Question 1

Start with the partial model in the attached.

The stock of Matrix Computing sells for $65, and last year’s dividend was $2.53. Security analysts are projecting that the common dividend will grow at a rate of 9% a year. A flotation cost of 12% would be required to issue new common stock. Matrix’s preferred stock sells for $42.00, pays a dividend of $3.32 per share, and new preferred stock could be sold with a flotation cost of 10%. The firm has outstanding bonds with 25 years to maturity, a 15% annual coupon rate, semiannual payments, $1,000 par value. The bonds are trading at $1,271.59. The tax rate is 20%. The market risk premium is 5.5%, the risk-free rate is 7.0%, and Matrix’s beta is 1.2. In its cost-of-capital calculations, Matrix uses a target capital structure with 40% debt, 10% preferred stock, and 50% common equity.

a. Calculate the cost of each capital component—in other words, the after-tax cost of debt, the cost of preferred stock (including flotation costs), and the cost of equity (ignoring flotation costs). Use both the CAPM method and the dividend growth approach to find the cost of equity.

b. Calculate the cost of new stock using the dividend growth approach.

c. Assuming that Matrix will not issue new equity and will continue to use the same tar-get capital structure, what is the company’s WACC

Question 2

Start with the partial model in the attached.

Pinto.com has developed a powerful new server that would be used for corporations’ Internet activities. It would cost $25 million at Year 0 to buy the equipment necessary to manufacture the server. The project would require net working capital at the beginning of each year in an amount equal to 12% of the year’s projected sales; for example, NWC₀ = 12%(Sales₁ ). The servers would sell for $21,000 per unit, and Pinto believes that variable costs would amount to $15,000 per unit. After Year 1, the sales price and variable costs will increase at the inflation rate of 2.5%. The company’s nonvariable costs would be $1.5 million at Year 1 and would increase with inflation. The server project would have a life of 4 years. If the project is undertaken, it must be continued for the entire 4 years. Also, the project’s returns are expected to be highly correlated with returns on the firm’s other assets. The firm believes it could sell 2,000 units per year. The equipment would be depreciated over a 5-year period, using MACRS rates. The estimated market value of the equipment at the end of the project’s 4-year life is $1 million. Pinto.com’s federal-plus-state tax rate is 20%. Its cost of capital is 10% for average-risk projects, defined as projects with a coefficient of variation of NPV between 0.8 and 1.2. Low-risk projects are evaluated with an 8% project cost of capital and high-risk projects at 13%.

1. Develop a spreadsheet model, and use it to find the project’s NPV, IRR, and payback.
2. Now conduct a sensitivity analysis to determine the sensitivity of NPV to changes in the sales price, variable costs per unit, and number of units sold. Set these variables’ values at 10% and 20% above and below their base-case values.
3. Now conduct a scenario analysis. Assume that there is a 25% probability that best-case conditions, with each of the variables discussed in Part b being 20% better than its base-case value, will occur. There is a 25% probability of worst-case conditions, with the variables 20% worse than base, and a 50% probability of base-case conditions.
4. If the project appears to be more or less risky than an average project, find its risk-adjusted NPV, IRR, and payback.
5. On the basis of information in the problem, would you recommend the project should be accepted?

Question 3

You are a financial analyst for the Waffle Company. The director of capital budgeting has asked you to analyze two proposed capital investments, Projects A and B. Each project has a cost of $50,000, and the cost of capital for each is 10%.

The projects’ expected net cash flows are as follows:

1. Calculate each project’s payback period, net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), and profitability index (PI).
2. Which project will you select if your decision was based solely on the project’s payback period?
3. Which project or projects should be accepted if they are independent?
4. Which project should be accepted if they are mutually exclusive?
5. d. How might a change in the cost of capital produce a conflict between the NPV and IRR rankings of these two projects? Would this conflict exist if r were 6%? (Hint: Plot the NPV profiles.)

Question 4

Marvin Industries must choose between an electric-powered and a coal-powered forklift machine for its factory. Because both machines perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered machine will cost more, but it will be less expensive to operate; it will cost $102,000, whereas the coal-powered machine will cost $69,500. The cost of capital that applies to both investments is 10%. The life for both types of machines is estimated to be 6 years, during which time the net cash flows for the electric-powered machine will be $26,150 per year, and those for the coal-powered machine will be $20,000 per year. Annual net cash flows include depreciation expenses.

1. Calculate the NPV and IRR for each type of machine, and decide which to recommend

Submit your answers in a Word document.

Your essay needs to meet the following criteria or you will be asked to resubmit:

• 12pt. Font
• 500-1000 words (please try to not go over that amount)
• Double spaced
• MLA format for citations (this website will help you if you are not sure how to cite)
• At least 3 sources

Prompt: Research the Presidential Election of 2012. Pick one of the issues below and present an essay that enlightens you about the circumstances surrounding that issue during the 2012 election. Include the following in your essay- what that issue entailed, the major two parties views on that particular issue, any good points presented by either party (if any), you may argue whether any of the views were conservative or liberal, and whether or not the people seemed to agree with either party on the issue.

Issues to choose from:

• National Security
• Energy
• The Economy
• Government Reform

Please write your essay in MLA format, and follow the standard five paragraph model. Your essay should have an introduction paragraph, three body paragraphs, and a conclusion paragraph.

Job Description, Analysis, and Design and Mutual Respect and Trust

The knowledge of jobs is used for many purposes, certainly in the field of HRM for healthcare organizations. In particular, knowledge of what a job requires an employee to do—the basis for pay—is essential to make comparisons with other jobs for market pricing and as the first step in evaluating jobs internally. Today and every day, as leaders or managers, we want to emphasize the golden rule of treating others the way we want to be treated. We are working with a diverse team of people from many cultures, traditions, backgrounds, and belief. This is what makes us a strong, effective, and successful healthcare organization.

Tasks:

In a minimum of 200 words, post to the Discussion Area your responses to the following:

• Consider the differences among a job description, a job analysis, and a job design. What is the importance of each in healthcare HRM?
• How would you foster a climate of mutual respect and trust among your team members?
• Suppose you are developing the job description, analysis, and design for a clinical team leader position. Does diversity relate to the position at all? Explain your answer. If yes, how will you address it?

Provide reasons and evidence in support of your responses.

Be sure to cite any relevant resources used in framing your responses. Apply APA standards to cite sources.

During your first week as a Senior Information Systems Security director, you met with the Chief Information Officer (CIO) and Chief Security Officer (CSO). During the meeting, they revealed their deep concerns with the organization’s business continuity plans (BCP). Since you were previously responsible for BCPs for a large enterprise they are requesting that you review the company’s BCP staffing plans and training plans.

They would like you to provide a report with your findings and recommendations for corrective action.

Additionally, include why it is important to include legal representatives on the business continuity planning team and provide an example of laws or regulation the company should include to remain compliant.

While there is not a specific page requirement for this assignment, students are required to fully develop ideas and answer questions to the point that no further questions are left in the mind of the reader. If the instructor can clearly find the answers to their questions, the ideas within the report are fully developed. If there are unanswered or under-answered questions, further development of the report is required. 
Keep the following in mind:

• More words do not necessarily indicate more meaning.
• When an employee is tasked with a project in the workplace that requires a report, the report should fully answer all the questions needing to be answered. In this school environment, students are learning how to prepare such documents.
• Consider your audience. Although instructors are very knowledgeable on the subject matter, they need to verify that the student has absorbed the material through a written report. Students should therefore write to an audience of a co-worker or classmate who does not know the answers to the questions posed.
• For students who are more comfortable with more specific guidelines, ideas can generally be developed in one to three paragraphs. The goal of writing in this class is to demonstrate what you have learned.