Walden WMBA6681 full course 2018

assinment 1

 

To prepare for this Assignment, use the interactive Algebra Refresher media, found in this week’s Learning Resources, to help you solve the following equations:

x + 9 = 8	x + 20 = 88	12 + 15 - x = 19	-12 - 15 + x = 38	76 - 105 + x = 350
3x + 2 = 15	2x + 87 = 90	38x + 2/5 = 115	16x + 2x = 104	20x - 5x + 2 = 190
53/x = 2	17/x + 20 = 6	105/x + 2 * 3 = 500	35/x - 60 = 400	90/x + 20/10 = 300
x/20 + 20 = 40	x/15 -5 = 30	x/45 = 1/450	16 * 2 - 30/x = -90	x/30 - 15/5 = 60

By Day 7

Complete this Assignment of this week.

Submission and Grading Information

To submit your completed Assignment for review and grading, do the following:

• Please save your Assignment using the naming convention “WK1Assgn+last name+first initial.(extension)” as the name.
• Click the Week 1 Assignment Rubric to review the Grading Criteria for the Assignment.
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• Next, from the Attach File area, click on the Browse My Computer button. Find the document you saved as “WK1Assgn+last name+first initial.(extension)” and click Open.
• If applicable: From the Plagiarism Tools area, click the checkbox for I agree to submit my paper(s) to the Global Reference Database.
• Click on the Submit button to complete your submission.

 

WEEK 2

ASSIGNMENT 1

 

Think about a company that is about to launch a new product. What are some of the key factors it must address to account for how the market will respond to its product? How can it adjust and learn after the product is launched so that it can be more successful in the future?

Accounting for the unpredictability of the market is a crucial skill for managers, and cost-volume-profit analysis allows for some insight into that unpredictability. Factoring in the impact of cost is crucial for managers to understand how to make the best decisions. When managers make decisions, they have to consider the potential financial and business outcomes based on the different types of costs, such as opportunity cost, fixed cost, marginal cost, and average cost.

To prepare for this Assignment, examine cost concepts as a decision-making tool for managers.

In a 3- to 4-page paper, address the following:

• Describe the use of cost-volume-profit analysis in decision making, including how it helps managers cope with uncertainty.
• Explain how the contribution margin changes as output levels vary due to moving variable and fixed costs.
• Compare and contrast gross margin and contribution margin.
• Explain the uses of gross and contribution margins, including why a company would need to account for both.

assignment 2

 

In order to make appropriate financial decisions, it is important to understand the different categories of financial statements. Financial statements allow data to be compiled and analyzed for direct comprehension, including evaluating a company’s profitability, liquidity, and solvency. These financial statements are important, because once the information is presented, it can be compared with past years of production, as well as how a company compares with its competitors. Without accurate financial statements, a company has no point of reference and therefore no way to improve or grow.

To prepare for this Assignment, review the week’s Learning Resources and consider what elements factor into each type of financial statement, and how the creation of financial statements has an accepted sequence to establish a report of a company’s financial health and stability.

Part 1: Balance Sheet

Classify the list of financial elements within the different categories of a balance sheet.

Categories	Elements
Short-term assets Long-term assets Short-term liabilities Long-term liabilities Owner’s equity	Cash Accounts payable Land Property, plant, and equipment Inventory Accounts receivable Paid in capital Retained earnings Notes payable Mortgage

Then, explain in 2 or 3 paragraphs which sequence the four major financial statements need to be prepared for, and why.

Part 2: Statement of Cash Flow

Classify the list of financial elements within the different categories of a statement of cash flow.

Categories	Elements
Operating activities Investing activities Financing activities	Net income-decreased for period Accounts receivable increase for period Accounts payable decrease for period Accruals decrease for period Depreciation-increases for period Stock issued Property purchased Bonds paid off Inventories increase for period Accrued liabilities decrease Notes payable increase for period Bonds redeemed for period Inventory-decreased for period

Then, in a 1-page paper, explain whether or not each item would be considered a source or use of cash for the period in question.

Note: In preparing your final submission, be sure to include both your completed charts and the written explanations.

 DQ

If a real estate investor comes to you for advice on new investment opportunities in Baghdad and Chicago, how would you compare and assess the risks between these two locations? Most people would consider an investment in Baghdad to be riskier than that in Chicago, but how would you quantify that risk in terms of dollars and cents? Whenever investors are presented with two options, they must assess their risks. While the differences between Chicago and Baghdad real estate may be extreme, this type of comparison is representative of the skill of risk assessment. For finance professionals, risk should be given due consideration at every opportunity.

Now let’s consider risk on a different scale. McDonald’s is both a multinational corporation and a collection of franchise owners, and decisions made at the highest levels incur a variety of risks for those invested in individual stores across the country. In this week’s Discussion, you evaluate the level of risk incurred in a decision-making scenario. This scenario involves McDonald’s deciding between offering a new sandwich in all their stores versus opening a brand-new individual store. You evaluate these risks from the perspective of the McDonald’s Corporation and an individual franchise owner who would own the new store.

To prepare for this Discussion, consider the calculation of risks associated with potential opportunities, including how the context of these risks might affect the decisions made. Also, search the Internet for recent news stories about McDonald’s financial health and the company’s relationship with its franchisees.

By Day 3

Post your response to the following:

• Compare and contrast the risks of McDonald’s deciding to offer a new sandwich versus a franchisee opening a brand-new store.
• Explain which decision would incur more risks to the restaurant chain and why.
• Explain which decision would incur more risks to the individual franchisee and why.

 

WEEK3

ASSIGNMENT 

In this week’s Discussion, you differentiated between different costs and analyzed their relationships. For this week’s Assignment, you evaluate a scenario in which standard cost systems are in use by using direct labor and the materials’ variances calculations.

Imagine meeting David Baker, the owner of a T-shirt manufacturer, whose business produces T-shirts for local businesses and organizations where you live. David wants his business to grow considerably, though he knows that with growth comes many different costs, including increased labor costs, material costs, and maintenance on his building. He needs to know if there are ways he can continue to grow his company while cutting costs in the process. David knows that there are four main costs to consider (product costs, direct material cost, direct labor cost, and manufacturing overhead), and he knows that he must also consider his costs over time. But he is not sure if all of these costs are equally important, or if he should prioritize some costs over others. David has come to you for advice on how to facilitate the optimal growth of his company.

To prepare for this Assignment, consider how the classification of manufacturing costs will provide David with a better understanding of the current state of his business, and how it can inform effective financial decision making.

Using the Week 3 Assignment template, categorize each of the following Cost Varieties by placing them within the Product Cost or Period Cost column/system.

Cost Variety	Product Cost	Period Cost
Advertising expenses for T-shirts Depreciation on PCs in marketing department Fire insurance on corporate headquarters Fire insurance on plant Overtime premium paid assembly workers Factory building maintenance department Factory security guards Property taxes paid on corporate headquarters Salaries of public relations staff Salary of corporate controller Wages of engineers in quality control Wages paid to assembly-line employees Wages paid to employees in finished goods warehouse

Once you have divided the Cost Varieties between the Product Cost and Period Cost systems, identify each product cost within the following appropriate sections: Direct Materials, Direct Labor, or Manufacturing Overhead.

Product Cost	Direct Materials	Direct Labor	Manufacturing Overhead

Finally, in a 1- to 2-page paper, provide at least two recommendations for which types of costs David should pay the most attention to in order to reduce costs. Include a rationale for each recommendation.

Note: In preparing your final submission, be sure to include your Week 3 Assignment template with completed charts and your written explanations with your 1- to 2-page document submission.

 

PROJECT

Every organization works like a machine to achieve its goals. This machine produces outcomes. By comparing the outcomes to the goals, those running the machine can see how well the machine is working.

—Ray Dalio, American investor and billionaire, CEO of Bridgewater Associates (2011)

When looking at a business, it is important to be able to analyze all of its financial components. Annual reports tell a specific story to a range of audiences: management, investors, employees, and consumers. This story can explain the state of the business as well as determine a course of action.

For your Course Project, you examine financial and accounting information for Netflix, Inc., and Amazon.com, Inc. You use these two companies for this entire project, including their most recent annual reports and financial statements. Refer to the Course Project Overview document in this week’s Learning Resources for complete instructions and deliverables.

To prepare for Part 1 of the Course Project, review Item 7 of the annual report: Management Discussion and Analysis (MD&A), along with the footnotes of the financial statements. Read the footnotes to the financial statements to see what they disclose about the business’s assets, liabilities, and stockholder equity.

For Part 1, complete the following:

• Prepare an Executive Summary (2–3 pages) comparing Netflix, Inc., and Amazon.com, Inc. The summary must address the following:
  • What accounts does each company have that you think are distinctive to each company?
  • Summarize the risk factors mentioned within the MD&A (Item 7 in the 10-K) of the footnotes.
  • What do you think are the most important balance sheet or income statement accounts that are common to the industry of the two selected companies? Explain.

DQ

Imagine that you have a friend, Jennifer Jackson, who owns a small family restaurant that opens at night. Jennifer’s restaurant has been open only a few years, and she likes to keep the business small. The popularity of the restaurant has increased, but Jennifer is hesitant extending service to include lunch hours. She has two young children at home, and keeping the restaurant running only in the evenings has been profitable enough and allowed her to keep a sense of balance in her life. And yet, Jennifer feels she is losing an opportunity to expand that may not be available to her in a few years. For Jennifer’s case, what are the different costs factoring into her decision of whether to extend business hours or not?

To prepare for this Discussion, consider how to analyze cost concerns, such as opportunity cost, and consider how to determine the cost of alternatives over single and multiple time periods. Also, think about how you would analyze the role of costs in the decision-making process.

By Day 3

Post your response to the following:

• Differentiate opportunity cost, marginal cost, and relevant cost, including supportive and illustrative examples in terms of the purposes for which each cost is used. You can use the scenario of Jennifer’s restaurant to illustrate your examples.
• Analyze the relationship between marginal benefit and marginal cost, and explain how marginal benefit is measured and how it relates to marginal cost.
• Beyond the scenario of Jennifer’s restaurant, what other costs must managers address before making decisions? Why?

WEEK 4

ASSIGNMENT

How much is the business paying out versus how much it is taking in? When approaching decisions from a linear profit model, the total costs of your expenses versus the profit you bring in helps decision makers determine the viability of potential options. Think about your personal budget: If you make x amount of money from your job (your “take in”) and you want to add a new or different expense into your finances (what you “pay out”), a linear profit model can help calculate the feasibility of this option.

To prepare for this Assignment, consider how calculations are an essential asset to decision making, especially when using a linear profit model. Think about how a difference in calculation can impact a short-term decision or major change in a business.

Using the Week 4 Assignment template, examine cost behaviors and decision-making scenarios using the linear profit model. You then write 1–2 pages on each, looking at the presented finances and providing recommendations on potential improvements.

Part 1

Baker Consolidated

Baker Consolidated operates a cafeteria for its employees. The operation of the cafeteria requires fixed costs of $4,700 per month and variable costs of 40% of sales. Cafeteria sales are currently averaging $12,000 per month.

Baker has an opportunity to replace the cafeteria with vending machines. Gross customer spending at the vending machines is estimated to be 40% greater than current sales, because the machines are available at all hours. By replacing the cafeteria with vending machines, Baker would receive 16% of gross customer spending and avoid all cafeteria costs. In a poll, employees did not express a preference for one option over the other.

In a 1- to 2-page document, explain the impact of this decision. Be sure to address the following:

• How much does monthly operating income change if Baker Consolidated replaces the cafeteria with vending machines? Explain using linear profit modeling calculations.
• What recommendation would you make for Baker Consolidated’s managers considering this decision? Justify your response.
  • In your recommendation, be sure to calculate how the monthly operating income changes if the company replaces the cafeteria with vending machines.

Note: In preparing your final submission, be sure to include your Week 4 Assignment template with your 1- to 2-page document submission.

Part 2

Barnwell Brothers Company

Data for the Barnwell Brothers Company are as follows:

Sales (100,000 units)			$500,000
Costs	Fixed	Variable
Raw material	$ 0	$150,000
Direct labor	$0	$100,000
Factory costs	$50,000	$75,000
Selling and administrative costs	$55,000	$25,000
Total costs	$105,000	$350,000	$455,000
Operating income			$45,000

In a 1- to 2-page document, address the following based on the provided company cost data:

• What is the break-even sales in units?
• If Barnwell Brothers is subject to an effective income tax rate of 40%, how many units would Barnwell Brothers have to sell to earn an after-tax profit of $90,000?
• If fixed costs increase $31,500 with no other cost or revenue factors changing, what is the break-even sales in units?
• How would these calculations affect decision making for managers at Barnwell Brothers? Why?
• What recommendation(s) would you suggest for reducing costs at Barnwell Brothers? Justify your recommendations using linear profit modeling.

Part 3

Vino Bella Cellars

Vino Bella Cellars manufactures a 1,000-bottle wine storage system that maintains optimum temperature (55–57 °F) and humidity (50–80%) for aging wines. The following table depicts how average cost varies with the number of units manufactured and sold (per month):

Quantity	Average Cost
1	$ 6,000
2	$ 5,000
3	$ 4,300
4	$ 3,850
5	$ 3,550
6	$ 3,550
7	$ 3,657
8	$ 3,925
9	$ 4,300
10	$ 4,800

In a 1- to 2-page document, address the following:

• What is the defined difference between average cost and marginal cost?
• Vino Bella Cellars sells the units for $4,500 each. This price does not vary with the number of units sold. How many units should Vino Bella Cellars manufacture and sell each month?
• Should Vino Bella Cellars charge more for different quantities of units? Why or why not?
• What recommendation would you make to the owners to increase their profits on this product? Explain the role of linear profit modeling within your recommendation.

PROJECT

 

I put forward a pretty general theory that financial markets are intrinsically unstable...in financial markets, you deal with unknown quantities. You're trying to discount the future.

—George Soros, American (Hungarian-born) business magnate, investor, and philanthropist (PBS, 1999)

When looking through financial and income statements, it is important to determine where your business is heading and what is driving your business in that direction. For example, financial ratios help indicate whether a company is improving or deteriorating. For this part of the project, you look at both Netflix, Inc., and Amazon.com, Inc., and see where they are headed financially.

To prepare for Part 2 of the Course Project, locate the financial statements for Netflix, Inc., and Amazon.com, Inc., and isolate the income statements. Analyze these statements and read the footnotes to the financial statement to see what they disclose about their revenues and expenses.

For Part 2, answer the following questions in a 3- to 4-page paper:

• Do Netflix, Inc., and Amazon.com, Inc., have any accounts in common?
• Are each company’s revenues and expenses increasing or decreasing?
• Do the income statements provide any evidence as to why revenues and expenses are increasing or decreasing? Provide a rationale to support your reasoning.
• What revenue(s) or expense(s) are unique to each company?
• Based on the presented financial ratios, do you think each company is improving or deteriorating? Provide a rationale to support your reasoning.

DQ

 

If you are a manager, one aspect of decision making is trying to account for change, adjusting how you go about your finances based on your situation. This can be illustrated through contribution margin—an aspect of cost-volume-profit analysis that is useful for both professionals and consumers for decision making. For example, the best time for a consumer to buy a car is at the end of the year, because the sellers are more willing to sell cars at the lowest of margins to meet their quotas.

For this Discussion, review the week’s Learning Resources and consider how situations such as this are not only normal but also critical to proper decision making based on the conditions of your company and the market.

By Day 3

Post

• An explanation of which features of cost-volume-profit analysis help managers cope with uncertainty. Justify your response.
• An explanation of why managers are interested in the break-even analysis point.
• An analysis of how the contribution margin changes in relation to output levels due to changes in variable costs and fixed costs. How can managers make changes to variable costs and fixed costs once budgets or production targets have been set?

 

WEEK 5

ASSIGNMENT

Estimating cost functions is a process that is essential for finance professionals. Therefore, it is important that you understand the methods and best practices for conducting this process. For this Assignment, you use your assessment of cost function estimation methods in the context of the Netflix and Amazon Data Spreadsheet in this week’s Learning Resources. Then, you use this assessment, along with the ideas generated in this week’s Discussion, to develop cost function estimates for both Netflix, Inc., and Amazon.com, Inc. Use the following methods:

• Account classification
• High-low
• Regression analysis methods

For this Assignment, write a 1- to 2-page paper explaining which method you believe best estimates cost functions for both Netflix, Inc., and Amazon.com, Inc. Justify your response with supportive examples and references.

 

PROJECT

Netflix began when Reed Hastings had to pay a late fee of $40 for an overdue rented video. He knew he could come up with a more profitable business that would be more enjoyable for the consumer (Funding Universe, n.d.). Before Jeff Bezos founded Amazon, he was a vice president at D. E. Shaw, a global investment management firm in New York City. But he left it all in 1995 to move to Seattle, rent an apartment for $890 a month, and build his electronic commerce company when the Internet was just starting to take hold (Brandt, 2011). Looking at such humble beginnings, it is hard to believe that Hastings and Bezos grew such influential and recognized businesses. You can even go to the websites of their respective companies and find their financial statements to get a better appreciation for the truly impressive growth of each company.

To prepare for Part 3 of your Course Project, locate the financial statements of both Netflix, Inc., and Amazon.com, Inc., in the Netflix and Amazon Data Spreadsheet document, located in this week’s Learning Resources. Isolate their current statements of cash flows. Analyze these statements and consider how they reflect the current financial health and sustainability of these companies.

For Part 3, answer the following questions in a 3- to 4-page paper:

• Which method did each company use when calculating the net cash provided by operating activities? Explain.
• What was the most significant (i.e., monetarily largest) item reported by each company in its investing section and in its financing section?
• What were these two companies’ trends in terms of net cash provided by operating activities during this period of time? What do you think it means for these companies’ sustainability?

DQ

Quality is much better than quantity. One home run is much better than two doubles.

—Steve Jobs, American entrepreneur and cofounder of Apple Inc. (Burrows & Grover, 2006)

Quantitative data goes only so far in a business: the human element of business and accounting is invaluable. It is difficult for computers and algorithms to determine quality of content. Qualitative considerations matter when making any decision in life, and financial decisions related to linear profit modeling are no exception. For this Discussion, you analyze the qualitative considerations of linear profit modeling. You analyze some of the tools that managers use when they make decisions, develop external reports, and control organizational activities. Specifically, you focus on linear profit modeling as a means for calculating break-even point and target profits.

To prepare for this Discussion, review the article “Whopper to Go” from this week’s Learning Resources. Then consider how Burger King’s profitability problems can be framed in a linear profit model. (Note: Numbers are not required to frame this problem mathematically.)

By Day 3

Post your response to the following:

• How do linear profit models relate to GAAP-basis income statements?
• In terms of qualitative considerations, what are the limitations of using linear profit models as it applies to the Burger King example?
• Are these limitations present in all linear profit models? Why or why not?
• Why might it be useful to frame Burger King’s profitability problems using a linear profit model despite the limitations of the model?

 

WEEK6

ASSIGNMENT

Capital budgeting is the process of determining whether or not an investment is worthwhile.

—Evangeline Marzec, Director of Business Strategy, Microsoft (n.d.)

Capital budgeting provides financial decision makers with important perspectives and information. With tools such as present and future values, perpetuities and annuities, and cash flows, capital budgeting can craft a detailed picture of whether an investment will be worth the cost and effort.

For this week’s Assignment, you evaluate the following capital budgeting decision scenario.

Pizza Planet Co.

Pizza Planet Co. paid a consultant to study the desirability of installing some new equipment. The consultant submitted the following analysis:

Cost of new equipment	$50,000
Present value of after-tax revenues from operation	$45,000
Present value of after-tax operating expenses	$10,000
Present value of depreciation expenses	$43,750
Consulting fees and expenses	$375

The corporate tax rate is 40%. In a 1- to 2-page paper, explain whether Pizza Planet Co. should install the new equipment. Justify your response with supportive examples and references.

Note: In preparing your final submission, be sure to include your Week 6 Assignment template with your 1- to 2-page document submission.

PROJECT

Netflix, Inc., and Amazon.com, Inc., each deal with billions of dollars in transactions every year, so each company must be diligent in its record keeping and handling of finances. As you have examined previously in this course, companies use balance sheets to record financial activities and to communicate their financial health to stakeholders.

To prepare for Part 4 of your Course Project, locate and find the current balance sheets of both Netflix, Inc., and Amazon.com, Inc. Analyze these balance sheets and consider what trends, if any, they illustrate for either company. Consider the cause and implications for this information.

For Part 4, answer the following questions in a 3- to 4-page paper:

• Are any of the accounts increasing or decreasing? If so, what indicators explain this trend?
• Which of these accounts are distinctive to each business? Why?
• Based on the presented financial ratios, can you determine if the firm is improving or deteriorating? Why or why not?

DQ

A budget is simply an estimate of income and spending over a period of time. Budgets take many forms and are usually crafted with specific financial goals in mind, such as 10-year term of repayment for student loans or 1-year budgeting for a savings account. Individuals often use a monthly budget for entertainment, groceries, utilities, and rent or mortgage. Businesses and finance professionals do this same exact thing, usually emphasizing profit maximization.

Going “over budget” is a common concern for finance professionals—it means there might be less profits. And yet, you hear people going over budget more than you hear people say that they have gone under budget or exactly achieved their financial goals using a budget. Despite the number of times businesses and individuals cannot stay within budget, companies still use them to support their decisions. This process perpetuates the idea of budgets as useful for control, but not necessarily for planning. Think about your own finances and budgeting. Do you agree with this idea?

For this Discussion, you assess the role of budgeting in making control and planning decisions.

By Day 3

Post your response to the following:

• What do you think is meant by the idea of a budget’s usefulness as a tool for control, but not necessarily for planning, within business decision making? Justify your response.
• How can budgets be used to evaluate investment proposals for making planning decisions? Explain with supportive examples.
• What do you believe should be the role of budgeting in control and planning decisions?

WEEK 7

When you want to learn something, even something as complicated as how to make capital budgeting decisions, never rule out the value of simple observation. Observing and analyzing the past and present decisions of others can help you make present and future decisions of your own. This is especially true in finances.

For this Assignment, you read and analyze the following capital budgeting decision scenarios. In a 3- to 4-page paper, you evaluate the two scenarios using the following calculations:

• Net present value
• Discounted cash flow
• Risk-adjusted rate of return
• Internal rate of return

Part 1: Carroll Tree Ranch

Carroll Tree Ranch is considering expanding an existing plant on a piece of land it already owns. The land was purchased 15 years ago for $162,500 and its current market appraisal is $410,000. A capital budgeting analysis shows that the plant expansion has a net present value of $65,000. The expansion will cost $865,000, and the discounted cash inflows are $930,000. The expansion cost of $865,000 does not include any provision for the cost of the land. The manager preparing the analysis argues that the historical cost of the land is a sunk cost—a cost that has already been incurred and thus cannot be recovered—and since the firm intends to keep the land whether or not the expansion project is accepted, the current appraisal value is irrelevant.

• Should the land be included in the analysis? Explain why or why not.

Part 2: Housing Markets

A home comparable to yours in your neighborhood sold last week for $75,000. Your home has a $60,000 assumable 8% mortgage (compounded annually) with 30 years remaining. An assumable mortgage is one that the new buyer can assume on the old terms, continuing to make payments at the original interest rate. The house that recently sold did not have an assumable mortgage; that is, the buyers had to finance the house at the current market rate of interest, which is 7.5%.

• What selling price should you place on your home? Explain using capital budgeting calculations.

A third home, again comparable to the one that sold for $75,000, is being offered for sale. The only difference between this third home and the $75,000 home is the property taxes. The $75,000 home’s property taxes are $1,500 per year, while the third home’s property taxes are $1,000 per year. The differences are due to vagaries in how property tax assessors assessed the taxes when the homes were built. In this tax jurisdiction, once annual taxes are set, they are fixed for the life of the home.

• Assuming the market rate of interest is still 7.5%, what should be the price of this third home? Why?

 

PROJECT

On-demand products and services are more popular than ever before. The expansion of online shopping, media streaming, and all other mobile services means great news for the businesses behind these services. Netflix, Inc., Amazon.com, Inc., Spotify Ltd., and similar services are all becoming household names as consumers loyally back the companies that offer them the fastest delivery of products and content for the most reasonable price.

Think about two of these services in particular: Netflix, Inc., and Amazon.com, Inc. To prepare for Part 5 of your Course Project, create a case study analysis on the key accounting policies, respective profitability, and expected staying power in the industry of these two publicly traded companies: Netflix, Inc., and Amazon.com, Inc.

For Part 5, your analysis of 5–6 pages should include the following components:

1. Overview of Netflix, Inc., and Amazon.com, Inc. (1 page)
2. Industry Competitors (1 page)
3. Narrative Analysis of Key Accounting Policies (2–3 pages)
   1. If you were a supplier, would you extend open account credit to either or both of these companies? Why or why not?
   2. If you were a banker, would you make a substantial long-term loan to either or both of these companies? Why or why not?
   3. If you were an investment banker, would you buy or merge with either or both of these companies? Why or why not?
   4. As an investor, would you buy stock in either or both of these companies? Why or why not?
4. Current Issues Facing Netflix and Amazon (1 page)
   1. What sustainability issues, if any, face each company? Explain.

 

DQ

The Balanced Scorecard is a “strategic planning and management system that is used...to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals” (Balanced Scorecard Institute, n.d.).

Imagine that an organization you are familiar with has been thinking about implementing the Balanced Scorecard as one of the performance measures as described in Kaplan and Norton (2007) in this week’s Learning Resources. Consider this tool, its implementation, and its effectiveness relative to your professional experience.

By Day 3

Post an evaluation of the Balanced Scorecard as a performance measurement tool within financial decision making. Your evaluation should address the following:

• Identify and explain the key areas of the Balanced Scorecard that inform financial decision making.
• What are some of the benefits and costs of a Balanced Scorecard for performance measurement?
• Based on your evaluation of the benefits and costs of the Balanced Scorecard, determine whether you would recommend that the organization you work for (or one you have worked for in the past) implement a Balanced Scorecard as a performance measurement tool. Provide a rationale to justify your recommendation.

 

WEEK 8

ASSIGNMENT

Imagine that you are a financial advisor for Netflix, Inc., and Amazon.com, Inc. You are tasked with creating a comprehensive forecast of the revenue, costs, and cash flows of these companies, answering key questions that may influence their future decisions.

To prepare for this Assignment, use the Netflix and Amazon Data Spreadsheet, located in this week’s Learning Resources, to generate a pro forma forecast and consider what this indicates about the future for these two companies.

In a 1- to 2-page paper, provide the following:

• A forecast of Netflix, Inc., and Amazon.com, Inc.’s revenue, costs, and estimated cash flows into the next five years.
• The appropriate discount rate for Netflix, Inc., and Amazon.com, Inc.’s forecasted cash flows.
• An appropriate risk-adjusted rate of return for use in evaluating an investment in Netflix, Inc., and Amazon.com, Inc.
• A determination of the estimated fair market value of 100% of Netflix, Inc., and Amazon.com, Inc.’s equity.

ASSIGNMENT 2

The work of finance professionals can go a long way toward promoting positive social change. The Principles for Responsible Management Education (PRME) is a leading organization in promoting this direction in business. PRME has six principles, including “Values.” The “Values” principle states, “We will incorporate into our academic activities and curricula the values of global social responsibility as portrayed in international initiatives such as the United Nations Global Compact” (PRME, n.d.). From this principle, many companies are utilizing “impact investing” to harness “the power of the capital markets to provide financial and social returns” (Ahern, 2015). Corporations can accomplish this by connecting sales to social campaign and nonprofit beneficiaries around the world. For example, Warby Parker’s “Buy a Pair, Give a Pair” campaign partners with VisionSpring to provide access to vision care and eyewear around the world (Warby Parker, 2015).

To prepare for this Assignment, review the Principles for Responsible Management Education (PRME) and consider how financial decisions can contribute to promoting positive social change.

In a 2- to 3-page paper, address the following:

• How do finance and accounting play a role in ethics and sustainable positive social change?
• How might you use accounting or finance to support this role that you described above?

 

DQ

You know, people talk about this being an uncertain time. You know, all time is uncertain. I mean, it was uncertain back in—in 2007, we just didn't know it was uncertain. It was—uncertain on September 10th, 2001. It was uncertain on October 18th, 1987, you just didn't know it.

—Warren Buffett, American business magnate, investor, and philanthropist (Crippen, 2010)

Weather forecasters know they are making future predictions based only on past and present observations. What if a colleague told you that an investment in that new startup was a sure thing? Finance professionals are making predictions, too, after all. Forecasts of future values are based on the analysis of past and present values. What tools can you use to be more certain that financial forecasts are on target?

For this Discussion, you evaluate the role of cost analysis in forecasting present and future values for decision making. You include forecasting present and future values, discounted cash flows, and the role of cost analysis in the decision-making process.

By Day 3

Post your response to the following:

• How do discounted cash flow (DCF) methods analyze investment decisions?
• What two types of factors affect the role of cost analysis in forecasting present and future value for decision making?
• How can organizations anticipate and plan for uncontrollable external events, such as weather? Explain.

Throughout this course, you have encountered many concepts. Hopefully, your professional financial literacy is greater now than it was at the beginning of the course. To prepare for this Discussion, take the survey “What Is Your Financial Literacy?,” located in this week’s Learning Resources, one more time. Consider how your results have changed from the first time you took it, in Week 1.