Question 1: Explain matching principle with example. Write your answer in 50-70 words.
Question 2: Identify the debit and credit entries in the following transactions.
(a) Bought a machine on credit from A, cost $8,000.
(b) Bought goods on credit from B, cost $500.
(c) Sold goods on credit to C, value $1,200.
(d) Paid D (a credit supplier) $300.
(e) Collected $180 from E, a credit customer.
(f) Paid wages $4,000.
(g) Received rent bill of $700 from landlord G.
(h) Paid rent of $700 to landlord G.
(i) Paid insurance premium $90.
(f) Received a credit note for $450 from supplier, H (k) Sent out a credit note for $200 to customer, I
Question 3: Explain your understanding of translation risk and transaction risk. Write your answer in 100-150 words.
Question 4: Calculate how much $ exporters would receive or how much $ importers would pay, ignoring the bank's commission, in each of the following situations, if they were to exchange currency and Australian $ at the spot rate.
a) An Australian exporter receives a payment from a Danish customer of 150,000 kroner.
b) An Australian importer buys goods from a Japanese supplier and pays 1 million yen. Spot rates are as follows.
Bank sells (offer) Bank buys (bid)
Danish Kr/$ 9.4340 9.5380
Japan Y/$ 203.650 205.781
Question 5: Define Cost of capital in your own words. Write your answer in 50-100 words.
Question 6: What is risk free rate of return? Give example. Write your answer in 50-100 words.
Question 7: Explain the concept of premium for business risk in 50-100 words.
Question 8: Explain the concept of Premium for financial risk in 50-100 words.
Question 9: Explain the relation between cost of capital and risk in 50-100 words.
Question 10: Identify any four (4) internal and external factors that affect working capital management of a company.
Question 11: Explain the purpose of capital structure analysis in 50-100 words.
Question 12: Define market capitalization, net asset method of share valuation and income-based valuation bases. Write your answer in 100-150 words.
Question 13: Furry has in issue 12% bonds with par value $100,000 and redemption value $110,000, with interest payable quarterly. The cost of debt on the bonds is 8% annually and 2% quarterly. The bonds are redeemable on 30 June 20X4 and it is now 31 December 20X0.
Calculate the market value of the bonds.
Question 14: What differences would there be in working capital policies for a manufacturing company and a food retailer? Write your answer in 50-100 words.
Question 15: Fynlain the concept of over trading and its symptoms. Write your answer in 250-300 words.
Project task:
This assessment task will be divided into three parts.
Each part will have a different case study scenario. Student is required to complete a set of activities for each part.
Part A: Case study scenario:
BHP ltd is an Australian registered multinational company with subsidiaries in 33 countries in Europe, Asia and Africa and US. The subsidiaries have traditionally been allowed a large amount of autonomy, but BHP ltd is now proposing to centralize most of the group treasury management operations for cost efficiency, and improvisation of latent capacity and explore new application and reduce risk.
Required:
Acting as a consultant to BHP ltd prepare a Report suitable for distribution from the group finance director to the senior management of each of the subsidiaries explaining:
(a) The potential benefits of treasury centralization; and
(b) How the company proposes to minimise any potential problems for the subsidiaries that might arise because of treasury centralization?
Word limit to complete the report is 500-600 words.
Part B:
It is now August 2018. In 2020, the current management team of Toyota, a manufacturer of car and motorcycle parts, bought the company from its conglomerate parent company in a management buyout deal. Six years on, the managers are considering the possibility of obtaining a listing for the company's shares on the stock market. The following information is available.
Required:
(a) Evaluate the financial state and performance of Toyota by comparing it with that of its industry sector.
(b) Discuss the probable reasons why the management of Toyota is considering a Stock Exchange listing.
(c) Discuss changes in financial policy which the company would be advised to adopt once it has been floated on the Stock Exchange.
Part C:
Penny manufactures a single product, the Darcy. Budgeted results and actual results for May are as follows.
In this example, the variances are meaningless for the purposes of control. All costs were higher than budgeted but the volume of output was also higher; it is to be expected that actual variable costs would be greater those included in the fixed budget. However, it is not possible to tell how much of the increase is due to poor cost control and how much is due to the increase in activity.
Similarly, it is not possible to tell how much of the increase in sales revenue is due to the increase in activity. Some of the difference may be due to a difference between budgeted and actual selling price but we are unable to tell from the analysis above.
For control purposes we need to know the answers to questions such as the following.
a. Were actual costs higher than they should have been to produce and sell 8,200 Darcy's? (300-400 words)
b. Was actual revenue satisfactory from the sale of 8,200 Darcy's? (300-400 words)
Instead of comparing actual results with a fixed budget which is based on a different level of activity to that actually achieved, the correct approach to budgetary control is to compare actual results with a budget which has been flexed to the actual activity level achieved.
Suppose that we have the following estimates of the behaviour of Penny's costs.
(a) Direct materials and direct labor are variable costs.
(b) Production overhead is a semi-variable cost, the budgeted cost for an activity level of 10,000 units being $25,000
(C) Administration overhead is a fixed cost.
(D) Selling prices are constant at all levels of sales.
Project task:
This assessment task will be divided into four (4) parts.
Each part will have a different case study scenario. Student is required to complete a set of activities for each part.
Part I:
You have recently completed Advance diploma in accounting and recruited from John Holland Australia.
You have been asked to provide preliminary advice on whether or not John Holland should make an investment in the shares of Infra Structure Victoria, a large construction company which is leading a consortium that is proposing to build a rail tunnel between Melbourne city and regional centers in Victoria. The tunnel is scheduled to open in 2015.
Projected cash flows of the tunnel project:
All projections exclude inflation.
The current domestic nominal risk-free rate is 6% whilst the real rate is approximately 4%. The market risk premium for the project has been estimated at 7%.
Required:
Undertake an analysis of the proposed tunnel project and advise on whether or not John Holland should invest in shares of Infra Structure Victoria. Relevant calculations must be shown.
State clearly all assumptions that you make. In this question only, reasoned assumptions regarding a discount rate are encouraged.
Part II:
Let us assume you are senior manager finance of BHP a large multinational company, listed on a number of major international stock markets. In recent year the company is reviewing its corporate plan and focuses on maximizing shareholder wealth as its major goal The Managing Director thinks this single goal is inappropriate and asks his co-directors for their views on giving greater emphasis to the following:
a) Cash flow generation
b) Profitability as measured by profits after tax and return on investment
c) Risk-adjusted returns to shareholders
d) Performance improvement in several areas such as concern for the environment, employees' remuneration and quality of working conditions and customer satisfaction
Required:
Provide the Managing Director with a report for presentation at the next board meeting which:
(a) Evaluates the argument that maximization of shareholder wealth should be the only true objective of a company, and
(b) Discusses the advantages and disadvantages of the MD's suggestions about alternative goals.
Part III:
Sydney water services and Melbourne Water services are two wholly owned subsidiaries of Midal waterµ You have recently qualified as an accountant and have joined the finance team of Midal water at headquarters. Your finance director is not satisfied with the performance of these two subsidiaries and has asked you to prepare a report covering the following issues
(a) The profitability of the two subsidiaries
(b) The competence of the Enterprise Activity manager to make financial decisions
(c) The consequences of having a common management information system serving both companies
The finance director has also provided you with the following background information on the two companies.
Sydney water services
The company holds a license issued by the government to be the sole supplier of drinking water to a large town in Victoria. The business necessitates a considerable investment in infrastructure assets and is therefore highly capital intensive. To comply with the license, the company has to demonstrate that it is maintaining guaranteed service standards to its customers. Sydney water services is extensively regulated requiring very detailed annual returns concerning costs, prices, profits and service delivery standards. The government enforces a price-capping regime and therefore the company has limited freedom in tariff determination - the government will normally only sanction a price increase following a demonstrable rise in costs.
Melbourne Water services
In contrast to Sydney water services, Melbourne Water services operate in a very competitive market offering a plumbing service to domestic properties. The business has the following characteristics.
(a) Rapidly changing market conditions
(b) A high rate of new entrants and business failures
(c) Occasional shortages of skilled plumbers
(d) Fluctuating profits
In addition to this background information you also have the following.
1. Summarized income statements and statements of financial position (balance sheets) for the last two years for both companies
2. Service contract costing information from Enterprise Activities
3. Notes from a meeting that you have had with the manager responsible for the profitability of the three service contracts offered by Enterprise Activities
Fixed overheads are allocated to the contracts at 150% of total direct costs.
The selling price is arrived at by adding 50% to the total costs.
Notes of meeting
(a) The manager states that his prime objective 'is to maximize the total profit that the three service contracts earn.
(b) You discover that there is currently an unavoidable shortage of labour that has resulted in the available hours being limited to 80% of those originally planned in the budget.
(c) The manager responds to the shortfall in labour hours by 'concentrating sales on our most profitable service contracts, surely this is the obvious thing to do'.
(d) The manager is provided with the fixed overhead figure (150% of direct costs) from the finance department and assumes that it remains 'fixed' irrespective of the contract volume and contract mix. This overhead arises only as a consequence of operating the service contract business.
(e) The manager would never knowingly 'supply a service contract that did not cover the total cost, otherwise the company's profits would decline'.
(f) The manager estimates the volume of contracts for budgetary purposes and provides these figures to the finance Melbourne Water services. You have compared his past estimates with the actual sales and conclude that he is very
accurate with the sales forecast - you can assume that the actual number of contracts sold for any of the three contract types will not be exceeded.
Required:
(a) Prepare a report on the comparative financial performance of Sydney water services and Melbourne Water services from the above financial statements.
Part IV: Role play -Procurement policy
Your finance director has asked you to provide a consultancy service to the newly appointed profit center manager responsible for the service contract business. Describe the advice you would give him to assist the achievement of his financial target.
Recently Midal water want to expand their business and looking for additional fund. As a part of procurement policy company wants to raise through equity rather than additional loan fund. Critically review the policy and explain the benefit of gearing in the capital structure during role play.
Assume your Assessor is a newly appointed profit center manager responsible for service business and asking your view on procurement policy of additional fund. Explain verbally your suggestion to him.
Our Debit and Credit Entries Assignment Help service encompass a well-experienced panel of professional tutors, who always assist you in the most possible manner. By availing our online service, you will not just secure your dream grades as well gain comprehensive knowledge.
Tags: Debit and Credit Entries Assignment Help, Debit and Credit Entries Homework Help, Debit and Credit Entries Coursework, Debit and Credit Entries Solved Assignments, Cost of Capital Assignment Help, Cost of Capital Homework Help, Cost of Capital Coursework, Cost of Capital Solved Assignments
Attachment:- Debit and credit entries.rar