Respond to the information you Chapter 12
Why is the capital structure of a business important?
Why is cash management important for a sports organization?
Which funding option would be the most economical to issue if you were trying to raise $200 million?
What does flotation cost mean?
Why is the time value of money important?
Why is the payback rule important when analyzing financial issues?
If you were to make a capital-budgeting decision based on project cash flows, would you prefer to use NPV, the IRR method, the payback rule, or the
discounted payback rule? Why would you use the method that you have selected? What is the advantage of using multiple methods?
Try to determine the break-even point for selling 500 hot dogs at a game knowing the fixed costs are $250 for the game. Look up the cost for hot dogs,
condiments, buns, and paper plates to help determine what the variable costs will be.
If you were to develop a managerial accounting approach to measure the nonfinancial success of your school’s athletic programs, what would you measure,
how will you get that data, and how will you r would uncover? + 200 words
The capital structure of a business is important because it determines how the ownership of the company is divided into equity and debt. This affects the company’s risk profile, as well as its ability to access additional funds. The cost of capital for a business depends on its mix of financing sources, which in turn influences investment decisions and returns to shareholders.
Cash management is important for sports organizations because they must effectively manage their cash flow in order to maintain financial stability and make necessary investments in equipment, personnel, and other resources. Cash management involves determining when money needs to be spent, making sure that money is available when it’s needed, and allocating funds efficiently among different areas. Good cash management also helps an organization stay within budget while maximizing profits.
Raising $200 million could potentially be done using any number of funding options depending on the level of risk involved with each option and the associated costs. Options may include issuing bonds or stocks publicly, taking out loans from banks or other lenders, or raising private capital through venture capitalists or angel investors. Ultimately whichever option offers the lowest cost weighted against its risk should be chosen for maximum efficiency and economy of funds raised.
Floating costs are fees associated with initial public offerings (IPOs) such as underwriting fees for brokers/dealers who help facilitate transactions between buyers and sellers in the market; legal costs; accounting services; registration fees with regulatory agencies; printing expenses related to offering documents such as prospectus; advertising expenses related to promoting securities offerings etc.. These types of costs add up quickly so understanding them before committing can mean significant savings over time by avoiding unnecessary expenses during an IPO launch process.
The time value of money refers to how much purchasing power money has over a given period due to inflationary increases in prices typically seen over time (i.e., “a dollar today isn’t worth what it was five years ago”). It is important because knowing this value allows businesses or individuals more accurate predictions about future income streams based on investments made today – meaning they avoid costly errors by not overly investing too much too soon into projects that won’t yield returns until far later down the line than originally anticipated due largely from changes in prices across industries due simply economics 101 style supply-demand shifts .
The payback rule states that investments should only be made if their expected return exceeds their cost within an acceptable amount of time (normally one year). This allows companies with limited resources to focus on those projects which have higher chances at yields versus large scale projects that will take longer timescales before seeing actual results (which requires greater levels of commitment from entities) . Thus understanding this concept leads towards better decision-making when considering what initiatives are best suited for both short term goals & long term vision alike .
When analyzing financial issues based solely upon subsequent project cash flows I would prefer using NPV since this method takes into account future value after factoring inflation vs just current values like IRR does thus providing a better insight overall into success potential – plus there are fewer complications regarding multiple internal rates which could arise during useage [of] IRR computation processes , leading towards more error prone outcomes rather than accurate ones desired usually . Advantages gained by utilizing multiple methods comes through having redundancy mechanisms built into strategy formation processes – allowing managers flexibility & better protection against potential unforeseen weaknesses arising during usage & implementation cycles entailed with any particular methodology employed at hand .
In order to determine break-even point for selling 500 hot dogs you first need look up price per item covering hot dogs themselves alongside condiments , buns & paper plates used normally serving these items altogether ; afterwards combination thereof added together will give you variable cost incurred each instance purchase occurs respectively speaking . Afterwards subtracting total fixed cost ($250 ) from above ascertained figure gives us equation mark both sales volume wise & revenue wise henceforth : Break even point = Fixed Cost / ((Sales Price Per Unit)-(Variable Cost Per Unit)) ==> 250/(4$-$1) ~= 62 Sales Volume Required To Achieve Break Even Point Mark Desired ..