KLE Co The following scenario relates to questions...

The following scenario relates to questions 11 to 15.

The following information relates to an investment project which is being evaluated by the directors of Fence Co, a listed company. The initial investment, payable at the start of the first year of operation, is $3·9 million.

The directors believe that this investment project will increase shareholder wealth if it achieves a return on capital employed greater than 15%. As a matter of policy, the directors require all investment projects to be evaluated using both the payback and return on capital employed methods. Shareholders have recently criticised the directors for using these investment appraisal methods, claiming that Fence Co ought to be using the academically-preferred net present value method.

The directors have a remuneration package which includes a financial reward for achieving an annual return on capital employed greater than 15%. The remuneration package does not include a share option scheme.

What is the payback period of the investment project?

A.2·75 years

B.1·50 years

C.2·65 years

D.1·55 years

Which of the following statements about investment appraisal methods is correct?A.The return on capital employed method considers the time value of money

B.Return on capital employed must be greater than the cost of equity if a project is to be accepted

C.Riskier projects should be evaluated with longer payback periods

D.Payback period ignores the timing of cash flows within the payback period

Which of the following statements about Fence Co is/are correct?

(1) Managerial reward schemes of listed companies should encourage the achievement of stakeholder objectives

(2) Requiring investment projects to be evaluated with return on capital employed is an example of dysfunctional behaviour encouraged by performance-related pay

(3) Fence Co has an agency problem as the directors are not acting to maximise the wealth of shareholders

A.1 and 2 only

B.1 only

C.2 and 3 only

D.1, 2 and 3

Which of the following statements about Fence Co directors’ remuneration package is/are correct?

(1) Directors’ remuneration should be determined by senior executive directors

(2) Introducing a share option scheme would help bring directors’ objectives in line with shareholders’ objectives

(3) Linking financial rewards to a target return on capital employed will encourage short-term profitability and discourage capital investment

A.2 only

B.1 and 3 only

C.2 and 3 only

D.1, 2 and 3

Based on the average investment method, what is the return on capital employed of the investment project?

A.13·3%

B.26·0%

C.52·0%

D.73·5%

请帮忙给出每个问题的正确答案和分析，谢谢！

The following scenario relates to questions 11–15.

Helot Co develops and sells computer games. It is well known for launching innovative and interactive role-playing games and its new releases are always eagerly anticipated by the gaming community. Customers value the technical excellence of the games and the durability of the product and packaging.

Helot Co has previously used a traditional absorption costing system and full cost plus pricing to cost and price its products. It has recently recruited a new finance director who believes the company would benefit from using target costing. He is keen to try this method on a new game concept called Spartan, which has been recently approved.

After discussion with the board, the finance director undertook some market research to find out customers’ opinions on the new game concept and to assess potential new games offered by competitors. The results were used to establish a target selling price of $45 for Spartan and an estimated total sales volume of 350,000 units. Helot Co wants to achieve a target profit margin of 35%.

The finance director has also begun collecting cost data for the new game and has projected the following:

Which of the following statements would the finance director have used to explain to Helot Co’s board what the benefits were of adopting a target costing approach so early in the game’s life-cycle?

(1) Costs will be split into material, system, and delivery and disposal categories for improved cost reduction analysis

(2) Customer requirements for quality, cost and timescales are more likely to be included in decisions on product development

(3) Its key concept is based on how to turn material into sales as quickly as possible in order to maximise net cash

(4) The company will focus on designing out costs prior to production, rather than cost control during live production

A.1, 2 and 4

B.2, 3 and 4

C.1 and 3

D.2 and 4 only

The following financial information relates to YNM Co, which has a cost of equity of 12%. Assume that it is now 31 March 2011 and that the ordinary share price of YNM Co is $4·17 per share. YNM Co has been experiencing trading difficulties due to a continuing depressed level of economic activity:

Income statement information for recent years ending 31 March

Note: the statement of financial position takes no account of any dividend to be paid. The ordinary share capital of YNM Co has not changed during the period under consideration and the 8% bonds were issued in 1998.

Dividend and share price information

Financial objective of

YNM Co YNM Co has a declared objective of maximising shareholder wealth.

(1) To pay the same total cash dividend as in 2010

(2) To pay no dividend at all for the year ending 31 March 2011

Financing decision

YNM Co is also considering raising $50 million of new debt finance to support existing business operations.

Required:

(a) Analyse and discuss the recent financial performance and the current financial position of YNM Co, commenting on:

(i) achievement of the objective of maximising shareholder wealth;

(ii) the two dividend choices;

(iii) the proposal to raise $50 million of new debt finance. (13 marks)

(b) Discuss the following sources of finance that could be suitable for YNM Co, in its current position, to meet its need for $50m to support existing business operations:

(i) equity finance;

(ii) sale and leaseback. (6 marks)

(c) Explain the nature of a scrip (share) dividend and discuss the advantages and disadvantages to a company of using scrip dividends to reward shareholders. (6 marks)

The following information relates to a bank reconciliation. (i) The bank balance in the cashbook before taking the items below into account was $8,970 overdrawn. (ii) Bank charges of $550 on the bank statement have not been entered in the cashbook. (iii) The bank has credited the account in error with $425 which belongs to another customer. (iv) Cheque payments totalling $3,275 have been entered in the cashbook but have not been presented for payment. (v) Cheques totalling $5,380 have been correctly entered on the debit side of the cashbook but have not been paid in at the bank. What was the balance as shown by the bank statement before taking the items above into account?

A、$8,970 overdrawn

B、$11,200 overdrawn

C、$12,050 overdrawn

D、$17,750 overdrawn

The following information relates to a bank reconciliation. 1. The bank balance in the cashbook before taking the items below into account was $8,970 overdrawn. 2. Bank charges of $550 on the bank statement have not been entered in the cashbook. 3. The bank has credited the account in error with $425 which belongs to another customer. 4. Cheque payments totalling $3,275 have been entered in the cashbook but have not been presented for payment. 5. Cheques totalling $5,380 have been correctly entered on the debit side of the cashbook but have not been paid in at the bank. What was the balance as shown by the bank statement before taking the above items into account?

A、$9,520 overdrawn

B、. $11,200 overdrawn

C、$9,520 in credit

D、$11,200 in credit

Give answers to the following questions. Your grades will depend on your statements so try to organize your thoughts or ideas to the point but be brief at the same time.

Directions: Give brief answers to the following questions. (10 points, 2 points each) 1. How did the community of Gulfport act after Hurricane Camille was over in Face to Face with Hurricane Camille? 2. Why did the mayor’s speech puzzle the writer? What had the writer expected the mayor to say in Hiroshima─the "Liveliest" City in Japan? 3. Sum up the major characteristics of Mencken’s writing style in The Libido for the Ugly. 4. Who was the other Mark Twain the author found in Mark Twain─the Mirror of America? 5. What are the two key factors that define the physical reality of our relationship to the earth in Ships in the Desert?

Add punctuation marks to the following two paragraphs. In her essay (1) ______Rethinking the Work-Life Equation (2) _____ (3) ______ Susan Dominus points out that it takes more than just policies to make a workplace truly flexible and the whole office culture has to change (4)_____ She starts with her writing as the following (5) _____ Phyllis Moen(6) _____ a sociologist who was widowed when her two children were young, has made a career studying the challenges of working full time while raising a family(7) ______She was an early voice calling for the government to provide paid maternity leave and offer benefits for part(8) _____time workers(9) _______but eventually(10) ______ when she saw no signs of progress(11) ____ she began considering instead the ways that corporations could reconfigure work to address the realities of the modern employee(12) ______ who was more likely than ever to be a single parent or part of a dual-income couple(13) ____ (14) _____We wanted to do a field experiment at a corporation that reduced its hours(15) ____ (16) ____ she said(17) ______ (18) ______ but realized nobody would let us do that (19) _____We thought they would be more willing to experiment with giving workers more control(20) ____ (21)______