Management Answers

difference between wrong decisions and bad decisions ?

What business tactics was used by IBM when they bought the components from Intel and microsoft

1. Introduced Rs500000 through a cheque by the Owner as the Initial capital in the business

2. Purchased goods on credit from Ms. Ritu at Rs 40000

3. Paid Rs 10000 as salary to the employees

4. Invested Rs200000 in a fixed deposit account

5. Paid school fees of the kid Rs 25000, from the business’s bank account.

you work as avise president of a telecom company. after number portability was introduced a lot of your customers have left you and have taken the services of other telecom firmss. you are worried and so is your yop management of the company. they have given you a deadline, either to reduce the customer churn or face consequences. this is a major kpi in your performance appraisal this year. how will he proceed to build a loyalty program for his customers?

An investigation into the relationship between the price of fixed interest stock and the prime lending rate was conducted over 12 randomly chosen days. The following results were obtained.

Price of fixed interest stock 56 58 57 56 55 55 56 54 56 55 64 69

Prime lending rate (%) 8.7 8.7 9.0 9.6 10.0 9.6 9.5 10.5 8.4 9.0 8.0 7.0

a) Does the price of fixed interest stock depend on the prime lending rate or does the prime lending rate depend on fixed interest stock? Also what kind of a relationship is expected between the two variable? [2 marks]

b) Compute SSxx, SSyy, and SSxy [6 marks]

c) Find the least-squares regression line for this data. [6 marks]

d) Estimate the price of the stock when the rate of interest is 8.5%. [1 mark]

e) Find the product moment coefficient of correlation and comment [3 marks]

f) Find the coefficient of determination and interpret it. [2 marks]

Which one of the following are NOT criteria Robertson and Cronje, from Big Blue, would have used to determine whether a good idea is an investment opportunity?

A 5-year project will require an investment of $100 million. Plant and machinery worth $80 million and a net working capital of $20 million.

80,000 new common shares are issued, the market price of which is $500 per share. Shares will offer a dividend of $4 per share in year 1, expected to grow at a rate of 9% per year for an indefinite tenure. Remaining funds are borrowed by issuing 5-year, 9% semi-annual bonds, each bond having a face value of $1,000. These bonds now have a market value of $1,150 each. At the end of 5 years, fixed assets will fetch a net salvage value of $30 million, whereas the net working capital will be liquidated at its book value. The project is expected to increase revenues of the firm by $120 million per year. Expenses, other than depreciation, interest and tax, will amount to $80 million per year. The firm is subject to a tax rate of 30% Plant and machinery will be depreciated at the rate of 25% per year as per the written-downvalue method.

Calculate:

1. OCF for years 1 through 5
2. TCF

A 5-year project will require an investment of $100 million. Plant and machinery worth $80 million and a net working capital of $20 million.

80,000 new common shares are issued, the market price of which is $500 per share. Shares will offer a dividend of $4 per share in year 1, expected to grow at a rate of 9% per year for an indefinite tenure. Remaining funds are borrowed by issuing 5-year, 9% semi-annual bonds, each bond having a face value of $1,000. These bonds now have a market value of $1,150 each. At the end of 5 years, fixed assets will fetch a net salvage value of $30 million, whereas the net working capital will be liquidated at its book value. The project is expected to increase revenues of the firm by $120 million per year. Expenses, other than depreciation, interest and tax, will amount to $80 million per year. The firm is subject to a tax rate of 30% Plant and machinery will be depreciated at the rate of 25% per year as per the written-downvalue method.

Compute the FCF for years 1 through 5

A major law firm has entered into a contract with Healthy Eats, an independent catering company, to provide daily meals for the employees and visitors to the law firm. The law firm has __________________ its catering needs to Healthy Eats.