Science For Everyday

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timer Asked: May 19th, 2015

Question Description

MT 217 Unit 3-5.docx

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Financial Statement Analysis To illustrate your knowledge, please take time to provide evidence that shows how you formulated your answers by citing sources to justify your response. In this module you learned about the preparation and content of financial statements. A common phrase in finance is Cash is King! With this in mind, the Statement of Cash Flows has been heralded as the most important financial statement. The Statement of Cash Flows on page 2.1.6 presents how changes in Balance Sheet accounts will affect a company’s cash balance. Refer to that information and discuss how an increase in your company's accounts payable from one period to the next is a means to maintain high cash balances in your company’s bank account. Do you believe there are any ethical considerations in slowing payments to your suppliers for the sake of increasing your company's bank balances? 4. Basic Time Value of Money It is a common fact that many lottery winners are “broke” sooner than later. If you won a $1,000,000 lottery, would you want to collect the lump sum winnings today or receive the monies over time? How does your decision influence the ultimate amount of cash you will collect? Explain the TVM factors you would consider as you make this decision. 5. Advanced Time Value of Money An advertised monthly lending rate of 0.9% is about 11% per year. This difference between an advertised rate and the annualized rate is based on finer TVM details that may be overlooked by borrowers. Discuss how you may have used TVM in a recent investment or loan decision and explain some of the TVM details that may have been involved in your transaction. If you have not used TVM in the past financial transactions what practical TVM application would you expect to encounter in your future. 6. Annuities Systemic risk evaluates the probability and extent of negative consequences to the larger body. For example, the government has a record of intervening in the event of a probable bank failure; the government’s larger concern is the negative impact on bank customers. Some call this a government bail-out. Discuss the effect on stock market investor confidence should bank customers, individuals and businesses alike, lose access to savings and undergo a loss of future purchasing power due to a bank failure.
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