Five Step Decision Making Process

Using the Five Step Decision Making Process presented in Chapter 1, examine a recent decision you made (e.g., go to college, take a new job, buy a house, or buy a phone). Identify each step of your decision by the criteria of this process.

1. Identify the problem and uncertainties

2. Obtain information

3. Make predictions about the future

4. Make decisions by choosing among alternatives

5. Implement the decision, evaluate performance and learn.

Accounting Paper

Use the company you for work or select a public company, and analyze the methods of operational and financial leverage that should be considered in determining whether to acquire another organization. Financial leverage includes internal financing, equity financing, bond financing, reducing dividends to increase internal cash flow, and using leasing to acquire capital assets with more leverage, thus conserving cash flow.

Operational leverage should discuss the appropriate cost of capital tools, including weighted average cost of capital and the capital asset pricing model. Interpret the various operational risks and how to mitigate them in your selection of operational and financial leverage decisions.

Describe any intangible and non-financial factors that affect your proposed financing and operational financing decisions. Present a recommended solution and the rationale behind your decision. Keep in mind that your solution may be a combination of operational and financial leverage.

computerized accounting system

For this week’s Discussion, research the most common threats to a computerized accounting system using the Internet and/or Strayer databases. Be prepared to discuss.

Upon examination of the greatest threats to a computerized accounting system, suggest two (2) preventive measures or remedies that protect the system and/or mitigate any negative impacts to the system. Provide a rationale for your response.

Your boss is concerned that the company’s computerized accounting system is vulnerable to attack. After reviewing the system, you’re in agreement. Write a brief report (approximately one [1] paragraph in length) of how someone might hack into your systems and commit fraud with the accruals. What major damages to the company’s financial statements could result from such a fraud?”

Compensation and Lending Decisions

“Compensation and Lending Decisions”  Please respond to the following:

  • 1. Compare and contrast compensation plans, such as restricted stock and stock appreciation rights, indicating the key differences with the accounting treatment. Determine the option that would have the least impact on a company’s earnings. Recommend the choice that is the most advantageous to an employee. Support your position with examples.
  • 2. Given the current regulatory environment for financial institutions, analyzing financial statement information is an important process and at the same time, the massive amount of information that creditors have to sort through can become unwieldy. Choose three or four financial ratios that creditors would mostly likely use to make their lending decisions. Indicate a rationale for choosing each ratio. Discuss at least three ways that management might manipulate the financial data to guarantee that the lending decision will be made in its favor. Provide specific examples.

Investment Strategy

“Investment Strategy”  Please respond to the following:

  • evaluate at least two companies’ financial statements that have received a negative rating from one of the financial rating agencies. Determine which financial ratios most likely impacted the rating decision. Compare and contrast at least two financial ratios that support the rating agency’s claims. Speculate on how the ratios are likely to change considering the economic environment in which it operates. Support your position.
  • Imagine that you are a chief financial officer with $150,000 of idle cash that you must invest to increase earnings for your company. Select at least two companies and the ratios you would use to determine your investment strategy. Based on the companies you choose, speculate on how the ratios are likely to change over the next five years.

Managerial Accounting

1. Briefly discuss the purpose and role that each type of financial institutions (depositary, contractual, and investment) play in the U.S. economy. How do each of these institutions intersect with the various types of markets, i.e., capital, money, spot (cash), derivatives, Forex and Interbank, primary, and secondary (inclusive of OTC)?

2. Select a publicly traded firm of your choice that enjoys a large shareholder base. What challenges may this firm have encountered (or is likely to encounter) in terms of (a) incorporating ethics into financial management practices, and (b) maintaining/sustaining ethical practices in the face of internal or external (market) pressures? What would you do if you encountered an unethical situation at work? Frame your response relative to the financial manager’s fiduciary duty to maximize shareholder’s wealth.

Finance Unit 5 Discussion

There are many factors influencing the cost of money for both individuals and corporations. Suppose you deposit money in an interest bearing account and at the same time borrow a bit of money from the same bank.

  • In which account would the bank apply quarterly compounding factors versus simple interest?
  • Explain your choices and your reasoning. You may want to check your personal accounts in regard to this type of transaction.