This is a discussion question need about 1 paragraph and a 1/2

And the attachment is needed too, you can use some of the old stuffyou'vehelp me with prior to use to complete thispartition. (MY_CASESTUDY_TEMPLATE TO BE ADDED TO) IS WHERE IT NEEDS TO BE ATTACHED TO ONCE COMPLETED.

IM WILLING TO PAY 30$ ONCE ACCEPTED!!!!

The subject you are studying this week, Time Value of Money, is one of the most important concepts in finance. The reason it is so important is because the ultimate objective of financial managers is to maximize the value of the firms they work for. So this concept of value (value today, value in the future, measuring value, changing value) assumes ultimate importance.

Here is a problem that illustrates one use of value in decision making. Once you are reasonably familiar with this week's material, try your hand at it.

The issue:

Suppose it was announced this morning that a family member of yours was the winner of a Powerball lottery Grand Prize of $73.7 million.

Unfortunately, they can't actually collect $73.7 million in cash today. Instead, they are offered two options:

Collect the prize in 25 annual payments of $2.948 million each (before-tax), or

Take a one-time lump sum payment of $41.4 million (before-tax) now.

Since you are an esteemed financial planner (due to your work in this term's BUSN 5200 on-line course) they have approached you for advice. Your family member wants to know, should he or she take the 25 payments of $2.948 million each, or should he or she take the $41.4 million lump sum payment?

What would you advise your family member to do, and why? Remember, the quality of your answer determines the size of your fat financial planner commission check.

Financial Analysis of the McDonalds Company MCD 60523, Oak Brook, IL (630)-623-3000 Erin Cross PART 1, COMPANY OVERVIEW: a. Brief description of the company McDonalds is among the leading food retailers worldwide with approximately 36,000 outlets in 119 countries. McDonald's mainly sells fast foods (Busch & Bain, 2004). Due to the changing consumer tastes, the company's menu expanded to include fish, smoothies, salads, fruits and fish. Approximately 81% of McDonald's outlets worldwide are owned as franchisees. McDonalds is the second largest private employer in the world employing more than 420,000 people. b. Company history Richard and Maurice McDonald started McDonalds in 1940 as a barbecue outlet in San Bernardino, California. Today the corporation operates as one of the largest chain of fast food restaurants with 36, 535 outlets operating in 119 countries. McDonalds serves more than sixty nine million customers in a day. c. Organization McDonalds Corporation runs about 19% of the restaurants the rest are independently owned as franchisees (Vignali, 2001). The organizations structure is made up of the Chairman, CEO and COO at the top followed by various departments. d. Main products and services McDonald's mainly sells hamburgers, French fries milk shakes, desserts, chicken, soft drinks, cheese burgers and chicken (Vignali, 2001). Due to alternating consumer tastes and preferences, McDonalds added salads, smoothies, fish, wraps and fruits to their menu. The McDonalds Corporation makes money as restaurant franchiser, investor of properties and as a restaurant operator. e. Geographic area of operations McDonalds Corporation operates in Europe, America, Asia, Middle East and Africa. The most expensive Big Mac in the world is found in Switzerland with the cheapest found in India. f. Recent developments In recent news, McDonalds has plans to open their first restaurant in Kazakhstan. The corporation is also rewarding kids worldwide with an opportunity to attend the 2016 Rio Olympics opening ceremony. McDonalds also has the plan to unlock it growth potential in Asia (Vignali, 2001). PART 2, FINANCIAL OVERVIEW: a. Sales and Income Record: ------------- Fiscal Years ------------2008 2009 2010 2011 2012 -- Sales 23,522 22,745 24,075 27,006 27,567 -- Percent change in sales each year 3.23% -- Net Income 4,313 4,551 -- Percent change in -3.30% 5.85% 4,946 12.17% 5,503 2.08% 5,465 net income each year 80.08% 5.23% 7.98% 11.26% -0.69% GRAPH OF SALES & NET INCOME, FY 2008 - 2012 (in 000' US $) The company's sales and net income chart indicates opposing trend between sales that vary and net income that either decrease or increase slightly. Net income and sales revenue increased in 2008. The fiscal year 2009 reported fewer sales as compared to 2008 although the net income was higher. Sales and net income trend in 2010 and 2011 increased, and later went downward in 2012. Based on the mixed trend, it can be argued that McDonald's was proficient to increase prices or lower expenses during a period when sale declined and hence maintained a flat ratio of profits even with the declining sales. b. Expense Distribution: Major expenses Company operated restaurant expenses Franchised restaurant occupancy expenses Selling, general and administrative expenses Interest expense Provision for income taxes PIE CHART OF EXPENSES, FY 2012 FY2012 ($) 15224 1527 2455 517 2614 The top expense of the company is the company-operated restaurant expense, and the expense report indicates where the company is spending money. Expense ratios help to determine the relationship between operating expenses and sales volume. It illustrates what percentage of sales is consumed by various operating expenses. Since the company-operated restaurant expense cost the most, it is clear that most money is used to run the company which is very okay. c. Assets Distribution: Assets Cash Accounts receivable Inventory Fixed assets Other assets PIE CHART OF ASSETS, Year-end FY 2012 FY 2012 ($) 2336.10 1375.30 121.70 24677.20 6876.20 The inventory of the company is low because of the continuous moving of inventory, which makes it to be purchased and sold constantly. The fixed assets of McDonald's are high because the company has a lot of property. The company also has equipment in stores, and it also own many stores. Therefore, the company can easily sell them as current assets. McDonald's has enough cash hand that can be used to pay its liabilities. c. Capital Structure: Capital structure Current liabilities Long-term and other liabilities Common equity CAPITAL STRUCTURE PIE CHART, Year-end FY 2012 FY 2012 3403.10 16689.80 15296.60 The current liabilities of McDonald's are very little as compared to the long-term liabilities and common equity. Common equity explains the amount that all shareholders have invested in the company. In the case of McDonald's, its common equity is less than the long-term and other liabilities, which implies that they cannot be used to settle all the liabilities. However, the common equity of the company can be used to cover the current liabilities. PART 3, RATIO ANALYSIS: (1) LIQUIDITY: FY 2011 FY 2012 ____ ____ ____ ____ ____ ____ ____ ____ Current Ratio: McDonalds Wendy's Quick Ratio: McDonalds Wendy's Comments On McDonalds Liquidity: Be sure to include comments! The numbers are meaningless by themselves. Comment on what you see. What story do the numbers tell? (2) ASSET MANAGEMENT FY 2011 FY 2012 ____ ____ ____ ____ ____ ____ ____ ____ Total Asset Turnover: McDonalds Wendy's Average Collection Period: McDonalds Wendy's Comments On McDonalds Asset Management: (3) DEBT MANAGEMENT: FY 2011 FY 2012 ____ ____ ____ ____ Total Debt to Total Assets: McDonalds Wendy's Times Interest Earned: McDonalds Wendy's ____ ____ ____ ____ Comments On McDonalds Debt Management: (4) PROFITABILITY: FY 2011 FY 2012 ____ ____ ____ ____ ____ ____ ____ ____ ____ ____ ____ ____ Net profit Margin: McDonalds Wendy's Return on Assets: McDonalds Wendy's Return on Equity: McDonalds Wendy's Modified Du Pont Equation, FY 2012: Net Profit Margin Total Asset Turnover Equity Multiplier McDonalds ____ ____ ____ Wendy's ____ ____ ____ Comments On McDonalds Profitability: (5) MARKET VALUE RATIOS: FY 2011 FY 2012 ____ ____ ____ ____ ____ ____ ____ ____ PE Ratio: McDonalds Wendy's Market to Book Ratio: McDonalds Wendy's Comments On McDonalds Market Value Ratios: PART 4, CONCLUSIONS AND RECOMMENDATIONS - Summarize your analysis. Review your comments in the financial analysis section and provide your assessment of the overall status of the firm. Include any recommendations you think are appropriate. - List any other recommendations you have for the firm in view of your analysis. * End of report Outline *