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A technique wherein attributes that are common to several types of an entity are grouped into their own entity, called a supertype, is called Answer

A technique wherein attributes that are common to several types of an entity are grouped into their own entity, called a supertype, is called

normalization.        generalization.        concatenation.        compound data type.        None of the above
The correct answer is  –  generalization

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Based on your reading and research, list at least five reasons why teams fail and discuss what can be done to prevent failure from happening Answer

Based on your reading and research, list at least five reasons why teams fail and discuss what can be done to prevent failure from happening.


Teams fail because of the following reasons:
1) Lack of team structure – Team structure helps the team to define their goals and approach, roles and responsibilities etc which helps them to define each one of their individual work scope or responsibility.
2) Lack of process an procedure in the project team – When there are no clear process defined for project communication, on how to run their meetings, make decisions, solve problems, or assign responsibilities, then it clearly leads to chaos in the team and the project team often finds themselves struggling for project milestone’s accomplishment and completion of tasks.
3) Lack of team building, collaboration and cooperation – When the project manager doesn’t spend enough time in team building and collaboration effort, it leads to unprofessional behaviour and conduct on the part of team members and often lead to team conflicts and issues.
4) Not investing in knowledge sharing and training, skill development – Some of the team members may feel left out if there is not much emphasis given to their training or skills building. This often leads to discontent among the team members leading to failure of the project team.
5) unable to adapt to Market Conditions and changes in the Company Policies –  At times, the project team can fail due to uncertainties or changes in market conditions and the failure of the project team to adapt to the changes may lead to too much of stress within the team and thus leading to team failure.




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MPS planners use what is referred to as time fences? What are they, and why are they used Answer

MPS planners use what is referred to as time fences? What are they, and why are they used? (Points : 20)

Ans: The inputs to MRP frequently change. This occurs in one of two ways: by recomputing the requirement and schedule periodically, often weekly, or via a “net change” calculation. Net change in an MRP system means the MRP system creates new requirements in response to trans-actions. However, many firms find they do not want to respond to minor scheduling or quantity changes even if they are aware of them. These frequent changes generate what is called system nervousness and can create havoc in purchasing and production departments if implemented. Time fences is particularly helpful when trying to reduce MRP system nervousness. Time fences allow a segment of the master schedule to be designated as “not to be rescheduled.” This segment of the master schedule is therefore not changed during the periodic regeneration of schedules.

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Effects of Categorization and social Influence on Decision Making Answer


It is well aware that individuals are social being who love to be surrounded by social groups. They like to interact with each other. In day to day life, we use cognitive process in understanding ourselves and others. It is known as social cognition process. As according to the social cognition process, an individual’s social behavior is not determined by the situation he or she is in. In fact, it is determined by the perception of the person. How he perceives it and reacts towards it. It affects our thinking, knowledge, and memory. The two main functions of cognitive process is perception and judgment. Perception is the process of selecting, organizing and interpreting or attaching meaning to the events happening in the environment through our five senses like sight, hear, taste, touch, and smell.It is the psychological process in which we perceive about other through their actions and interaction and make opinion about them. After perceiving the things, we use our knowledge, information and past experience in forming our opinion about ourselves and others who are in our surroundings. This is our cognitive process that helps us in forming the good and bad opinion and decision because sometimes, due to various reasons like cognitive dissonance, illusion of control, frequency, representatives, prior hypothesize, ego-defensiveness etc. leads the biasness and we make the wrong perception about us and others.

In general, categorization is a mental operation in which a brain classifies the objects and events on the basis of the same characteristics and traits in to one group. This categorization is based on the past knowledge and the theories. For example – personality of a person can split into two categories– introvert, and extrovert. The categorization influences the individual decision making through perception. This is based on impression formation that an individual perceives through his impression about the traits of the particular category and makes the decision making(Kihlstrom). For example – When we categories the personality into parts –introvert and extrovert, we form our opinion about the people as according to the trait of the category. Suppose we visit to a social gathering and we were aware that our one friend is introvert, we try to speak with him less because we are aware that he does not prefer to speak much because of his personality trait. Thus categorization helps us in understanding the people, the traits of the group or the category and it helps us in making our further decision. Beside it, categorization helps the doctors and psychiatrists to diagnosis their patient in better way and in prescribing the better treatment for them. Categorization is based on the theories which are done by the researchers. It is the result of their studies which comes after conducting the extensive results. But sometimes, it is also observed that there are high chances of stereotype error or biasness that influence the individual’s decision making(Kihlstrom). But it takes place when people have lack of knowledge about the group or the category and they make wrong opinion about the group. It further influence their decision making process and they make the faulty decisions.

Sometimes, the individual’s decision making is largely affected by others and it is known as social influence. It includes the direct and indirect influence both. Direct influence means when the decision of a person is largely influenced by the group decision making and indirect influence means when a person imagine how his friend or any relative will react in a particular decision and he always reacts in the same way. For example – if a group of the four people are asked to make their opinion about a particular topic. The group will follow the group decision making method to take decision. Individual member will ask to give their opinion and at last all the opinions are evaluated on the basis of its pros and cons and finally the best option is selected by the group members. But it is also found that group decision making affect the individual decision making and sometimes the individual member takes the decision under the pressure of the group irrespective of what he feels and thinks about the subject. In consumer buying habits, we can notice that people are influenced by the social interaction while making their purchasing. Suppose, a consumer wants to purchase the Television or fridge and he discuss the matter with his three or four friends and after listening their views about the brands and models of fridge, he would like to go for one which is suggested by the majority of his friends. It is the natural process that whenever we have high under social influence, our decision making approach is largely influenced by the group social group. But further the effects of social influence is largely depends on various individual and environment factors like emotional factors, educational and cultural factors (Loewenstein, 2000), past experience and the reliability of the individual on the social groups.

Thus after analyzing our cognitive process, social influence and categorization, we can say that all the social cognition plays a very important role in our life. Sometimes, we are able to judge others in the right way because we analyze the factors carefully and perceive the things accurately. But sometimes the cognitive bias misleads our decisions and creates misunderstanding about others. Like cognitive process, social influence and categorization is also helps us in making our decision. But it is always important to use our knowledge, information and past experience before making any opinion about us and others. Wrong perception can lead to the wrong judgment and wrong judgment can lead the wrong decision making. So we should ignore the importance of psychological process. In fact a good understanding helps us in perceiving the things in better way and can reduce the chances of biasness and error.



Loewenstein G, (2000). Emotions in Economic Theory and Economic Behavior. Am. Econ. Rev. 90. Pg. 426-432.

Kihlstrom J.F. An Introduction to Social Cognition. Retrieved on February 25th 2014 from



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Renfro Rentals has issued bonds that have a 10% coupon rate, payable semiannually. The bonds mature in 8 years Answer

Renfro Rentals has issued bonds that have a 10% coupon rate, payable semiannually. The bonds mature in 8 years, have a face value of $1,000, and a yield to maturity of 8.5%. What is the price of the bonds?


  Annual values Semi-annual Inputs
Years to Maturity 8 16
Coupon rate 10% 5%
Annual Payment $100 $50
Par value $1,000 $1,000
Going rate, rd 8.5% 4.25%
Value of bond = $1,084.59 $1,085.80

Since it is payable semiannually

So, Price of the bonds = $ 1085.80

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How does a company with debt, preferred stock, and common stock in its target capital structure calculate its weighted average cost of capital Answer

How does a company with debt, preferred stock, and common stock in its target capital structure calculate its weighted average cost of capital (WACC)?

WACC = wd rd(1-T) + wp rp + wcrs
rd=marginal debt capital
rp=marginal preferred stock
rs=marginal cost of common equity using retained earnings

The weighted average cost of capital (WACC) is calculated using the following formula: WACC = wdrd(1 – T) + wpsrps + wsrs, where wd is the percent of debt, rd is the interest rate on the firm’s new debt, T is the firm’s marginal tax rate, wps is the percent of preferred stock, rps is the yield investors expect on the preferred stock, ws is the percent of common equity (common stock), and rs is the rate of return investors expect from the firm’s common stock. The proportions of debt, preferred stock and common equity typically used in the formula are the target proportions to eliminate slight variability due to slight actual differences from the target proportions.
How is the weighted average cost of capital (WACC) used in a capital investment program to select investments?
The weighted average cost of capital (WACC) is a tool used to decide whether or not to invest. It represents the minimum rate of return at which a company produces value for its investors. If the companies return is more than the WACC than for each dollar the company invests it is creating value. Conversely if the company’s return is less than the WACC the company is shedding value and that investors should go in a different direction. Ultimately the WACC can serve as a solid indicator for investors but is not necessarily a commonly used tool because it requires detailed information about the company that may be difficult to acquire.
“The capital funding of a company is made up of two components: debt and equity. Lenders and equity holders each expect a certain return on the funds or capital they have provided. The cost of capital is the expected return to equity owners (or shareholders) and to debt holders, so WACC tells us the return that both stakeholders – equity owners and lenders – can expect. WACC, in other words, represents the investor’s opportunity cost of taking on the risk of putting money into a company.”

WACC is the sum of the cost of debt and the cost of equity. It is based on market values not book values and is based on management’s target capital goals. Because it is based on target, it is not explicit costs. This is the opportunity costs of raising a new dollar of capital; a marginal cost. WACC is compared to potential investments. If the projected return on the investment is less than WACC, the investment would reduce stockholder value and should be avoided.
WACC is used to find the required rate of return of the company’s investments. Because WACC is the return required by our investors and is the cost of acquiring the capital, it determines how much we must get back on our investment to make a profit on the investment. So the WACC helps determine the required rate of return on the securities they invest in.
WACC must comprise a weighted-average of the marginal costs of all sources of capital (debt, equity, etc.) since unlevered free cash flows represents cash available to all providers of capital.
WACC = E × re + D × (1 − t) × rd + P × rp
(E+D+P) (E+D+P) (E+D+P)
E = Market value of equity
D = Market value of debt
P = Market value of preferred stock
re = Cost of equity
rd = Cost of debt
rp = Cost of preferred stock
t = Marginal tax rate
The discount rate is a weighted-average of the returns expected by the different classes of capital providers (holders of different types of equity and debt), and must reflect the long-term targeted capital structure as opposed to the current capital structure. While a separate discount rate can be developed for each projection interval to reflect the changing capital structure, the discount rate is usually assumed to remain constant throughout the projection period.
While calculating the weighted-average of the returns expected by various providers of capital, market value weights for each financing element (equity, debt, etc.) must be used, because market values reflect the true economic claim of each type of financing outstanding whereas book values may not change.

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The Greek Connection had sales of $32 million in 2012, and a cost of goods sold of $20 million Answer

Week 7 Problem Set

Chapter 26 (page 903):

  1. Answer the following questions:
  2. What is the difference between a firm’s cash cycle and its operating cycle?
  3. How will a firm’s cash cycle be affected if a firm increases its inventory, all else being equal?
  4. How will a firm’s cash cycle be affected if a firm begins to take the discounts offered by its suppliers, all else being equal?


The Greek Connection had sales of $32 million in 2012, and a cost of goods sold of $20 million. A simplified balance sheet for the firm appears below:



Balance Sheet

As of December 31, 2012 (in $ thousand)

Assets Liabilities and Equity

Accounts receivable


$ 2,000



Accounts payable

Notes payable


$ 1,500



Total current assets


$  7,250


Total current liabilities

Long-term debt

$  3,720


Net plant, property,

and equipment


$  8,500

Total liabilities

Common equity

$  6,720


Total assets $ 15,750 Total liabilities and equity $ 15,750
  1. Calculate The Greek Connection’s net working capital in 2012.
  2. Calculate the cash conversion cycle of The Greek Connection in 2012.
  3. The industry average accounts receivable days is 30 days. What would the cash conversion cycle for The Greek Connection have been in 2012 if it had matched the industry average for accounts receivable days?



  1. Assume the credit terms offered to your firm by your suppliers are 3/5, Net 30. Calculate the cost of the trade credit if your firm does not take the discount and pays on day 30.


Chapter 27 (page 925):

  1. Which of the following companies are likely to have high short-term financing needs? Why?
  2. A clothing retailer
  3. A professional sports team
  4. An electric utility
  5. A company that operates toll roads
  6. A restaurant chain



  1. Sailboats Etc. is a retail company specializing in sailboats and other sailing-related equipment. The following table contains financial forecasts as well as current (month 0) working capital levels. During which months are the firm’s seasonal working capital needs the greatest? When does it have surplus cash?


To get the answer for the above tutorial, please click on the below purchase link :


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FIN 324 Final Exam Answer

Week One – Accounting Principles


  1. Please explain the following accounting concepts and give an example of how they relate to accounting information: Materiality, Consistency, and Full Disclosure.


Materiality principle. Accountants follow the materiality principle, which states that the requirements of any accounting principle may be ignored when there is no effect on the users of financial information. Certainly, tracking individual paper clips or pieces of paper is immaterial and excessively burdensome to any company’s accounting department. Although there is no definitive measure of materiality, the accountant’s judgment on such matters must be sound. For example, several thousand dollars may not be material to an entity such as Microsoft, but that same figure is quite material to a small, family-owned business.


To be useful, financial information must be relevant, reliable, and prepared in a consistent manner.   Consistent information is prepared using the same methods each accounting period, which allows meaningful comparisons to be made between different accounting periods and between the financial statements of different companies that use the same methods.


Full disclosure principle. Financial statements


normally provide information about a company’s past performance. However, pending lawsuits, incomplete transactions, or other conditions may have imminent and significant effects on the company’s financial status. The full disclosure principle requires that financial statements include disclosure of such information. Examples are footnotes supplement financial statements to convey this information and to describe the policies the company uses to record and report business transactions.


  1. What would happen if all of the steps of the accounting cycle were not completed in a specific accounting period? What would be the impact on the company’s balance sheet and net income if a company did not set up a necessary receivable at the end of the accounting period?


Step one of the accounting cycle is to analyze transactions and determine how those transactions affect the accounting equation. Accountants analyze transactions using debits and credits.   The second step is record the effects of transactions using journal entries Journal entries are the accountant’s way of recording the debit and credit effects of both simple and complex business transactions.   The third step is summarizing the resulting journal entries through posting and prepares a trial balance. Once journal entries are made, their effects must be sorted and copied, or posted, to the individual accounts. The fourth step is to prepare the report.   Accounting is designed to accumulate


and report in summary form the results of a company’s transactions, thereby transforming the financial data into useful information for decision making.


Some economic activities, such as the growth in the amount of interest a company owes, happen gradually. Without special adjustments, the accounting records would not reflect the impact of these gradual activities. Adjusting entries must be made at the end of each accounting period to ensure that all balance sheet and income statement items are stated at the correct amount.


All businesses, periodically issue their financial statements so that users can make sound economic decisions. Current owners, investors, and bankers, and need up-to-date reports in order to compare and judge a company’s financial position and operating results on a continuing, timely basis. They need to know the financial position of a company (from the balance sheet), the relative success or failure of current operations (from the income statement), and the nature and extent of cash flows (from the statement of cash flows).   Delays would be in violation of reporting guidelines and may carry substantial costs.


Week Two – Principles of Financial Statement Preparation


  1. What at the primary financial statements and how do the statements tie together?


Primary financial statements are income statement, balance sheet, and cash flow statements.   The income statements’ revenue and expense illustrate


the changes in assets and liabilities on the balance sheet. Cash assets and cash and cash equivalents on a balance sheet are reflected on the statements of cash flows. Also, the statements of cash flows present additional data on cash assets displayed on the balance sheet.

Managers use a few significant ratios to summarize the firm’s leverage, liquidity, efficiency, and profitability. They may also combine accounting data with other data to measure the esteem in which investors hold the company or the efficiency with which the firm uses its resources.


  1. What is the basic accounting equation? How is equilibrium maintained if overall liabilities decrease (what has to happen to assets or equity)?


Assets – Liabilities = Equity.   This equation is the basis for the most basic of accounting reports, the suitably named balance sheet. A balance sheet reports what a business have possession of (assets), what is in debt (liabilities) and what the remainder is for the owners (equity) as of a definite date. This equation should be in balance.


Week Three – Financial Statement Analysis


  1. What types of ratios would a credit analyst at a bank tend to focus on when deciding whether to give a company a loan (name a specific ratio)? What ratios would a financial manager focus on in order to manage a company (name at least two specific ratios)?


I would use debt ratio by comparing the amount of liabilities with the amount of assets


indicates the extent to which a company has borrowed money to leverage the owners’ investments and increase the size of the company. As a frequently used measure of leverage, debt ratio computes the total liabilities divided by total assets. A perceptive interpretation of the debt ratio is that it represents the proportion of borrowed funds used to acquire the company’s assets.


Price-earnings ratio is a measure of growth potential, earnings stability, and management capabilities; computed by dividing market value of a company by net income and current ratio, a measure of the liquidity of a business; equal to current assets divided by current liabilities.


  1. How can operating leverage be used to increase a company’s profitability?


A measurement of the degree to which a firm or project incurs a combination of fixed and variable costs. A company that makes few sales is highly leveraged.   A business that makes many sales is less leveraged.   As the volume of sales in a business increase, each new sale contributes less to fixed costs and more to profitability.


Week Four – Managerial Accounting


  1. Why is good working capital management important? What are some working capital strategies used in your organization (or an organization you’ve worked for in the past)?


A measure of a company’s efficiency and short-term financial health; a company’s working capital an d calculated as Working capital = Current Assets – Current Liabilities




Positive working capital means that the company is able to pay off its short-term liabilities, whereas negative working capital means that a company is unable to meet its short-term liabilities out of its current assets (cash, accounts receivable, and inventory). Working capital also is referred to as net working capital.


Ongoing improvements include Online Paying and Collection (OPAC OPAC – Online Public Access Catalog ), which was implemented at all DFAS locations, with authorization from the Department of the Treasury where needed. The implementation resulted in a 50 percent reduction in manual billings produced by GSA for the FTS area. The reduction in manual billings and the use of OPAC decreased the GSA accounts receivables from $192.4 million in July 2000 to $103.3 million in September 2001. Delinquent Department of Defense (DoD) bills were reduced by 44 percent, which increased GSA’S working capital fund and increased GSA’S ability to reimburse its vendors. Along with this increase in electronic commerce, the chargeback percentage of OPAC transactions decreased from 22 percent in January 2001 to 3 percent by July 2001.


  1. How is a car loan an example of the time value of money? Under what circumstances should an individual take out a loan versus pay all cash?


Time value of money (TVM) is the process of calculating the value of an asset in the past, present or future. It is based on the premise that the original


principal will increase in value over time by interest. This means that a dollar invested today is going to be worth more tomorrow. Principal is the amount of money borrowed today. You buy a car today for $10,000 of which you borrow $8,000.00 from the bank and pay $2,000.00 of your own money: the $8,000.00 is the principal of the car loan. The $2000.00 is the principal.


You should never pay cash for a car. Instead of using your savings for the purchase of a car this will decrease your assets and increase your liabilities, wait until your assets generate monthly cash-flow and then purchase a car. That way the cash-flow from your assets will finance your liabilities. Also, your payment remains fixed and you will be paying with deflated dollars over time, assuming you stretch it out. This is why businesses never pay cash for anything, because they understand the economics.


Week Five – Principles of Finance


  1. What is the difference between stocks and bonds? Which represents more risk to the company? Why?

Stocks are EQUITY. They represent shares of ownership in a Corporation. A Stockholder is actually one of many owners of a Publicly Owned Corporation. If a Corporation dissolves for any reason owners of Common Stock (the main type of stock issued) receive the value of the sold assets of the Corporation AFTER everyone else is paid, including the IRS, Employees, Bonds, Accounts Payable, etc.

Bonds are DEBT. They are sold by


the Corporation in order to raise money for various purposes for use by the company. Bonds offer an interest rate to the Bondholder for the period of time that the Bondholder owns the bonds.

Since bonds do not represent ownership, the bondholder could lose their investment if the Corporation dissolves, but are paid BEFORE owners of stock. Bonds are not risky as they have a set payment schedule so there are no surprises. There is no such guarantee with stocks.

  1. Does a company receive money when its stock is traded in the secondary market? How does the company affect the price of its stock? Why is a company concerned about its stock price in the secondary market?


No, a company does not receive money when its stock is traded in the market. The company only receives funds in the initial public offering. The company affects the price of its stock by its financial management and performance (increasing revenues, net income, issuing dividends, making strategic investments, reducing debt, etc.), and by keeping the market informed about its accomplishments. The company is concerned about its stock price in the secondary market because it affects the company’s ability to issue more stock in the future (if needed to grow), the company’s ability to borrow in the future, the net worth of shareholders, the value of stock options (if provided as compensation to key employees), and the company’s ability to make acquisitions of other companie

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What can we do as managers to encourage ethical behavior and to raise ethical standards in our organizations Answer

What can we do as managers to encourage ethical behavior and to raise ethical standards in our organizations?    

What we can do as managers to encourage ethical behavior is that we should try to practice by example the ethical means that the company believes in. By being an example means not to strictly follow them literally and punish those who does not follow. Rather, we should give them a thorough lesson on why and how the organization is doing this ethical belief. I strongly believe that verbal communication is the best way to organize a team or department and not simply emailing them and scolding them without any initial approach. I believe as managers we need to be more involved not just with executives, but also employees who work under us. We need to make sure that people are being held accountable for their actions. Company policies should be reviewed more than just once a year for compliance standards. Ethical behavior can be encouraged through pro-active measures such as addressing ethical issues early before things escalate.


We should do the following as managers to encourage ethical behavior and to raise ethical standards in our organizations:

1) CanGo should come out with the code of ethics for the employees and managers to follow. The code of ethics should be available to all employees either on the company’s website or on the company’s intranet.

2) Business ethics training should be provided to all employees to make them aware of all the points and aspects of code of ethics.

3) Ethics training should be substantiated with proper case study and real life examples so that it is easier for all the employees to relate those situations to their working environment.

4) It should be mandatory for everyone in the organization to undergo this ethics training and also to have proper assessment done on Business ethics.

5) There should be Top management focus on the Business ethics so that all employees in the company understand the essence and business significance of Business Ethics.

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Explain why transport rates typically vary by 1) the weight of the shipment; 2) the distance a shipment is transported Answer

Explain why transport rates typically vary by 1) the weight of the shipment; 2) the distance a shipment is transported; and 3) the value of the transport service. Provide an example of how these variables affect a shipping rate.


Transportation rate depends on various factors such as product characteristics, weight of the products, distance and value of the transport service e.g. whether it is by air, land or water. There are different kinds of products e.g. chemicals, petroleum products and machine parts that need to be transported and rates would vary for all of them according to their makeup. A product weighing 200 pounds may cost $100.00 per hundredweight, while 1000 pounds of this product going to the same destination may only cost $50 per hundredweight. Higher dense products would be charged lesser compared to low dense products because the amount of space required for the same weight would be much larger in the case of lower dense product as compared to high dense product. But this method of calculating transportation rate based on the product characteristics, weight, and distance could become very complex as there could be ‘n’ nos. of combinations and this could be very tricky to calculate and keep track of so many transportation rates. So, a simpler method of rate determination needed for the transport community. This was accomplished through the class rate system, which simplified each of the three primary rate factors—product, weight, and distance. One widely used system for simplifying the number of products is the National Motor Freight Classification (NMFC), which has 18 separate ratings, or classes, from 500 to 354; the higher the rating, the greater the relative charge for transporting the commodity.