ACC4320 Week 5 D1

Now that Hurd has more specifically located the source of the economic exposure, Unit B, it is considering ways to hedge this exposure. Since Unit B finances some of its operations, one idea being considered by Hurd management is a change the financial structure of Unit B to a mix of financing in dollars and financing in pounds. Note: Assume the interest rate on pounds is approximately equal to the interest rate on dollars. Career Success Tips ates, Unit B will need revenue of Unit B. TOTAL SCORE: 2/3 more fewer dollars for loan payments, which would partially offset the effect of this appreciation on the Grade Final Step

What are the major flaws with NPV? What are the major flaws with IRR? If you are going to a bank and trying to get a loan, which is the best method to use (NPV, IRR, Payback period)?

Please help me.  Thankyou.

could you please help with attached question?

Please help with the below minicase.  Directions: The best way to do this case is to use relevant credit information and calculate some financial ratios: ROA, debt ratio, liquidity ratios, ROE, profit margin, Inventory and Asset turnover. Then look at breakeven point probability, and finally the possibility of a repeat order. What can you say about Miami Spice’s creditworthiness? What is the break-even probability of default? How is it affected by the delay before MS pays its bills? How should George Stamper’s decision be affected by the possibility of repeat orders?   MiniCase: George Stamper a credit analyst with Micro-Encapsulators Corp. (MEC) needs to respond to an urgent email request from the southeast sales office. The local sales manager reported that she had an opportunity to clinch an order from Miami Spice (MS) for 50 encapulators at $10,000 each She added that she was particularly keen to secure this order since MS was likely to have a continuing need for 50 encapulators a…

Please help with the below minicase.  Directions: The best way to do this case is to use relevant credit information and calculate some financial ratios: ROA, debt ratio, liquidity ratios, ROE, profit margin, Inventory and Asset turnover. Then look at breakeven point probability, and finally the possibility of a repeat order. What can you say about Miami Spice’s creditworthiness? What is the break-even probability of default? How is it affected by the delay before MS pays its bills? How should George Stamper’s decision be affected by the possibility of repeat orders?   MiniCase: George Stamper a credit analyst with Micro-Encapsulators Corp. (MEC) needs to respond to an urgent email request from the southeast sales office. The local sales manager reported that she had an opportunity to clinch an order from Miami Spice (MS) for 50 encapulators at $10,000 each She added that she was particularly keen to secure this order since MS was likely to have a continuing need for 50 encapulators a…

Which of these statements is true? A)There is no reason to pay off a loan early B) when shopping for a loan, you need to compare only APRs C) the more you owe, the higher your interest payment will be D) you can save money by making the smallest down payment the lender will allow

Recently the M&M Company has been having problems. As a result, its financial situation has deteriorated. M&M approached the First National Bank for a badly needed loan, but the loan officer insisted that the current ratio (now 0.5) be improved to at least 0.8 before the bank would even consider granting the credit. Which of the following actions would do the most to improve the ratio in the short run? *   a. Using some cash to pay off some current liabilities       b. Collecting some of the current accounts receivable.       c. Paying off some long-term debt.       d. Purchasing additional inventory on credit (accounts payable)

Which of the following statements (is) are TRUE about credit evaluation? 1. In terms of down payment, it follows that the higher the down payment, the higher will be the risk. II. The longer the term for the repayment period the more risky the transaction becomes especially if the unit is exposed to heavy depreciation like taxi or logging transportation III. In terms of the model in the sale of cars and trucks, there is a risk of product obsolescence. IV. The size of income is less important than the amount of money uncommitted to existing bills. O II and IV only OI, Il and II only O Il and IV only O l and II only O II, III and IV only

I am currently working on a study guide and came across the following question.  Which of the following statements correctly reflects the effects of granting credit to customers? a) total revenues may increase if both the quantity sold and the price per unit increase when credit is granted b) a firm's cash cycle generally increases if credit is granted, all else equal c) both the cost of default and the cost of discounts must be considered before granting credit d) a firm may have to increase its borrowing if it decides to grant credit to its new customers e) all of the above   My professor stated that the answer is all of the above, but after going through the readings and resources provided I could not find a way to understand how each answer is considered to be correct. I also e-mailed my professor and am waiting for a response, so I decided to post my question here as well.

Consider the 2013 rejected loan data from LendingClub titled “DAA Chapter 1-2 Data”. To prepare the dataset for analysis, let’s scrub the risk score data. First, because our analysis requires risk scores, debt-to-income data, and employment length, we need to make sure each of them has valid data. Open the file in Excel. Sort the file based on risk score and remove those observations (the complete row or record) that have a missing score or a score of zero, if needed. Assign each risk score to a risk score bucket similar to the chapter. That is, classify the sample according to this breakdown into excellent, very good, good, fair, poor, and very bad credit according to their credit score noted in Exhibit 1-13. Classify those with a score greater than 850 as “Excellent.” Consider using nested if–then statements to complete this. Or sort by risk score and manually input into appropriate risk score buckets. Run a PivotTable analysis that shows the number of loans in each…

How is your borrowing power affected when you are considered a "low risk"? There is a good chance that you will receive better loan terms and low interest rates. You might not qualify for a loan to buy a home, car, etc. You will have to pay higher interest rates. None of the above.

In the credit market model with asymmetric information, determine how a consumer will respond to an increase in the fraction of bad borrowers in the population. And discuss how the credit market model with asymmetric information shows how a financial crisis can reduce consumption.

What is the advantage of a variable-interest loan? Protects the borrower from rising interest rates Borrower can capitalize on a reference rate decrease Makes it easier for the borrower to plan for future payments Reduces the total interest payments Which of the following tools is used to analyze the industry attractiveness in the credit application process? PESTEL analysis Management analysis Ratios analysis SWOT analysis

Avoiding Overdraft Fees. You know someone who recently had $90 in overdraft fees for two small debit card transactions. Explain to him why such high fees resulted from such small transactions and the relative benefits of having an automatic funds transfer agreement versus an automatic overdraft loan agreement versus overdraft protection.