Exchanges, NYSE, NASDAQ, etc

How does the two exchanges operate? How are NYSE and NASDAQ similar, if at all? How are the two exchanges different from one another, if at all? In light of the recent corporate scandals like Enron, WorldCom, etc, have any of the two exchanges taken some meaningful measures to help allay the concerns of investors? Explain.

New hire training manual for Strident Marks

Consider the role of the finance department at Strident Marks. The finance department has a couple of new hires, and the CFO has asked that you spend a short amount of time with them, catching them up on some areas that are very important to the company at this time. These also happen to be areas for which Strident Marks does not yet have any training material. Write what you feel should be included in their training manual about the components of financial systems, focusing on valuation. What role does a financial department play in valuing business opportunities and what are some of the key financial concepts that valuation work must consider? Scenario: You are a financial analyst in ... click for more

Cash flows and bond decision making for Milken Toupee and Lawn Service

Background: The M. Milken Toupee and Lawn Service (MMTLS) is considering purchasing a new paving machine, the Beta. This new machine will replace the current paving machine, the Alpha. The Alpha was purchased two years ago for $2 million and is being depreciated on a straight-line basis, over its original economic life of 5 years, to a book value of $0. It is anticipated that the Alpha can be sold at the end of its economic life, in 3 years, for $50,000. The Alpha could be sold today for $1 million. The Beta will cost $3 million and will be depreciated over its economic life of 3 years to a book value of $0. MTPS expects to sell the Beta in three years for $200,000. If the Beta is pu... click for more

market risk and decision making

BACKGROUND: Ponza International has three divisions. One is engaged is leisure wear, one in graphics, and one in household paint. The company has identified proxy companies in these lines of business whose stocks are publicly traded. Neither Ponza International nor the proxy companies employ debt in their capital structures. Ponza has estimated that the systematic risks of its three divisions are as follows: Leisure Graphics Paint Beta: 1.16 1.64 0.70 The expected market risk premium is 8%, the current T-bill rate is 7%, the yield on A-rated corporate debt is 9.3% (If Ponza issues debt it would be A-rated), and inflation is expected to remain at 3.2% for the f... click for more

Flexible Budgetary Variance Model

You are evaluating the performance of the laboratory department manager. The output of this department is the number of tests performed. A static budget was prepared at the beginning of the year. You are now examining that budget in relation to actual experience. The relevant data are included in the attachment. The department manager is pleased because the department has a favorable $50,000 cost variance. Evaluate the effectiveness of the manager using the flexible budgetary variance model. Did the manager do a good job this year? See attached file for full problem description.