ABC Corporation. Your strategic staffing plan indicates that in the next five years, your 500 Customer Service Representatives will need specific computer skills to utilze a new technology that is planned. None of the reps currently have this skill. Other than terminating all of the employees and hiring new employees with the required skills, discuss two possible alternatives the company might consider. (Points: 30)

Page 3

1. (TCO A) Imagine an organization that has a staffing process in which vacancies are filed (a) on a lottery basis from among job applicants, or (b) on a first-come, first-hired basis among job applicants. Predict the potential problems associated with these scenarios. (Points: 30)

2. (TCO D) You are the HR Manager of your organization. Your task is to perform job analysis on all of the jobs within your organization. What are the advantages and disadvantages to using multiple methods of job analysis for a particular job? Multiple sources? (Points: 30)

3. (TCO I) Which of the costs and benefits of voluntary turnover are most likely to vary according to the type of job? Give specific examples. (Points: 20)

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HRM 590 Final Exam Set 2 | DeVry Online Help

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1. (TCO A) Discuss two major trends that are currently affecting the practice of human resource management. Provide examples of how a company’s HRM practices might be affected by each trend. (Points: 30)

2. (TCO B) To be a strategic business contributor, human resources must enhance organizational performance, expand human capital, and be cost effective. Discuss how HRM professionals must balance the competing demands made on them. (Points: 30)

3. (TCO C) Explain the most significant impact of a union on human resource management. (Points: 30)

4. (TCO D) In developing human resource strategies, businesses face several important challenges. Identify and describe four of these challenges. Link these challenges back to the HRM department’s strategy plan. (Points: 30)

5. (TCO E) While layoffs may seem prevalent in our work environment today, many companies still face the challenge of retaining top performers and the skills needed to complete the job. Explain how you would create a proactive retention program for a company. Describe the steps you would take and substantiate each step. (Points: 30)

6. (TCO F) Substantiate the value of employee performance evaluations to the business and the employee. Describe the factors/components you would include in a performance management program and validate those items. (Points: 30)

7. (TCO G) Pay for performance plans vary in design. Some are designed to reward individuals as well as team results. Describe both types of pay plans. Evaluate the value of both plans as it relates to the organization/business. (Points: 30)

8. (TCO H) Explain how human resource technology can improve efficiency and effectiveness of HRM functions. How, specifically, can technology support the business? Provide an example. (Points: 40)

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GM 588 Final Exam | DeVry Online Help

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1. (TCO E) Suggested reasons why many customer satisfaction efforts fail include all of the following EXCEPT:

2. (TCO D) The Six-Sigma problem solving approach contains the phases of:

3. (TCO C) Terms such as “kanban”, “single minute exchange of dies”, and “visual controls” are most closely associated with:

4. (TCO C) Poka-yoke focuses on two aspects:

5. (TCO B) _____ measures are generally tracked by senior leadership to gauge overall organizational performance.

6. (TCO I) The cost of purchasing copies of a textbook on quality for employees as part of their training program in process improvement methods is considered:

7. (TCO A) Which of the following is NOT a characteristic of a Six Sigma project?

8. (TCO B) A set of financial, market, operational, and employee performance measures for management review and use is an example of:

9. (TCO D) The Baldrige Award criteria, as a tool for self-assessment:

10. (TCO H) Focusing on how to maintain improvements occurs in which DMAIC phase?

1. (TCO B) Explain why it is difficult to obtain a single, universal definition of quality. Be specific in your response.

2. (TCO I) What criterion is used to classify a failure cost as “internal” versus “external”? Give three examples of an internal failure cost and three examples of an external failure cost.

3. (TCO G) Discuss the three major reasons why companies adopt total quality. Also, discuss the initial key steps are involved in the adoption process.

4. (TCO F) Explain in detail why change is necessary in organizations. Describe the effects that change can have on quality management with respect to employee commitment and quality levels.

5. (TCO H) Describe the six basic steps required to build the House of Quality. Describe, in general, where in the House are customer and technical requirements located. Also explain why it is important that each area of the House is “linked” with the others

6. (TCO C) Some have argued the Six Sigma programs are merely repackaged versions of older quality improvement programs that originally accompanied TQM initiatives in the 1980s. Present arguments that both support and refute this view. Make sure you link your discussion with examples of the older quality improvement programs (i.e. Deming, Juran, etc)

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FIN 515 Final Exam (Set 2) | DeVry Online Help

FIN 515 Final Exam (Set 2) | DeVry Online Help | DevryExams4 - DevryOnlineHelp | Scoop.it

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1. (TCO A) Which of the following does NOT always increase a company’s market value?

2. (TCO F) Which of the following statements is correct?

3. (TCO D) The Ramirez Company’s last dividend was $1.75. Its dividend growth rate is expected to be constant at 25% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price?

4. (TCO G) The ABC Corporation’s budgeted monthly sales are $4,000. In the first month, 40% of its customers pay and take the 3% discount.
The remaining 60% pay in the month following the sale and don’t receive a discount.
ABC’s bad debts are very small and are excluded from this analysis.
Purchases for next month’s sales are constant each month at $2,000. Other payments for wages, rent, and taxes are constant at $500 per month.
Construct a single month’s cash budget with the information given. What is the average cash gain or (loss) during a typical month for the ABC Corporation?

5. (TCO G) Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm’s additional funds needed (AFN). The firm is operating at full capacity. Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm’s investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions

1. (TCO H) Your consulting firm was recently hired to improve the performance of Shin-Soenen Inc, which is highly profitable but has been experiencing cash shortages due to its high growth rate. As one part of your analysis, you want to determine the firm’s cash conversion cycle. Using the following information and a 365-day year, what is the firm’s present cash conversion cycle?

2. (TCO C) Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15, net 50. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its nonfree trade credit? (Assume a 365-day year.)

3. (TCO E) Daves Inc. recently hired you as a consultant to estimate the company’s WACC. You have obtained the following information. (1) The firm’s noncallable bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,050.00. (2) The company’s tax rate is 40%. (3) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock’s beta is 1.20. (4) The target capital structure consists of 35% debt and the balance is common equity. The firm uses the CAPM to estimate the cost of common stock, and it does not expect to issue any new shares. What is its WACC?

4. (TCO B) A company forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13%, and the FCFs are expected to continue growing at a 5% rate after Year 3. Assuming that the ROIC is expected to remain constant in Year 3 and beyond, what is the Year 0 value of operations, in millions?

5. (TCO G) Based on the corporate valuation model, the value of a company’s operations is $900 million. Its balance sheet shows $70 million in accounts receivable, $50 million in inventory, $30 million in short-term investments that are unrelated to operations, $20 million in accounts payable, , $140 million in retained earnings, and $280 million in total common equity. If the company has 25 million shares of stock outstanding, what is the best estimate of the stocks price per share?

 
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ETHC 445 Final Exam | DeVry Online Help

ETHC 445 Final Exam | DeVry Online Help | DevryExams4 - DevryOnlineHelp | Scoop.it

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1. (TCOs 2, 4, 5, 6) The idea that the assisted suicide of terminally ill patients should be allowed simply at the patient’s direction reflects what type of ethics?

2. (TCOs 1, 2, 7) What is the moral ideal of temperance?

3. (TCOs 1, 2) One of the common errors in Ethics is that of the hasty conclusions. Hasty conclusions consist of what?

4. (TCO 2)  Prescriptive language is commonly used in ethics for what reason?

5. (TCOs 7, 8)  Ethical Egoism proposes that all decisions should be made to promote what?

6. (TCOs 2, 4, 9) Free people are motivated toward forming social structures according to a social contract in order to overcome what problem identified by Thomas Hobbes?

7. (TCOs 3, 6) Agricultural biofuels are not properly a renewable source of energy in the environmental ethics debate. Which of the following also is not a renewable source of energy?

8. (TCOs 3, 6, 7)  The notion that the only thing good without qualification is a good will is attributed to whom?

9. (TCOs 8, 9) Which ethical concept is organized and directed toward following the greatest happiness principle?

10. (TCOs 3, 6, 7)  Syllogisms in formal deductive logic are called “valid” when:

11. (TCOs 1, 2) When choosing one course of action while working with a dilemma, the other courses of action are lost and become unavailable. This makes ethical choices in dilemma situations particularly what?

12. (TCOs 1, 2, 7)  What is the role of conscience as Thomas Aquinas sees it?

13. (TCOs 2, 8) The rule or principle to be applied in making decisions is an example of which kind of ethical discovery process?

14. (TCOs 1, 2, 5)  The Social Contract theorist whose troubled childhood was most clearly reflected in his theories was who?

15. (TCOs 3, 6, 7)  Kant’s concern that people choose to observe universal laws as their duty is expressed through what actions?

16. (TCOs 2, 7, 8)  Aristotle’s Ethics of Virtue have found modern application for business and industry through what practice?

17. (TCOs 2, 8)  Professional codes of conduct serve what function for business and industry?

18. (TCOs 2, 7)  Aristotle’s Ethical Doctrine of the Mean measured personal virtues on a scale that included the virtue itself, the excess of it, and the deficiency of it.

If the virtue is COURAGE and the deficiency is COWARDICE, what is the excess?

19. (TCOs 8, 9)  In personal or organizational conflict, what benefits accrue to all parties when a leader or consultant employees one of the ethical conflict resolution models of Week 6?

20. (TCOs 1, 2)  The Latin term a priori describes the origin of knowledge developed rationally, and the term a posteriori describes knowledge developed through observation and experience. What is an example of ethics is best described as discovered in an a postiori manner?

1. (TCOs 1, 2, 3, 7) In support of TCO #7 and in the Week 7 discussions, you developed and placed into the threaded discussions your personalized ethics statement of what has become important to you in the practice of ethics as you have practiced ethics during the course. Your first task in this question is to briefly present that personalized statement in just a few sentences before continuing with the question. Much of the rest of the exam will involve your working with that personalized statement through brief applications and cases.

Use your ethical philosophy to solve the following ethical situation. Explain how your philosophy helped you make your decision.

Should citizens have an ethical obligation to serve their country when it is at war? Under what circumstances, if any, is it ethical for a person to refuse to serve?

A significant number of people believe war is always wrong, and that no circumstances justify one nation’s taking up arms against another.  Is this view ethically sound? How about realistically?  Please state which side you agree with, and why. Explain and defend your position using your ethical position statement.

In answering, be sure to look at both sides of war: that is, a country defending itself against aggression and of a strong country coming to the aid of a weaker country that has been attacked unjustly.  Then, explain how your ethical philosophy affected how you answered this problem. (Points : 30)

2. (TCOs 1, 2, 7) Analyze the following ethical situation using YOUR ethical philosophy. Read the situation and then in your answer, explain why this is an ethical situation, what the “issues” are, and how an “ethical” person would resolve them.  Explain how YOUR ethical philosophy has helped you read a conclusion about how to resolve or analyze this situation.

Employees’ worth to their employers may diminish before they are eligible for retirement.  In such cases, the employer is faced with the dilemma of choosing between retaining an old and trusted yet unproductive worker for 5 or 10 more years, or firing that worker and jeopardizing his or her retirement benefits.

1.  Should an employer have an ethical obligation to keep such unproductive, but loyal employees?  What if the employee had been a problem his or her entire career? Are there certain circumstances where your answer to these questions would be different?

2.  What is the duty of an unproductive employee to his or her employer? Is there an ethical obligation to retire when productivity begins to wane? If a person is simply “coasting” for his or her last few years, is that person “unethical?” Be sure to explain your answer.

3. (TCOs 1, 7, 9) How do you feel St. Thomas Aquinas would have solved the above ethical situation differently or the same as you did using your philosophy? Please explain the reasons for the similarities or differences.

4. (TCOs 1, 2, 4, 9) A first-term junior senator has placed a bill before the Senate that promises to correct tax inequities that affect thousands of workers.  However, the bill is being held up in committee.  The senior senator who serves as Sub-Committee Chairperson is responsible.  The senator, however, has learned of a secret scandal in the Chairperson’s personal life.  The junior senator visits the Chairperson and tells him that unless the bill is released from committee, he will divulge the scandal to the press. The Chairperson then releases the bill from committee and it is passed—and becomes law.

Identify and tell what ethical philosophy the senior and junior senators are using, if any.

Now, use your ethical philosophy to analyze the situation.  Explain how, using your philosophy, you would have solved this situation either the same way as the characters in the situation did, or differently. Why?

5. (TCOs 5, 6) You work for a grocery store and a new manager is hired to oversee your department. He comes into your department (the butcher shop) and explains to you that for the past 6 months, your department has been losing money for the store because of the waste and spoilage going on from having to discard unsold meat and poultry. He tells you that from now on, he wants you to package ground meat in smaller, more compact packages, with older meat on the bottom of the package (so it is not visible to the customer) and the fresher meat on the top, where it is visible to the customers.  In this way, you can move more of the older meat and still receive the top dollar for it. As he leaves the department where you were having the discussion, he turns and says, “And by the way, one more month of losses like we had last month from this department, and you can kiss your job goodbye.”

Will you repackage the meat in the way he requested?

Why or why not? Explain what ethical analysis you used to come to this conclusion

6. (TCOs 6, 8) Analyze your answer above using the Front Page of the Newspaper ethical dilemma resolution model. Show your steps

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HRM 594 Final Exam Set 1 | DeVry Online Help

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(TCO B) Review the 13 strategic staffing decisions that organizations must make when developing a staffing strategy. Provide an example of an organizational business strategy, and explain how each decision might be impacted by the given business goals. (Points: 25)

(TCO E) You are the staffing manager for your organization. Fully discuss the administrative issues that you would address in the planning stage of external recruiting. Explain the importance of each issue. (Points: 30)

(TCO G) If you were the HR staffing manager for an organization, what guidelines might you recommend regarding oral and written communication with the job applicants by members of the organization? (Points: 30)

(TCO C) As an HR leader, how would you try to get individual managers to be more aware of the legal requirements of staffing systems and to take steps to ensure that they themselves engage in legal staffing actions? (Points: 30)

(TCO F) Assume you gave a general ability test, measuring both verbal and computational skills, to a group of applicants for a specific job. Also assume that because of severe hiring pressures, you hired all of the applicants, regardless of their test scores. How would you investigate the criterion-related validity of the test? (Points: 25)

(TCO H) There are numerous negative organizational consequences to firing employees, including the discomfort of the supervisor who delivers the termination information, conflict or sabotage from the departing employee, and the potential for a lawsuit. In response, many supervisors provide problem employees unpleasant work tasks, reduced working hours, or otherwise negatively modify their jobs in hopes that the problem employees will simply quit. What are the ethical issues raised by this strategy? (Points: 30)

(TCO A) Imagine an organization that has a staffing process in which vacancies are filed (a) on a lottery basis from among job applicants, or (b) on a first-come, first-hired basis among job applicants. Predict the potential problems associated with these scenarios. (Points: 30)

(TCO D) It has been suggested that “ethical conduct” be formally incorporated as a general competency requirement for any job within the organization. Debate the pros and cons of this suggestion. (Points: 30)

(TCO I) Consider a circumstance where your organization is doing exit interviews and has promised confidentiality to all who respond. Your supervisor has asked you to give the name of each respondent so she can assess the information in conjunction with the person’s supervisor. What obligation do corporate HR employees have to keep information confidential in such circumstances? (Points: 20)

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HRM 590 Final Exam Set 1 | DeVry Online Help

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1. (TCO A) Many people still believe that companies care little about human resource management compared to other revenue-generating departments. Explain why companies have this perception. Describe how you would convince the company’s leadership of the value of HRM. (Points: 30)

2. (TCO B) If an employer asked you to review an employment decision to determine whether discrimination had occurred, identify the factors you would consider in that decision and describe how you would evaluate them. (Points: 30)

3. (TCO C) Many believe that good pay and good management result in union avoidance. Describe the policies and practices companies should develop to avoid unionizing. Explain how these practices might be less costly than unionized labor. (Points: 30)

4. (TCO D) In developing human resource strategies, businesses face several important challenges. Identify and describe four of these challenges. Link these challenges back to the HRM department’s strategy plan. (Points: 30)

5. (TCO E) Describe the advantages and disadvantages of layoffs. Explain the pros and cons to using seniority as a layoff criteria. (Points: 30)

6. (TCO F) Substantiate the value of employee performance evaluations to the business and the employee. Describe the factors/components you would include in a performance management program and validate those items. (Points: 30)

1. (TCO G) From a general human resource standpoint, describe what you would include in a benefits strategy. Describe the value of a benefits strategy for employees and the business. (Points : 30)

2. (TCO H) Explain how human resource technology can improve efficiency and effectiveness of HRM functions. How, specifically, can technology support the business? Provide an example. (Points: 40)

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FIN 515 Final Exam (Set 3)

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1. (TCO A) Which of the following does NOT always increase a company’s market value?

2. (TCO F) Which of the following statements is correct?

3. (TCO D) Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 25% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company’s last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?

4. (TCO G) The ABC Corporation’s budgeted monthly sales are $4,000. In the first month, 40% of its customers pay and take the 3% discount.
The remaining 60% pay in the month following the sale and don’t receive a discount.
ABC’s bad debts are very small and are excluded from this analysis.
Purchases for next month’s sales are constant each month at $2,000. Other payments for wages, rent, and taxes are constant at $500 per month.
Construct a single month’s cash budget with the information given. What is the average cash gain or (loss) during a typical month for the ABC Corporation?

5. (TCO G) Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm’s additional funds needed (AFN). The firm is operating at full capacity. Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm’s investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions.

1. (TCO H) The Dewey Corporation has the following data, in thousands. Assuming a 365-day year, what is the firm’s cash conversion cycle?

2. (TCO C) Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15, net 50. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its nonfree trade credit? (Assume a 365-day year.)

3. (TCO E) You were hired as a consultant to the Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of common from retained earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new common stock. What is Quigley’s WACC?

4. (TCO B) Leak Inc. forecasts the free cash flows (in millions) shown below. If the weighted average cost of capital is 11% and FCF is expected to grow at a rate of 5% after Year 2, what is the Year 0 value of operations, in millions? Assume that the ROIC is expected to remain constant in Year 2 and beyond (and do not make any half-year adjustments).

5. (TCO G) Based on the corporate valuation model, the value of a company’s operations is $1,200 million. The company’s balance sheet shows $80 million in accounts receivable, $60 million in inventory, and $100 million in short-term investments that are unrelated to operations. The balance sheet also shows $90 million in accounts payable, $120 million in notes payable, $300 million in long-term debt, $50 million in preferred stock, $180 million in retained earnings, and $800 million in total common equity. If the company has 30 million shares of stock outstanding, what is the best estimate of the stock’s price per share?

6. Sapp Trucking’s balance sheet shows a total of noncallable $45 million long-term debt with a coupon rate of 7.00% and a yield to maturity of 6.00%.  This debt currently has a market value of $50 million.  The balance sheet also shows that the company has 10 million shares of common stock, and the book value of the common equity (common stock plus retained earnings) is $65 million.  The current stock price is $22.50 per share; stockholders’ required return, rs, is 14.00%; and the firm’s tax rate is 40%.  The CFO thinks the WACC should be based on market value weights, but the president thinks book weights are more appropriate.  What is the difference between these two WACCs?

7. based on the corporate valuation model, bernile Inc’s value of operation is $750 million. Its balance sheet shows $50 million of short-term investments that are unrelated to operations, $100 million of accounts payable, $100 million of notes payable, $200 million of long term debt, $40 million of common stock (par plus pain -in – capital), and $160 million of retained earnings. What is the best estimate for the firm’s value of equity, in millions

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FIN 515 Final Exam (Set 1) | DeVry Online Help

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1. (TCO A) Which of the following does NOT always increase a company’s market value?

2. (TCO F) Which of the following statements is correct?

3. (TCO D) Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 25% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company’s last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?

4. (TCO G) Singal Inc. is preparing its cash budget. It expects to have sales of $30,000 in January, $35,000 in February, and $35,000 in March. If 20% of sales are for cash, 40% are credit sales paid in the month after the sale, and another 40% are credit sales paid 2 months after the sale, what are the expected cash receipts for March?

1. (TCO H) Zervos Inc. had the following data for 2008 (in millions). The new CFO believes (a) that an improved inventory management system could lower the average inventory by $4,000, (b) that improvements in the credit department could reduce receivables by $2,000, and (c) that the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2,000. Furthermore, she thinks that these changes would not affect either sales or the costs of goods sold. If these changes were made, by how many days would the cash conversion cycle be lowered?

2. (TCO C) Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15, net 50. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its nonfree trade credit? (Assume a 365-day year.)

3. (TCO E) You were hired as a consultant to the Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of common from retained earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new common stock. What is Quigley’s WACC?

4. (TCO B) A company forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13%, and the FCFs are expected to continue growing at a 5% rate after Year 3. Assuming that the ROIC is expected to remain constant in Year 3 and beyond, what is the Year 0 value of operations, in millions?

5. (TCO G) Based on the corporate valuation model, Hunsader’s value of operations is $300 million. The balance sheet shows $20 million of short-term investments that are unrelated to operations, $50 million of accounts payable, $90 million of notes payable, $30 million of long-term debt, $40 million of preferred stock, and $100 million of common equity. The company has 10 million shares of stock outstanding. What is the best estimate of the stock’s price per share?

6. TCO G) Clayton Industries is planning its operations for next year, and Ronnie Clayton, the CEO, wants you to forecast the firm’s additional funds needed (AFN). The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Dollars are in millions.

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1. (TCO A) Suppose you are hired to manage a small manufacturing facility that produces Widgets.

(a.) (15 points) You know from data collected on the Widget Market that market demand and market supply have both increased recently. As manager of the facility, what decisions should you make regarding production levels and pricing for your Widget facility?

Remember that supply and demand are about the market supply and market demand, which is bigger than your own company. You are being given data on supply and demand for the whole market and are being asked what effect that has on you as a small part of that market.

(b.) (15 points) Now, suppose that following the supply and demand changes in (a), a substitute good goes up in price, and your costs of production increase. What new decisions will you make regarding production levels and pricing for your Widget facility?

2. (TCO B) Here is some data on the demand for marshmallows:

Price Quantity
$10 100
$ 8 300
$ 6 700
$ 4 1300
$ 2 2200

(a.) (15 points) Is demand elastic or inelastic in the $6-$8 price range? How do you know?

(b.) (15 points) If the table represents the demand faced by a monopoly firm, then what is that firm’s marginal revenue as it increases output from 1300 units to 2200 units? Show all work. (Be careful here!)

3. (TCO C) You have been hired to manage a small manufacturing facility whose cost and production data are given in the table below.
Total Total
Workers   Labor Cost  Output        Revenue
1                     $500     100                 $700
2                     1000     280                1150
3                     1500     440               1440
4                     2000     540               1570
5                     2500    600                1670
6                     3000    630                1710
7                    3500     640               1730

(a.) (6 points) What is the marginal product of the second worker?

(b.) (6 points) What is the marginal revenue product of the fourth worker?

(c.) (6 points) What is the marginal cost of the first worker?

4. (TCO C) Answer the next questions on the basis of the following cost data for a firm in pure competition:

OUTPUT —— TFC ———- TVC
0                   $100.00         0.00
1                   100.00           70.00
2                   100.00           120.00
3                100.00          150.00
4                100.00          200.00
5                100.00           270.00
6                100.00           360.00

(a.) (15 points) Refer to the above data. If the product price is $45 at its optimal output, will the firm realize an economic profit, break even, or incur an economic loss? How much will the profit or loss be? Show all calculations.

(b.) (15 points) Refer to the above data. If the product price is $75 at its optimal output, will the firm realize an economic profit, break even, or incur an economic loss? How much will the profit or loss be? Show all calculations.

5. (TCO D) A software producer has fixed costs of $18,000 per month and her Total Variable Costs (TVC) as a function of output Q are given below:

Q TVC Price
1,000 $15,000 $25
2,000 20,000 24
3,000 30,000 23
4,000 50,000 22
5,000 80,000 20
(a.) (15 points) If software can only be produced in the quantities above, what should be the production level if the producer operates in a monopolistic competitive market where the price of software at each possible quantity is also listed above? Why? (Show all work).

(b.) (15 points) What should be the production level if fixed costs rose to $48,000 per month? Explain

6. (TCO F)

(a.) (20 points) Suppose nominal GDP in 1999 was $200 billion, and in 2001, it was $270 billion. The general price index in 1999 was 100 and in 2001 it was 150. Between 1999 and 2001, the real GDP rose by what percent?

(b.) Use the following scenario to answer questions (b1) and (b2).
In a given year in the United States, the total number of residents is 270 million, the number of residents under the age of 16 is 38 million, the number of institutionalized adults is 15 million, the number of adults who are not looking for work is 17 million, and the number of unemployed is 10 million.

(b1.) (5 points) Refer to the data in the above scenario. What is the size of the labor force in the United States for the given year?

(b2.) (5 points) Refer to the data in the above scenario. What is the unemployment rate in the United States for the given year?

7. (TCO G and H)

(a.) (15 points) Suppose your local Congress representative suggests that the federal government intervenes in the gasoline market to stop runaway price increases. Would you say that this view basically supports the Keynesian or the Monetarist school of thought? Why? What position would the opposing school of thought take on this issue? (Be brief — you can answer this in 2 or 3 brief paragraphs).

(b.) (10 points) Any change in the economy’s total expenditures would be expected to translate into a change in GDP that was larger than the initial change in spending. This phenomenon is known as the multiplier effect. Explain how the multiplier effect works.

(c.) (15 points) You are told that 90 cents out of every extra dollar pumped into the economy goes toward consumption (as opposed to saving). Estimate the GDP impact of a positive change in government spending that equals $20 billion

8. (TCO G)
(a.) (20 points) Third National Bank is fully loaned up with reserves of $20,000 and demand deposits equal to $100,000. The reserve ratio is 20%. Households deposit $5,000 in currency into the bank. How much excess reserves does the bank now have, and what is the maximum amount of new money that can be created in the banking system as a result of this deposit? Show all work.

(b.) (20 points) What is the discount rate in the banking system? Explain how the Fed manipulates this rate to achieve macroeconomic objectives

9. (TCO E and I) Let the exchange rate be defined as the number of dollars per British pound. Assume there is a decrease in U.S. interest rates relative to that of Britain.

(a.) (10 points) Would this event cause the demand for the dollar to increase or decrease relative to the demand for the pound? Why?

(b.) (10 points) Has the dollar appreciated or depreciated in value relative to the pound?

(c.) (10 points) Does this change in the value of the dollar make imports cheaper or more expensive for Americans? Are American exports cheaper or more expensive for importers of U.S. goods in Great Britain? Illustrate by showing the price of a U.S. cell phone in Britain before and after the change in the exchange rate.

 
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