Project 3 Workbook Questions

Income Statement:

1. Based on your horizontal analysis of Choice Hotels’ and Marriott International’s total revenue, total expenses, and net income, which company would be a more attractive target for an acquisition by the equity firm and why?

2. Given the changes in total revenue, operating income, and net income from 2016 to 2017, did Choice Hotels or Marriott International experience more change? Which area (total revenue, operating income, or net income) changed most?

Balance Sheet:

1. Based on your horizontal analysis of Choice Hotels’ and Marriott International’s total assets, total liabilities, and total equity, which company is most attractive for an acquisition by the equity firm and why?

2. What advice would you give to the client, Choice Hotels, to reduce its total liabilities?

Cash Flow:

1. Based on your horizontal analysis of Choice Hotels’ and Marriott International’s operating, investing, and financing activities, which company is most attractive for an acquisition by the equity firm and why?

2. What advice would you give to the client, Choice Hotels, to improve their investing and financing activities?

Budgeting:

1. Quick ratios between 0.5 and 1 are considered satisfactory, as long as the collection of receivables is not expected to slow. Does the client, Choice Hotels, have enough current assets to meet the payment schedule of current liabilities with a margin of safety?

2. Which of the above ratios would you use to determine which company, Choice Hotels or Marriott International, is more attractive for an acquisition by the equity firm and why?

Profitability:

1. The return on assets ratio tells us the profit generated by each dollar in assets. You will want to compare this ratio to Choice Hotels’ historical performance and to Marriott International to understand if it is an acceptable ratio. Is the return on assets ratio acceptable? Why or why not?

2. Which of the above ratios would you use to determine which company, Choice Hotels or Marriott International, is more attractive for an acquisition? Why?

3. Based on the financial statement analysis, earnings per share analysis, budgeting ratios, and the above profitability ratios, which company would you invest in and why?

Read Chapter 2 found in your Capsim e-Textbook, Marketing: How do we identify, entice and add value for customer?

Porter’s Five Forces model is a well-known approach to developing a sustainable competitive advantage. For a company to develop a competitive advantage, however, the four functional areas, as described in Chapter 2, and the employees must effectively work together toward shared goals and manage the complex interactions of ideas, people, and capital. Address the following:

• Describe your Capsim team’s experience with the interactions of your team’s functional areas.
• What sustainable competitive advantage were you able to develop, if any?
• How did your team balance the needs of internal and external stakeholders?
• What are the marketing realities your team faced and how did you address them?

250 words in length,

APA format

1 Reference in addition to e-Text

Synthesis is the act of creating something new from multiple existing entities. Synthesis of research, then, is creating a new idea from existing ideas. Synthesis of research is not a single innate skill. Rather, it is a process learned through time and practice. At the doctoral level, writing is a continual process of revision as learners improve skills and build subject matter expertise.

 

In Topic 5, you submitted a Synthesis Paper and received both feedback from your instructor and a grade for your work. In this assignment, you will expand upon your original paper with additional research from outside sources, incorporate feedback from your instructor, and provide a reflection section addressing your revision process.

 

General Requirements:

 

• Locate the Synthesis Paper you completed in Topic 5.
• Locate and download “Enhanced Synthesis Paper Template” from the Course Materials for this topic.
• Locate and download “Enhanced Synthesis Paper Resources” from the Course Materials for this topic.
• Review the articles by Baker and Pifer (2011), Gardner (2009), and Smith and Hatmaker (2014) located in the Course Materials for this topic.
• This assignment uses a rubric. Review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.
• Doctoral learners are required to use APA style for their writing assignments.

Directions:

 

Select and read two articles from the Enhanced Synthesis Paper Resources list located in the Course Materials for this topic.

 

Locate the Synthesis Paper you completed in Topic 5. Using the feedback provided by your instructor and information from the two additional articles you selected, write an Enhanced Synthesis Paper with Reflection (1,250-1,800 words). Include the following in your paper:

 

1. A Reflection (250-300 words) that discusses your revision process and how you incorporated your instructor’s feedback into the revised version. Similar to the format of an abstract, this section will receive its own page following the title page and preceding the Introduction.
2. An introduction that includes a brief description of each article and its purpose, identifies the three themes that emerged from your reading, describes how they will be discussed in the paper, and presents a clear thesis statement.
3. Support for your identified themes with evidence from each article. Provide analysis of these findings to strengthen your narrative.
4. A discussion of the conclusions that can be drawn when the articles are taken together as a single entity. What is the overall message of the group of articles?

This paper is due TODAY AT 10.30 PM no later.

Format your submission consistent with APA guidelines.

Case problem 6.1 A-C

Case Problem 6.1 Sara Decides to Take the Plunge

1.     LG 1

2.     LG 6

Sara Thomas is a child psychologist who has built a thriving practice in her hometown of Boise, Idaho. Over the past several years she has been able to accumulate a substantial sum of money. She has worked long and hard to be successful, but she never imagined anything like this. Even so, success has not spoiled Sara. Still single, she keeps to her old circle of friends. One of her closest friends is Terry Jenkins, who happens to be a stockbroker and who acts as Sara’s financial advisor.

Not long ago Sara attended a seminar on investing in the stock market, and since then she’s been doing some reading about the market. She has concluded that keeping all of her money in low-yielding savings accounts doesn’t make sense. As a result, Sara has decided to move part of her money to stocks. One evening, Sara told Terry about her decision and explained that she had found several stocks that she thought looked “sort of interesting.” She described them as follows:

·       North Atlantic Swim Suit Company. This highly speculative stock pays no dividends. Although the earnings of NASS have been a bit erratic, Sara feels that its growth prospects have never been brighter—“what with more people than ever going to the beaches the way they are these days,” she says.

·       Town and Country Computer. This is a long-established computer firm that pays a modest dividend yield (of about 1.50%). It is considered a quality growth stock. From one of the stock reports she read, Sara understands that T&C offers excellent long-term growth and capital gains potential.

·       Southeastern Public Utility Company. This income stock pays a dividend yield of around 5%. Although it’s a solid company, it has limited growth prospects because of its location.

·       International Gold Mines, Inc. This stock has performed quite well in the past, especially when inflation has become a problem. Sara feels that if it can do so well in inflationary times, it will do even better in a strong economy. Unfortunately, the stock has experienced wide price swings in the past. It pays almost no dividends.

Questions

a.      What do you think of the idea of Sara keeping “substantial sums” of money in savings accounts? Would common stocks make better investments for her than savings accounts? Explain.

b.     What is your opinion of the four stocks Sara has described? Do you think they are suitable for her investment needs? Explain.

c.      What kind of common stock investment program would you recommend for Sara? What investment objectives do you think she should set for herself, and how can common stocks help her achieve her goals?

 

Case Problem 6.2 A-C

Case Problem 6.2 Wally Wonders Whether There’s a Place for Dividends

1. LG 5
2. LG 6

Wally Wilson is a commercial artist who makes a good living by doing freelance work—mostly layouts and illustrations—for local ad agencies and major institutional clients (such as large department stores). Wally has been investing in the stock market for some time, buying mostly high-quality growth stocks as a way to achieve long-term growth and capital appreciation. He feels that with the limited time he has to devote to his security holdings, high-quality issues are his best bet. He has become a bit perplexed lately with the market, disturbed that some of his growth stocks aren’t doing even as well as many good-grade income shares. He therefore decides to have a chat with his broker, Al Fried.

During their conversation, it becomes clear that both Al and Wally are thinking along the same lines. Al points out that dividend yields on income shares are indeed way up and that, because of the state of the economy, the outlook for growth stocks is not particularly bright. He suggests that Wally seriously consider putting some of his money into income shares to capture the high dividend yields that are available. After all, as Al says, “the bottom line is not so much where the payoff comes from as how much it amounts to!” They then talk about a high-yield public utility stock, Hydro-Electric Light and Power. Al digs up some forecast information about Hydro-Electric and presents it to Wally for his consideration:

Year	Expected EPS ($)	Expected Dividend Payout Ratio (%)
2016	$3.25	40%
2017	$3.40	40%
2018	$3.90	45%
2019	$4.40	45%
2020	$5.00	45%

The stock currently trades at $60 per share. Al thinks that within five years it should be trading at $75 to $80 a share. Wally realizes that to buy the Hydro-Electric stock, he will have to sell his holdings of CapCo Industries—a highly regarded growth stock that Wally is disenchanted with because of recent substandard performance.

Questions

1. How would you describe Wally’s present investment program? How do you think it fits him and his investment objectives?
2. Consider the Hydro-Electric stock.
   1. Determine the amount of annual dividends Hydro-Electric can be expected to pay over the years 2016 to 2020.
   2. Compute the total dollar return that Wally will make from Hydro-Electric if he invests $6,000 in the stock and all the dividend and price expectations are realized.
   3. If Wally participates in the company’s dividend reinvestment plan, how many shares of stock will he have by the end of 2020? What will they be worth if the stock trades at $80 on December 31, 2020? Assume that the stock can be purchased through the dividend reinvestment plan at a net price of $50 a share in 2016, $55 in 2017, $60 in 2018, $65 in 2019, and $70 in 2020. Use fractional shares, to 2 decimals, in your computations. Also, assume that, as in part b, Wally starts with 100 shares of stock and all dividend expectations are realized.
3. Would Wally be going to a different investment strategy if he decided to buy shares in Hydro-Electric? If the switch is made, how would you describe his new investment program? What do you think of this new approach? Is it likely to lead to more trading on Wally’s behalf? If so, can you reconcile that with the limited amount of time he has to devote to his portfolio?

 

 

Case Problem 7.1 A-C

Case Problem 7.1 Some Financial Ratios Are Real Eye-Openers

1.     LG 5

2.     LG 6

Jack Arnold is a resident of Lubbock, Texas, where he is a prosperous rancher and businessman. He has also built up a sizable portfolio of common stock, which, he believes, is due to the fact that he thoroughly evaluates each stock he invests in. As Jack says, “You can’t be too careful about these things! Anytime I plan to invest in a stock, you can bet I’m going to learn as much as I can about the company.” Jack prefers to compute his own ratios even though he could easily obtain analytical reports from his broker at no cost. (In fact, Bob Smith, his broker, has been volunteering such services for years.)

Recently Jack has been keeping an eye on a small chemical stock. The firm, South Plains Chemical Company, is big in the fertilizer business—which is something Jack knows a lot about. Not long ago, he received a copy of the firm’s latest financial statements (summarized here) and decided to take a closer look at the company.

Cash	$ 1,250
Accounts receivable	$ 8,000	Current liabilities		$10,000
Inventory	$12,000	Long-term debt		$ 8,000
Current assets	$21,250	Stockholders’ equity		$12,000
Fixed and other assets	$ 8,750	Total liabilities and
Total assets	$30,000	stockholders’ equity		$30,000
South Plains Chemical Company Balance Sheet ($ thousands)
Sales			$50,000
Cost of goods sold			$25,000
Operating expenses			$15,000
Operating profit			$10,000
Interest expense			$ 2,500
Taxes			$ 2,500
Net profit			$ 5,000
Dividends paid to common stockholders ($ in thousands)			$ 1,250
Number of common shares outstanding			5 million
Recent market price of the common stock			$ 25
South Plains Chemical Company Income Statement ($ thousands)

Questions

a.      Using the South Plains Chemical Company figures, compute the following ratios.

	Latest Industry Averages		Latest Industry Averages
Liquidity		Profitability
a. Net working capital	N/A	h. Net profit margin	8.5%
b. Current ratio	1.95	i. Return on assets	22.5%
Activity		j. ROE	32.2%
c. Receivables turnover	5.95	Common-Stock Ratios
d. Inventory turnover	4.50	k. Earnings per share	$2.00
e. Total asset turnover	2.65	l. Price-to-earnings ratio	20.0
Leverage		m. Dividends per share	$1.00
f. Debt-equity ratio	0.45	n. Dividend yield	2.5%
g. Times interest earned	6.75	o. Payout ratio	50.0%
		p. Book value per share	$6.25
		q. Price-to-book-value ratio	6.4

b.     Compare the company ratios you prepared to the industry figures given in part a. What are the company’s strengths? What are its weaknesses?

c.      What is your overall assessment of South Plains Chemical? Do you think Jack should continue with his evaluation of the stock? Explain.

 

 

 

Case Problem 7.2 A-C

Case Problem 7.2 Doris Looks at an Auto Issue

Doris Wise is a young career woman. She lives in Phoenix, Arizona, where she owns and operates a highly successful modeling agency. Doris manages her modest but rapidly growing investment portfolio, made up mostly of high-grade common stocks. Because she’s young and single and has no pressing family requirements, Doris has invested primarily in stocks that offer the potential for attractive capital gains. Her broker recently recommended an auto company stock and sent her some literature and analytical reports to study. One report, prepared by the brokerage house she deals with, provided an up-to-date look at the economy, an extensive study of the auto industry, and an equally extensive review of several auto companies (including the one her broker recommended). She feels strongly about the merits of security analysis and believes it is important to spend time studying a stock before making an investment decision.

Questions

a.      Doris tries to stay informed about the economy on a regular basis. At the present time, most economists agree that the economy is getting stronger. What information about the economy do you think Doris would find helpful in evaluating an auto stock? Prepare a list—and be specific. Which three items of economic information (from your list) do you feel are most important? Explain.

b.     In relation to a study of the auto industry, briefly note the importance of each of the following.

1.     Auto imports

2.     The United Auto Workers union

3.     Interest rates

4.     The price of a gallon of gas

c.      A variety of financial ratios and measures are provided about one of the auto companies and its stock. These are incomplete, however, so some additional information will have to be computed. Specifically, we know the following:

Net profit margin	15%
Total assets	$25 billion
Earnings per share	$3.00
Total asset turnover	1.5
Net working capital	$3.4 billion
Payout ratio	40%
Current liabilities	$5 billion
Price-to-earnings ratio	12.5

d.     Given this information, calculate the following:

1.     Sales

2.     Net profits after taxes

3.     Current ratio

4.     Market price of the stock

5.     Dividend yield

 

Case Problem 8.1 A-B

 

Case Problem 8.1 Chris Looks for a Way to Invest His Wealth

1.     LG 1

2.     LG 2

3.     LG 4

Chris Norton is a young Hollywood writer who is well on his way to television superstardom. After writing several successful television specials, he was recently named the head writer for one of TV’s top-rated sitcoms. Chris fully realizes that his business is a fickle one, and on the advice of his dad and manager, he has decided to set up an investment program. Chris will earn about a half-million dollars this year. Because of his age, income level, and desire to get as big a bang as possible from his investment dollars, he has decided to invest in speculative, high-growth stocks.

Chris is currently working with a respected Beverly Hills broker and is in the process of building up a diversified portfolio of speculative stocks. The broker recently sent him information on a hot new issue. She advised Chris to study the numbers and, if he likes them, to buy as many as 1,000 shares of the stock. Among other things, corporate sales for the next three years have been forecasted as follows:

Year	Sales ($ millions)
1	$22.5
2	$35.0
3	$50.0

The firm has 2.5 million shares of common stock outstanding. They are currently being traded at $70 a share and pay no dividends. The company has a net profit rate of 20%, and its stock has been trading at a P/E of around 40 times earnings. All these operating characteristics are expected to hold in the future.

Questions

a.      Looking first at the stock:

1.     Compute the company’s net profits and EPS for each of the next 3 years.

2.     Compute the price of the stock three years from now.

3.     Assuming that all expectations hold up and that Chris buys the stock at $70, determine his expected return on this investment.

4.     What risks is he facing by buying this stock? Be specific.

5.     Should he consider the stock a worthwhile investment candidate? Explain.

b.     Looking at Chris’s investment program in general:

1.     What do you think of his investment program? What do you see as its strengths and weaknesses?

2.     Are there any suggestions you would make?

3.     Do you think Chris should consider adding foreign stocks to his portfolio? Explain.

 

Case Problem 8.2 A-B

Case Problem 8.2 An Analysis of a High-Flying Stock

1.     LG 2

2.     LG 6

Marc Dodier is a recent university graduate and a security analyst with the Kansas City brokerage firm of Lippman, Brickbats, and Shaft. Marc has been following one of the hottest issues on Wall Street, C&I Medical Supplies, a company that has turned in an outstanding performance lately and, even more important, has exhibited excellent growth potential. It has five million shares outstanding and pays a nominal annual dividend of $0.05 per share. Marc has decided to take a closer look at C&I to assess its investment potential. Assume the company’s sales for the past five years have been as follows:

Year	Sales ($ millions)
2012	$10.0
2013	$12.5
2014	$16.2
2015	$22.0
2016	$28.5

Marc is concerned with the future prospects of the company, not its past. As a result, he pores over the numbers and generates the following estimates of future performance:

Expected net profit margin	12%
Estimated annual dividends per share	5¢
Number of common shares outstanding	No change
P/E ratio at the end of 2017	35
P/E ratio at the end of 2018	50

Questions

a.      Determine the average annual rate of growth in sales over the past five years. (Assume sales in 2011 amounted to $7.5 million.)

1.     Use this average growth rate to forecast revenues for next year (2017) and the year after that (2018).

2.     Now determine the company’s net earnings and EPS for each of the next two years (2017 and 2018).

3.     Finally, determine the expected future price of the stock at the end of this two-year period.

b.     Because of several intrinsic and market factors, Marc feels that 25% is a viable figure to use for a desired rate of return.

1.     Using the 25% rate of return and the forecasted figures you came up with in question a, compute the stock’s justified price.

2.     If C&I is currently trading at $32.50 per share, should Marc consider the stock a worthwhile investment candidate? Explain.

 

Case Problem 9.2 A-C

Case Problem 9.2 Deb Takes Measure of the Market

1.     LG 5

Several months ago, Deb Forrester received a substantial sum of money from the estate of her late aunt. Deb initially placed the money in a savings account because she was not sure what to do with it. Since then, however, she has taken a course in investments at the local university. The textbook for the course was, in fact, this one, and the class just completed this chapter. Excited about what she has learned in class, Deb has decided that she definitely wants to invest in stocks. But before she does, she wants to use her newfound knowledge in technical analysis to determine whether now would be a good time to enter the market.

Deb has decided to use all of the following measures to help her determine if now is, indeed, a good time to start putting money into the stock market:

·       Advance-decline line

·       New highs-new lows indicator (Assume the current 10-day moving average is 0 and the last 10 periods were each 0.)

·       Arms index

·       Mutual fund cash ratio

Deb goes to the Internet and, after considerable effort, is able to put together the accompanying table of data.

Questions

a.      Based on the data presented in the table, calculate a value (where appropriate) for periods 1 through 5, for each of the four measures listed above. Chart your results, where applicable.

b.     Discuss each measure individually and note what it indicates for the market, as it now stands. Taken collectively, what do these four measures indicate about the current state of the market? According to these measures, is this a good time for Deb to consider getting into the market, or should she wait a while? Explain.

c.      Comment on the time periods used in the table, which are not defined here. What if they were relatively long intervals of time? What if they were relatively short? Explain how the length of the time periods can affect the measures.

	Period 1	Period 2	Period 3	Period 4	Period 5
Dow Jones Industrial Average	8,300	7,250	8,000	9,000	9,400
Dow Transportation Average	2,375	2,000	2,000	2,850	3,250
New highs	$  68	$  85	$  85	$ 120	$ 200
New lows	$  75	$  60	$  80	$  75	$  20
Volume up	600,000,000	836,254,123	275,637,497	875,365,980	1,159,534,297
Volume down	600,000,000	263,745,877	824,362,503	424,634,020	313,365,599
Mutual fund cash (trillions of dollars)	$0.31	$0.32	$0.47	$0.61	$0.74
Total assets managed (trillions of dollars)	$6.94	$6.40	$6.78	$6.73	$7.42
Advancing issues (NYSE)	1,120	1,278	1,270	1,916	1,929
Declining issues (NYSE)	2,130	1,972	1,980	1,334	1,321

 

 

 

PLEASE SEE GRADING RUBICS – To ensure assignsment done accordingly.

 

 

Weekly tasks or assignments (Individual or Group Projects) will be due by Monday and late submissions will be assigned a late penalty in accordance with the late penalty policy found in the syllabus. NOTE: All submission posting times are based on midnight Central Time.

Respond to the following scenario with your thoughts, ideas, and comments. Be substantive and clear, and use research to reinforce your ideas.

Over lunch, you and Mary meet to discuss next steps with the expansion project.

“Do we have everything we need on sales and costs?” you ask. ”It must be time to compute the net present value (NPV) and internal rate of return (IRR) of the Apix expansion project.”

“We have the data from James and Luke regarding projected sales and costs, respectively, for the food packaging project,” says Mary. “It is feasible to project that we will receive a tax break from this implementation. I have information from our audit firm that indicates that future depreciation methods for taxes will be straight-line; however, the corporate rates will be reduced to 35% as we assumed in our weighted average cost of capital (WACC) calculation.”

“That sounds good,” you say.

“Right,” says Mary. “You can use a WACC of 10% for the computation of the NPV and comparison for IRR.”

“I’ve got the information I need from Luke and James,” you say. “Does this look right to you? Here’s what they gave me,” you say, as you hand a sheet of paper to Mary.“Let’s look at this now while we’re together,” she says.

The information you hand to Mary shows the following:

• Initial investment outlay of $30 million, consisting of $25 million for equipment and $5 million for net working capital (NWC) (plastic substrate and ink inventory); NWC recoverable in terminal year
• Project and equipment life: 5 years
• Sales: $25 million per year for five years
• Assume gross margin of 60% (exclusive of depreciation)
• Depreciation: Straight-line for tax purposes
• Selling, general, and administrative expenses: 10% of sales
• Tax rate: 35%

You continue your conversation.

“It looks good,” says Mary. “Use this information from Luke and James to compute the cash flows for the project.”

“No problem,” you say.

“Then, compute NPV and IRR of the project using the Excel spreadsheet I sent earlier today,” says Mary. “Use the IRR financial function for the computation of IRR.”

“Okay,” you say. “I’ll submit my Excel file showing the computation of cash flows, NPV, and IRR by the end of week so you can look at it over the weekend.”

“Thanks,” says Mary.

Complete the above worksheet for this assignment.

 

U4IP

Points Possible 100

 

Download the Excel Spreadsheet from the Assignment List.

 

Fill in the Cash flow for each year.

 

With the following information:

 

Initial investment outlay of $30 million, consisting of $25 million for equipment and $5 million for net working capital (NWC) (plastic substrate and ink inventory); NWC recoverable in terminal year

Project and equipment life: 5 years

Sales: $25 million per year for five years

Assume gross margin of 60% (exclusive of depreciation)

Depreciation: Straight-line for tax purposes

Selling, general, and administrative expenses: 10% of sales

Tax rate: 35%

 

Use a WACC of 10%.

 

Compute, cash flows. The NPV and IRR of the project will be automatically calculated. If it does not you have made a mistake.

 

Submit the Excel Spreadsheet.

 

 

U4I: INTELLIPATH

Complete your Intellipath by Sunday

Intellipath Unit: Investment Valuation and Decision Making

Points Possible: 125

 

Try to complete your Determine Knowledge by Wednesday.

If you have problems, flag the question in Intellipath.

If you have questions, DO NOT use the Intellipath message system. Email me. Try to include a screen shot of the question.

Your path will only consist of learning nodes that you need to work on and is individualized for you, so if you have difficulty with a question you must flag the question in Intellipath.

 

 

 

 

U4IP Hints

NWC Recapture is in the fifth year. NWC is given in task list.

 

The discount rate (Cost of Capital) is given.

 

A hint: the numbers will look the same for the first 4 years,. In Year 5 it will be different due to NWC recovery.

 

Initial cash flow for year 0 is given.

 

You must put a cash flow for year 0 into your spreadsheet. It is given as initial outlay. It should be inputed as a negative quantity.

 

Sales are given (This is also called Revenue)

 

Gross margin is given.

 

Calculate: COGS (You must find the equation that gives you COGS from gross margin and sales (revenue)). Do a search on “COGS, Margin, Sales”. You must determine what is COGS.

 

Calculate SGA expense.

 

Calculate yearly depreciation, straight line for tax purposes, look this up. There is no salvage value.

 

Subtract COGS, SGA and depreciation from Sales (Revenue).

 

This gives EBT, Earnings Before Taxes, also called Operating Income.

 

Calculate Taxes on basis of EBT, tax rate is given.

 

Subtract this from EBT (Operating Income).

 

This gives Net Income.

 

Add Depreciation back in to Net Income. This gives cashflow.

 

Add NWC recovery to Net Income in the 5^th year.

 

This gives a Cashflow for each year.

 

You should enter a cashflow for each year into your spreadsheet.

Enter year 0 cash flow with a negative number: Cell B9

Enter year 1-4 (these should be the same): C9 –F9.

Enter year 5 cash flow after you have added back NWC: G9.

 

The NPV and IRR should calculate automatically. If it does not you have made a mistake.

 

To calculate depreciation:

http://www.accountingcoach.com/depreciation/explanation

 

 

By “straight-line,” we mean that the depreciation deduction is the same every year. By “written down to zero,” we mean that the asset is assumed to have no value at the end of five years, that is no salvage value.

 

Here is an online tutorial that may be of help for NWC:

http://www.analystforum.com/comment/9928845#comment-9928845

 

Here is another:

https://www.youtube.com/watch?v=SzMbBOtOuJ4