{"id":967,"date":"2016-05-25T21:36:22","date_gmt":"2016-05-25T11:36:22","guid":{"rendered":"http:\/\/casestudyhelp.com\/sample-questions\/?p=967"},"modified":"2018-01-23T22:58:43","modified_gmt":"2018-01-23T11:58:43","slug":"jwi-530-financial-management-assignment-help","status":"publish","type":"post","link":"https:\/\/casestudyhelp.com\/sample-questions\/jwi-530-financial-management-assignment-help\/","title":{"rendered":"JWI 530: Financial Management Assignment Help"},"content":{"rendered":"

Management Accounting Application<\/span><\/h2>\n

Case Analysis 1<\/strong> \u2013 Weight 20% of total assignment
\nYou work for a small, local telecommunications company. In five years, the company plans to undertake a
\nmajor upgrade to its servers and other IT infrastructure. Management estimates that it will need up to
\n$450,000 to cover all related costs; however, as a fairly young company, the goal is to pay for the
\nupgrade with cash and not to take out loans.
\nRight now, you have $300,000 in a bank account established for Capital Investments. This account pays
\n6% interest, compounded annually.
\nA member of the finance department has approached you with an investment opportunity for the
\n$300,000 that covers a five-year period and has the following projected after-tax cash flows<\/p>\n

Year Projected Cash
\nFlow
\n1 $94,000
\n2 $114,000
\n3 $134,000
\n4 $114,000
\n5 $94,000
\nBased on this information, answer the following questions:
\n1) How much money will be in the bank account if you leave the $300,000 alone until you need it in five
\nyears?
\n2) If you undertake the investment opportunity, what is the Nominal Payback Period?
\n3) Using the factors for 6%, what is the Discounted Payback Period?
\n4) What is the Net Present Value of this investment opportunity?
\n5) Which option \u2013 make the investment or leave the money in a savings account \u2013 would you
\nrecommend to your CEO? Why? What additional factors\/information might make you change your
\npoint of view?<\/p>\n

\"CLICK<\/a><\/p>\n

Case Analysis 2<\/strong> – Weight 30% of total assignment
\nThe CEO of Dynamic Manufacturing was at a conference and talked to a supplier about a new piece of
\nequipment for its production process that she believes will produce ongoing cost savings. As the
\nOperations Manager, your CEO has asked for your perspective on whether or not to purchase the
\nmachinery.
\nAfter talking to the supplier and meeting with your Engineers and Financial Analysts, you\u2019ve gathered the
\nfollowing pieces of data:
\n\u2022 Cost of Machine: $150,000
\n\u2022 Estimated Annual After Tax Cash Flow Savings: $65,000 (which may or may not grow)
\n\u2022 Estimated machinery life: 3-5 years (after which there will be zero value for the equipment and no
\nfurther cost savings)
\n\u2022 You seem to recall that Dynamic\u2019s Finance organization recommends either a 10% or a 15%
\ndiscount rate for all Cost Savings Projects.
\nFrom your JWMI MBA, you understand that you need to understand the project financials to ensure that
\nthis investment will be economically attractive to Dynamic Manufacturing\u2019s shareholders.<\/p>\n

Calculate the Nominal Payback, the Discounted Payback, the Net Present Value and the IRR (so 4
\nanswers for each scenario) assuming:
\n\u2022 Alice (A) recommends using the base assumptions above: 3 year project life, flat annual savings,
\n10% discount rate
\n\u2022 Bill (B) recommends savings that grow each year: 3 year project life, 10% discount rate and a
\n10% compounded annual savings growth in years 2 & 3. In other words, instead of assuming
\nsavings stay flat, assume that they will grow by 10% in year 2, and then grow another 10% over
\nyear 3 in year
\n\u2022 Carla (C) believes we use a higher Discount Rate because of the risk of this type of project: 3
\nyear project life, flat annual savings, 15% discount rate.
\n\u2022 Danny (D) is convinced the machine will last longer than 3 years. He recommends using a 5 Year
\nEquipment Life: 5 year project and savings life, flat annual savings, 10% discount rate. In other
\nwords, assume that the machine will last 2 more years and deliver 2 more years of savings.
\nDiscussion \u2013 in a Word Document in paragraph form, respond to the following:
\n1) Which person\u2019s scenario would you present to management and why? From a strictly financial
\n(numbers) perspective, would you recommend this purchase to management?
\n2) In your opinion, which person\u2019s scenario is the most aggressive (i.e., is based on the most
\naggressive assumptions)? If you were to select this scenario as the basis for your proposal, how
\nwould you justify the more aggressive assumptions?
\n3) In SIMPLE English (as in talking to a non-Finance and non-MBA person), explain why there is
\nvalue to management in running all 4 of these scenarios.<\/p>\n

4) Beyond financial measures, what other considerations would you want to consider, before making
\na recommendation to management?
\n5) If you were the CEO, would you approve this proposal? Why or why not?<\/p>\n

Case Analysis 3<\/strong> \u2013 Weight 40% of total assignment
\nYou are the General Manager at the Bicker, Slaughter, and Lynch Law Firm. There is an opportunity to
\nbuy out a small law firm that was just started by a young MBA\/JD, and you believe the firm can be grown
\nand become a lucrative part of your Firm.
\nWith help from your finance leader, you have estimated the following benefit streams for this new division:
\nYou estimate that the purchase price for this firm would be $200,000 and that additional net working
\ncapital would be needed in the amount of $60,000 in year 0, an additional $20,000 in year 2 and then
\n$20,000 in year 5.
\nBSL usually spend about $275,000 per year in advertising. If you make this acquisition, you would ask
\nthat advertising spending be increased by an incremental one-time amount of $50,000 in year 0 to
\npublicize the firm\u2019s expansion.
\nYour finance leader has indicated that the firm has access to a credit line and could borrow the funds at a
\nrate of 6%. He also mentions that when he runs project economics for capital budgeting (such as a new
\ncopier or a company car), he recommends a standard 10% rate discount, but the one other time they
\nlooked at an acquisition of a smaller firm, he used a 12% rate discount. Obviously you will want to select
\nthe most appropriate discount rate for this type of project.
\nYear 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
\nBefore Tax
\nCash Flow
\nFrom
\nOperations $(149,000) $0
\n$51,380
\n$88,760
\n$114,100
\n$129,780
\n$143,640
\n$167,300
\nAfter Tax
\nNet Income
\nFrom
\nOperations $(103,500)
\n$(50,500)
\n$36,700
\n$63,400 $81,500 $92,700
\n$102,600
\n$119,500
\nAfter Tax
\nCash Flow
\nFrom
\nOperations $(85,600) $15,000
\n$48,600
\n$72,200 $95,550
\n$101,300
\n$125,200
\n$140,200
\nJWI 530: Financial Management I
\nAssignment 2<\/strong>
\n\u00a92016 Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information
\nand may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of
\nStrayer University. This course guide is subject to change based on the needs of the class.
\nPage 4 of 5<\/strong>
\nAt the end of 8 years, the plan will be to sell this division. The estimated terminal value (the sale and the
\nreturn of working capital) is conservatively estimated to be $300,000 of after-tax cash flow help.
\nUsing the data that you need (and ignoring the extraneous information), calculate the Nominal Payback,
\nthe Discounted Payback, the Net Present Value, and the IRR for this potential acquisition.
\nDiscussion \u2013 in a Word Document in paragraph form, respond to the following:
\n1) From a purely financial (numbers) perspective, would you recommend this purchase to
\nmanagement? Why?
\n2) What are some of the non-financial elements that need to be considered for this proposal?
\n3) Assumptions in project economics can have a huge impact on the result. Identify 3 financial
\nelements\/assumptions in your analysis that would make this project not be financially attractive
\n(e.g., answer this question: what would have to be true for this to be a bad investment?).
\n4) If you were the CEO, would you approve this proposal? Why or why not?<\/p>\n

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