I hav eposted this a couple of times and I will only consider the CORRECT answers. Others I;ll rate down. Be the best.

Question 1

'Jenny Cochran, a graduate of The University of Tennessee with 4 years of experience as an equities analyst, was recently brought in as assistant to the chairman of the board of Computron Industries, a manufacturer of computer components.

During the previous year, Computron had doubled its plant capacity, opened new sales offices outside its home territory, and launched an expensive advertising campaign. Cochran was assigned to evaluate the impact of the changes. She began by gathering financial statements and other data. (Data Attached)

1. What effect did the expansion have on sales and net income? What effect did the expansion have on the asset side of the balance sheet?What do you conclude from the statement of cash flows?
2. What is Computron's net operating profit after taxes (NOPAT)? What are operating current assets? What are operating current liabilities? How much net operating working capital and total net operating capital does Computron have?
3. What is Computron's free cash flow (FCF)? What are Computron's "net uses" of its FCF?
4. Calculate Computron's return on invested capital (ROIC). Computron has a 10% cost of capital (WACC). What caused the decline in the ROIC? Was it due to operating profitability or capital utilization? Do you think Computron's growth added value?
5. What is Computron's EVA?The cost of capital was 10% in both years.
6. Assume that a corporation has $200,000 of taxable income from operations. What is the company's federal tax liability?
7. Assume that you are in the 25% marginal tax bracket and that you have $50,000 to invest. You have narrowed your investment choices down to municipal bonds yielding 7% or equally risky corporate bonds with a yield of 10%. Which one should you choose and why? At what marginal tax rate would you be indifferent

Section 2

In relation to the law of insurance distinguish

Between a contract of insurance and a wagering contract.

19. John insured a ship against any losses while lying at Mombasa port for a sum of shillings ten million with BADC insurance company limited. He further insured the same ship with Deep sea insurance company limited for a similar amount subsequently the port caught fire and the ship was badly damaged. The estimate cost of repair of the ship is five million. John has lodged a claim for compensation. Explain the legal principles in the above case and advise John.

20. Where goods have been let under higher purchase agreement and two thirds of the higher purchase price have been paid the owner shall not enforce any right to recover possession of the goods from the hirer otherwise than by suit. Explain three consequences of contravention of the above provision by the owner.