Section 1 - Definitions and Examples Learners will define specific concepts and provide an example of how the concept is applied. Each response should be approx. 150 words. 1. Define and explain the role each of the 5 C's for assessing lending decisions. 2. Define risk and return. Explain the general relationship between them and how to assess your preferred level of risk? ( 3. Define "mutual exclusivity" and describe ways in which projects can be mutually exclusive.. 4. Define the term "standard deviation" in respect to risk. What would a standard deviation of zero mean? What would a standard deviation of 10 per cent mean? Section 2 - Short Answer Explanations Learners will provide short, specific answers to short, specific questions. Answers should be between 1-4 sentences. 5. Discuss the difference between cash flow forecasts for new ventures, expansion projects and replacement projects. Which forecasts are most complex? Least complex? ( 6. Why are time value concepts important in ordinary business dealings, especially those involving contracts? 7. Briefly explain the pros and cons of financial leverage. In other words, what are its benefits, and what are the costs that come along with those benefits?- 8. What information are we likely to be interested in that's contained in a loan amortization schedule? (SSection 3 - Computations Learners will complete calculations exemplified in the provided resources or during in-class lectures and activities. 1) LT Designs is opening a storefront to display and sell poster art. They expect to receive cash flows of $120,000 in the first year, $180,000 in the year two, $240,000 in year three. If LT Designs uses 11 percent as its discount rate, what is the present value of the cash flows? (*Hint: NPV - Uneven CF) (2 marks) . Include the formula used to calculate the answer (calculator or excel)2} Bob's Books Ltd. is considering an expansion project that will begin next year. Bob's cost of capital is 12%. The initial outlay of the project will be $250,000, and it is expected to generate the following cash flows over the ve-year life ofthe project: [9 marks} Year 3 $40,000 $60,000 $90,000 $90,000 $90,000 a) Calculate the following [include the formula used to calculate the answer - calculator or excel]: |. Payback Period (PB) ||. Net Present Value (NPV) |||. Internal Rate of Return (lRR) IV. Profitability Index (Pl) b) Based on your findings, should Bob move ahead with the project? Section 4 - Essay Question Learners will respond to a question in essay format. Use APA guidelines for ih-text citations. No reference list is required. Essay responses must be 250 words (You may go over the word limit by 10% without penalty). Financial plans are statements of goals as well as predictions of future performance. Discuss how and why this dual purpose can create probleml Section 5 - Case Study Question (1 l Learners will assess a situation that is applicable to the real world of business and respond by linking theories and concepts from lesson content to the presenting situation. Case study responses should include specific details and examples and be written in proper paragraph form.| Recall Shannon from Case Study #3 in Week 10 of the course. Shannon is considering changing careers and opening a home daycare. She really loves being around children and feels this could give her more time with her son. She has spoken to a few local parents and friends with children and is sure she can easily keep the maximum children allowed which is five per the Ontario Government regulations. As a sole-proprietor Shannon would also have more flexibility and control of her own schedule. Shannon has run some calculations and figures her total gross annual revenue would be around $47,250. If she chose this route, she would no longer pay her current childcare expenses. She knows she will need supplies to run the daycare such as food for the children, toiletries, cleaning supplies, and toys and activities. Answer the following questions in a written response to Shannon using specific details and paragraph form. In your response, explain the additional requirements of self- employment, specifically in the daycare industry. Make a recommendation to Shannon regarding her decision. 1. Can Shannon claim the listed expenses on her income tax return? What additional expenses could Shannon claim to reduce taxable income? List a minimum of 4 additional types of expenses and indicate whether they require be around $472250. If she chose this route, she would no longer pay her current childcare expenses. She knows she will need supplies to run the daycare such as food for the children, toiletries, cleaning supplies, and toys and activities. Answer the following questions in a written response to Shannon using specific details and paragraph form. In your response, explain the additional requirements of self- employment, specifically in the daycare industry. Make a recommendation to Shannon regarding her decision. 'l. Can Shannon claim the listed expenses on her income tax return? What additional expenses could Shannon claim to reduce taxable income? List a minimum of 4 additional types of expenses and indicate whether they require additional calculations or are claimed at face value. Use the below link to see the kind of business deductions Shannon could claim for operating a home daycare. This link also provides information pertaining to the organization and filing of income tax for home daycare businesses. . What form would Shannon use to claim her business income and expenses and what type of return is this form led with at tax time? . Assess this decision from a financial planning and tax perspective. What are the financial advantages or disadvantages of making this career change? Consider remittances such as CPP and option to elect for El, planning for retirement, and utilizing deductions and credits