Read the article “The effects of minimum wages on employment” and answer the questions below:
a) Through which channels does a binding minimum wage affect employment? Illustrate this effect with a diagram.
b) According to recent research what are the employment effects of minimum wages?
39. Frazier and Roz are partners. Frazier contributes $30,000 to the partnership, and Roz contributes $10,000. They agree that Frazier will assume 70 percent of partnership losses and that Roz will assume 30 percent. They make no agreement about how to share profits. The partnership has a profit of $60,000 in its first year. How much of the profits is Frazier entitled to receive?
QuestionFrazier and Roz are partners. Frazier contributes $30,000 to the partnership, and Roz contributes $10,000. They agree that Frazier will assume 70 percent of partnership losses and that Roz…
Fraud Examination 4e Chapter 6 page 197 Case Study 4 Using ratios and Horizontal and vertical analyses . I am having difficulty with this I can not get the formulas to work out as I thought they should could you help with this analysis.
$2,000,000
Retained earnings 1,200,000
Total shareholders’ equity $3,200,000
In the past, Fraser Valley Technologies Inc. has paid an annual cash dividend of $2.00 per share. In 2016, despite a large Retained Earnings balance, the board of directors wanted to conserve cash for expansion and did not pay a cash dividend but distributed a 10 percent stock dividend. During 2017, the company’s cash position improved, so the board declared and paid a cash dividend of $1.50 per share. Suppose you own 10,000 Fraser Valley Technologies Inc. common shares, acquired January 2, 2015. The market price was $25.00 per share before any of the above dividends.
Required
1. How did the stock dividend affect your proportionate ownership in the company? Explain.
2. What amount of cash dividends did you receive in 2015? What amount of cash dividends did you receive in 2017? Would you expect the dividend per share to remain unchanged between 2015 and 2017?
3. Immediately after the stock dividend was distributed, the market value of Fraser Valley Technologies Inc. shares decreased from $25.00 per share to $22.72 per share. Does this represent a loss to you? Explain.
4. Suppose Fraser Valley Technologies Inc. announces at the time of the stock dividend that the company will continue to pay the annual $2.00 cash dividend per share, even after the stock dividend. Would you expect the market price of the shares to decrease in 2016 to $22.72 per share as in Requirement 3 above? Explain
Franklin Roosevelt is famous for his fireside chats. If you were going to give a fireside chat about Roosevelt’s presidency, what are some of the things you would say? Choose five different things you could say about FDR and write a brief essay including each
Franklin Corporation was considering adding additional production equipment to meet the growing demand for its product. Their financial analyst, Bill, was asked to do a capital expenditure analysis on the proposed production equipment acquisition. Bill was also asked to update the company’s current WACC calculation.
The production equipment could be purchased for $12,000. The shipping cost was an additional $500. Installing the equipment would cost $1,500.
The equipment was expected to last seven years. It would be fully depreciated to zero for tax purposes on a straight line basis over the seven year useful life. Afterwards, it was expected that it could be sold for scrap for $800.
The equipment would be purchased and installed in January of 2019. Based on its production capacity, it was expected to produce 1,000 products per year that could all be sold for $10 each. The products would cost $5 each to produce them.
Additional incremental SG&A expenses were estimated to be $800 in the first year and thereafter increase by the inflation rate (see below). Also, an accountant informed Bill that if the production equipment was acquired and used, an additional $500 a year of existing fixed corporate SG&A expenses would be allocated to the production department.
Future inflation was expected to be 1% per year. The corporate income tax rate was 30%. The production and sale of the additional products was expected to create net working capital equal to 15% of the additional sales.
The company did not have a targeted capital structure. The book value of its equity was $500,000. It had $800,000 in long term debt, $200,000 in short term debt and $400,000 in accounts payable. The company had outstanding 100,000 shares of stock that were trading at $10 a share. The company’s beta was 1.1. The market value of the company’s debt equaled its book value.
Franklin’s long term debt had a current yield to maturity of 8%. The current interest rate on Franklin’s short term debt was 6%. U.S. long term treasury bonds were currently yielding 3%. Checking some financial data sources, Bill found that the historical annual return on stocks had exceeded the risk free returns by 4%.
Your Assignment:
Calculate the WACC for the Franklin Corporation. Show each step of your calculation. For the debt weight calculation, use the recommended approach of including short term debt as part of the debt weight.
Do a capital expenditure analysis of the proposed project. You will need to develop your own Excel spreadsheet to perform this analysis.
Frankfort-Nachmias & Leon-Guerrero (2018) say “information presented graphically may seem more accessible than the same information presented in frequency distributions or in other tabular forms” (p. 39). In your experience with reading and interpreting research studies, do you find this to be true?
Include your own experience as well as two citations that align with or contradict your comments as sourced from peer-reviewed academic journals, industry publications, books, and/or other sources. Cite your sources using APA formatting.
Frederick & Co. expects its EBIT to be $92,000 every year forever. The firm can borrow at 9%. Frederick currently has no debt, and its cost of equity is 15%. If the tax rate is 35%, what is the value of the firm? What will the value be if the company borrows $60,000 and uses the proceeds to repurchase shares?
Question:Frederick & Co. expects its EBIT to be $92,000 every year forever. The firm can borrow at 9%.Frederick currently has no debt, and its cost of equity is 15%. If the tax rate is 35%,…
Freddie and Jason have just opened the Texas Toothpick,a chain-saw sharpening and repair service located onElm Street. The Texas Toothpick promises same-weekrepair service. Freddie and Jason are concerned that aprojected dramatic increase in demand as the end ofOctober nears will cause service to deteriorate. Freddieand Jason have had difficulty attracting employees, sothey are the only workers available to complete the work.Safety considerations require that they each work nomore than 40 hours per week. The first chain-saw sharpeningand repair required 7 hours of work, and an 80 percentlearning curve is anticipated.Cumulative Units8273764a. How many total hours are required to complete 64chain saws?b. How many hours of work are required for the weekending on Friday the 13th?c. Will Freddie and Jason be able to keep their sameweekservice promise during their busiest week justbefore Halloween?
Units124816321 Cumulative units TimeTime needed17735.611.274.4817.92153.58428.672312.8672 45.875263 2.29376 73.4003264 1.835008 1.835008 Always a multiple of 2 Step 1:Step…
Fred took his friend, Mary, out to dinner on her birthday. While driving Mary home, Fred became ill and asked Mary to drive. While driving Fred’s car, Mary negligently injured another motorist when she failed to top at a red light.
Fred has an auto insurance policy with a liability insurance limit of $250,000 per person for bodily injury liability. Mary has a similar auto insurance policy with a liability limit of $100,000 per person.
1) If a court awards a liability judgment of $100,000 against Mary, how much, if any, will each insurer pay? Explain your answer.
2) If the liability judgment is $300,000, how much, if any, will each insurer pay? Explain your answer.
3) Assume that Fred cannot afford to pay the premium and lets his auto insurance policy lapse. At the time of the accident, he is uninsured. If the liability judgment against Mary is $100,000, how much, if any, will Mary’s insurer pay? Explain your answer.
Hi there! Click one of our representatives below and we will get back to you as soon as possible.