Westfield Industries has $8 billion in assets, $6 billion in equity, and earned a profit of $180 million last year during strong market conditions. The CEO proposes increasing executive compensation packages by 30% citing strong leadership performance. As a member of Westfield's compensation committee, how would you respond to this proposal?
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- Please give me answer Accountingwhat will be the new ROE'?In the following scenario you are the CEO of a corporation (please answer A, B & C) Your company consists of 500 employees and recorded a net profit in 2021 of $9M. You notice your call center (75 employees) seems to be taking up a substantial amount of expense, as it accounted for $3M. You have the option to outsource the call center, costing the 75 employee's their jobs, but saving you $2.5M a year in expense. What do you do; keep the 75 employees at the current salary or outsource the department to save $2.5M annually? Why did you pick what you did? Same question as above, except your 2021 net profit was $1M. Do you outsource to shed $2.5M in expense? Why or why not? Were your answers to A & B the same or different? Did your answers contradict which group you picked in your initial post?
- Barb is asked to analyze a new software firm. This year the firm has total revenues of $110 million and expenses (excluding interest payments) of $50 million. The firm has $90 million of capital, of which $30 million is in debt financed at an 8% annual interest rate and the rest is equity. Barb estimates that the cost of equity capital here is 15%. Barb determines this firm has accounting profi of [Select] [Select] economic profit of [Select] a good use of capital. く andLast year Jandik Corp. had $295,000 of assets (which is equal to its total invested capital), $18,750 of net income, and a debt-to-total-capital ratio of 37%. Now suppose the new CFO convinces the president to increase the debt-to-total-capital ratio to 48%. Sales, total assets, and total invested capital will not be affected, but interest expenses would increase. However, the CFO believes that better cost controls would be sufficient to offset the higher interest expense and thus keep net income unchanged. By how much would the change in the capital structure improve the ROE? Do not round your intermediate calculations.To estimate Missed Places Inc.'s (MP) external financing needs, the CFO needs to figure out how much equity her firm will have at the end of next year. At the end of the most recent fiscal year, MP's retained earnings were $158,000. The Controller has estimated that over the next year, gross profits will be $360,700, earnings after tax will total $21,400, and MP will pay $12,400 in dividends. What are the estimated retained earnings at the end of next year? (Please show work and explain) Intellus has long-term debt of $5 million, owners' equity of $7.75 million, current assets of $1 million, gross fixed assets of $20 million, and accumulated depreciation of $7 million. What is the firm’s net working capital? (Please show work and explain)
- provide correct optionSuppose the Board of Directors of Baldwin mandates that management take measures to increase financial leverage next year. Assuming revenue and profits remain the same, and assets are reduced by 20% through efficiency gains. What will the next year's ROE be if leverage increases by 20%? Baldwin currently ROE is 3.1 Group of answer choices A) 7.8% B) 12.9% C) 4.65% D) 10.3%Suppose that as a financial manager you have collected the following information on your company: Company Financial Information Financial Element Cost Before-tax cost of debt 6.5% Tax rate 40% Total long-term debt $400,000 Cost of preferred stock 7.25% Total preferred stock $50,000 Cost of common stock 11% Total common stock $500,000 Finance utilized $850,000 The firm is considering undertaking a project that costs $250,000 with an expected return of 13.5%. Address the following in your initial post: How much new capital is needed? Not having enough existing capital, how would you recommend going about obtaining the additional funds? Calculate and use the current WACC in your analysis. Discuss how the current WACC will change based on the type of financing chosen.
- Each of the following scenarios requires the use of accounting information to carry out one or more of the following managerial activities: (1) planning, (2) control and evaluation, (3) continuous improvement, or (4) decision making. a. MANAGER: At the last board meeting, we established an objective of earning an after-tax profit equal to 20 percent of sales. I need to know the revenue that we need to earn in order to meet this objective, given that we have 250,000 to spend on the promotional campaign. Once I have estimated sales in units, we then need to outline a promotional campaign that conforms to our budget and that will take us where we want to be. However, to compute the targeted sales revenue, I need to know the unit sales price, the unit variable cost, and the associated fixed production and support costs. I also need to know the tax rate. b. MANAGER: We have problems with our procurement process. Our accounts payable department is spending 80 percent of its time resolving discrepancies between the purchase order, receiving order, and suppliers invoice. Incorrect part numbers on the purchase orders, incorrect quantities ordered, and wrong parts sent (or the incorrect quantity) are just a few examples of sources of discrepancies. A complete redesign of the process has been suggested, which will allow us to eliminate virtually all of the errors and, at the same time, significantly reduce the number of clerks needed in purchasing, receiving, and accounts payable. This redesign promises to significantly reduce costs, decrease lead time, and increase customer satisfaction. c. MANAGER: This overhead cost report indicates that we have spent significantly more on inspection, purchasing, and production than was budgeted. An investigation has revealed that the source of the problem is faulty components from suppliers. A supplier evaluation has revealed that by selecting five suppliers with the best quality records (out of 15 currently used), the number of defective components will be dramatically reduced, thus producing significant overhead savings by reducing the demand for inspections, reordering, and rework. d. MANAGER: A large local firm has approached me and has offered to sell us one of the components used in our small enginesa component that we are currently producing internally. I need to know costs that we would avoid if this component is purchased so that I can assess the economic merits of this offer. e. MANAGER: Currently, our deluxe lawn mower is losing money. We need to increase profits. I would like to know how much our profits would be if we reduce our variable costs by 50 per mower while maintaining our current sales volume. Also, marketing claims that if we increase advertising expenditures by 1,000,000 and cut prices by 15 percent, we can increase the number of mowers sold by 25 percent. I would like to know which approach offers the most profit, or if a combination of the approaches may be best. f. MANAGER: We are implementing a major quality improvement program. We will be increasing the investment in prevention and detection activities with the expectation of driving down both internal and external failure costs. I expect to see trend reports for all categories of quality costs. I want to see if improving quality really does reduce costs and improve profitability. g. MANAGER: Our engineering design department has proposed a new design for our product. The new design promises to reduce post-purchase costs and, as a consequence, increase market share. I need to know the cost of producing this new design because it uses some new components and requires some different manufacturing processes. I would then like to have a projected income statement based on the new market share and new production costs. The planned selling price will be the same, or maybe even 10 percent lower. Projections based on the two price scenarios would be needed. h. MANAGER: My engineers have said that by redesigning our two main production processes, we can reduce move time by 90 percent and wait time by 85 percent. This would decrease cycle time and virtually eliminate the need to carry finished goods inventories. On-time deliveries would also increase dramatically. This would produce cost savings of nearly 20,000,000 per year. Market share and revenues would also increase. Required: 1. Describe each of the four managerial responsibilities. 2. Identify the managerial activity or activities applicable for each scenario, and indicate the role of accounting information in the activity.Bhupat bhaiam. 121.



