Finance Essays (Examples)
Study Document
How Amazon Hedges Its Forex Risk
...Finance Abstract
Amazon operates in 58 countries, and while its international operations tend to be offsetting in terms of costs and revenues, there still foreign currency profits that end up being translated back to Amazon’s financial statements. This creates translational risk for the company. The operating offsets mean that Amazon doesn’t need to utilize hedging strategies, but tactics like offsetting costs and revenues, and diversification of international operations, help Amazon reduce the translational risk that it faces. This paper will examine what foreign currency exchange rate risks Amazon faces, and what tactics it undertakes to mitigate these risks on its income statement and balance sheet.
Introduction
Amazon has online retail operations in 58 countries around the world, and these are typically priced in local currency. This has implications for the company’s strategies with respect to foreign exchange risk, and foreign exchange cash flows. The use of local pricing is aided, however,……
References
References
Amazon 2019 Annual Report. Retrieved April 29, 2020 from https://s2.q4cdn.com/299287126/files/doc_financials/2020/ar/2019-Annual-Report.pdf
HowMuch.net (2019) Charting the most powerful reserve currencies in the world. HowMuch.net. Retrieved April 29, 2020 from https://howmuch.net/articles/worlds-top-reserve-currencies-2019
Mehta, N., Detroja, P. & Agashe, A. (2018) Amazon changes prices on its products about every 10 minutes – here’s how and why they do it. Business Insider. Retrieved April 29, 2020 from https://www.businessinsider.com/amazon-price-changes-2018-8
Reiff, N. (2020) Hedge. Investopedia. Retrieved April 29, 2020 from https://www.investopedia.com/terms/h/hedge.asp
Roamy (2019) The consequences of Amazon’s pricing power. Medium.com. Retrieved April 29, 2020 from https://medium.com/goods-services/https-medium-com-goods-services-amazons-pricing-power-797e28b63fbd
Statista (2019) Annual net sales of Amazon in selected leading markets from 2014 to 2019. Statista. Retrieved April 29, 2020 from https://www.statista.com/statistics/672782/net-sales-of-amazon-leading-markets/
Study Document
Taxation IRAs 401Ks And The IRS
...Finance Simple IRA and Qualified Plans
1. A simple IRA has both advantages and disadvantages when compared to a qualified plan like a 401K. Both are tax-deferred savings accounts, but where the differences lay could matter for a company like 3P. These two types of plan are mutually exclusive – an employer cannot have both at the same time (Appleby, 2019).
However, with a simple 401K the employer could have another plan for employees who aren’t covered by the 401K, which would typically be employees who earn less than $5000 per year. This may not apply to very many people, but could theoretically be one of the differences between the two types of retirement plan. Employees under 21 or who have worked for less than a year may or may not be covered, but there is no age requirement for a simple IRA. If the company has a lot of younger……
References
References
Appleby, D. (2019) Simple IRA vs Simple 401K: What’s the difference? Investopedia. Retrieved April 2, 2020 from https://www.investopedia.com/articles/retirement/04/060904.asp
IRS.gov (2020) Retirement topics – IRA contribution limits. Internal Revenue Service. Retrieved April 2, 2020 from https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits
IRS.gov (2020) Contribution and deduction limits. Internal Revenue Service. Retrieved April 2, 2020 from https://www.irs.gov/retirement-plans/plan-participant-employee/2020-ira-contribution-and-deduction-limits-effect-of-modified-agi-on-deductible-contributions-if-you-are-covered-by-a-retirement-plan-at-work
Study Document
Net Worth Theory And Corporate Fraud
...Finance Danske Bank's Money Laundering Scandal
Madinger (2006) points out that the net worth method is among the most common used in accounting forensics when it comes to detecting illegal income, such as by way of money laundering. The case of Danske Bank and its money laundering escapades from 2007 to 2015 through an Estonian branch where a quarter of a trillion dollars flowed is a prime example of a situation in which the net worth method could be applied to investigate this corporate fraud.
As Schwab (1961) states, the net worth theory rests upon the idea that if one’s net increase exceeds the income reported, the corporation has understated its income; additionally, “if there is no increase in net worth but if the taxpayer has expended larger amounts than his reported income on nondeductible items, there has been an understatement of income” (p. 78). With Danske Bank, billions were passing……
References
References
IRS. (2017). Retrieved from https://www.irs.gov/irm/part9/irm_09-005-009
Madlinger, J. (2006). Money laundering: A guide for criminal investigators. CRC Press.
Milne, R. & Winter, D. (2018). Danske: anatomy of a money laundering scandal. Retrieved from https://www.ft.com/content/519ad6ae-bcd8-11e8-94b2-17176fbf93f5
Schwab, R. D. (1961). The Civil Aspects of the Net Worth Method. Wm. & Mary L. Rev., 3, 65.
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The Global Financial Crisis Money Laundering
...Finance Money Laundering: The Global Financial Crisis
There is disturbing evidence that money derived from the illegal sale of drugs was one of the primary means through which some banks remained solvent through the global financial crisis of 2008. According to Rajeev Syal of The Guardian, “Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities,” resulting in the rescue of banks that otherwise could not have stayed solvent. Although this might seem to be a benefit for society, it does not exculpate the violent crimes which occur as the result of the drug trade. Unfortunately, this means that there may be an incentive not to be fully vigilant about the sources of money still necessary for some banks to thrive and underlines the dark side of the banking industry. It may also cause banks to subtly pressure for less regulation of money laundering in……
References
Bibliography
Rajeev Syal, ‘Drug money saved banks in global crisis, claims UN advisor,’ The Guardian (London, 13 Dec 2009) accessed 13 September 2019
Study Document
Capital Budgeting Bullock Gold
...Finance [calculations available in full version]
The calculations were done in Excel, except the payback period. This was done starting at -850 and then adding back each year's cash flow. Year 5 started with a deficit of 20, which amounts to 31 days worth of payback, in other words the payback will be complete by the end of January in Year 5.
2. Based on this analysis, the company should open the mine. There are several reasons why. First, there is no rule of thumb for Bullock with respect to payback period – and once the project has started it will be finished, so that is not really a great way to analyze the problem.
Second, IRR and MIRR are both above the cost of capital, which is assumed to be the company's hurdle rate of 12%. A project that returns above the cost of capital is normally a viable one.……
Study Document
Digital Era And Taxation
...Finance To Choose an Accounting Topic That Would Be Excellent for A Dissertation.
Research Topic
Taxation in the digital era is an excellent topic for a dissertation because there is an ongoing debate on whether digital companies are paying their fair share of taxes. Some tax experts believe that digital companies enjoy tax levels close to zero compared to traditional companies, yet they earn huge profits. The underlying principle of corporate taxation is that \"profit should be taxed where value is created\" (Sestakova, 2018). However, digitalization challenges this principle because of it difficult to pin down how and where digital companies create value. Also, digital companies rely heavily on intangible assets, big data, and which is hard to value (Sand- Zantman, 2018). Given this fact, there is a need to research problems that tax accountants face when taxing digital profits.
The above topic is relevant when examined from the technological perspective……
References
References
Committee of Experts on International Cooperation in Tax Matters. (2019). Tax Issues related to the Digitalization of the Economy: Report (E/C.18/2019/CRP.12). https://www.un.org/esa/ffd/wp-content/uploads/2019/04/18STM_CRP12-Work-on-taxation-issues-digitalization.pdf
Katz, R. (2015). THE IMPACT OF TAXATION ON THE DIGITAL ECONOMY. https://www.itu.int/en/ITU-D/Conferences/GSR/Documents/GSR2015/Discussion_papers_and_Presentations/GSR16_Discussion-Paper_Taxation_Latest_web.pdf
Pemerathna, A. (2016). Economic impact of digital taxation: A case on information communication technology industry Sri Lanka. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2910328
Sand-Zantman, W. (2018). Taxation in the Digital Economy. https://www.orange.com/fr/content/download/47110/1371114/version/1/file/Rapport%20TAXATION-VF-Mai2018.pdf
Sestakova, M. (2018, February). Tax Challenges of the Digital Economy [Paper presentation]. Management Challenges in the 21st Century, Bratislava, Slovakia.
Study Document
Enron Corporate Scandal And Microeconomics
...Finance Microeconomics
Enron Corporation is an example of one of the largest corporate scandals in the history of the United States. Given a series of corporate mismanagement, Enron is regarded as a shocking example of corporate corruption in the modern business world. The company took 16 years to increase its assets from 10 billion to 65 billion, which was significantly reduced in 24 days (Gibney, 00:00:38-00:00:47). Enron’s corporate scandal has been the subject of numerous studies within the business sector as it offers significant lessons on economics and corporate management. Alex Gibney’s film Enron: The Smartest Guys in the Room provides insights on various topics that are relevant to microeconomics in relation to Enron corporate scandal.
One of the topics discussed in the video relating to microeconomics is market regulation, which is a board term used to refer to government policies that regulate the market. Market regulation is evident in the……
References
Works Cited
Amadeo, Kimberly. “Deregulation Pros, Cons, and Examples.” The Balance, The Balance, 16 Jan. 2020, https://www.thebalance.com/deregulation-definition-pros-cons-examples-3305921
Gibney, Alex, director. Enron: The Smartest Guys In the Room. YouTube, Magnolia Pictures, 20 Oct. 2009, https://www.youtube.com/watch?v=BIwFO4_SWQQ&has_verified=1
Kienitz, Paul M. “ENRON: THE SMARTEST GUYS IN THE ROOM (2005).” Paulkienitz.net, Paulkienitz.net, https://paulkienitz.net/enron/smartest-guys.html
Study Document
The Government S Economic Policies Effect Good Or Bad Economy
...Finance Introduction
Public policy is government decisions and actions designed to deal with problems and issues affecting the public (Madimutsa, 2008). The U.S. government policy areas include monetary policy, immigration, intellectual property, national defense, and welfare. This paper will review the impact of monetary policy on the U.S. economy.
Monetary Policy
Monetary policy is classified as the procedure by which the Federal Reserve uses monetary policy tools to regulate the money supply, exchange rate, and interest rates (the price of money) to stabilize the economy (Labonte, 2020). The interest rate is classified as the cost of borrowing and the reward for saving. The money supply can be defined as the total sum of money that is available in the economy. The exchange rate is the cost of the domestic currency concerning other currencies. The Fed uses various monetary tools, but over the years, they have relied on open market operations and……
References
References
Federal Reserve. (2020, March 15). Federal open market committee. Retrieved March 30, 2020, from https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm
Labonte, M. (2020). Monetary policy and the Federal Reserve: Current policy and conditions (RL30354). Retrieved from Congressional Research Service website: https://fas.org/sgp/crs/misc/RL30354.pdf
Madimutsa, C. (2008). The Policy Formulation Process. Retrieved from https://www.researchgate.net/publication/336927323_The_Policy_Formulation_Proce ss
McGraw-Hill Education. (n.d.). The role of government. Retrieved from https://www.jasonsclassroom.com/social-studies/cc-basics/chapter-5/lesson-5.3/
Suman, S. (2015, October 26). Monetary policy: Objectives, advantages, and disadvantages. Retrieved from https://www.economicsdiscussion.net/monetary-policy/advantages/monetary-policy-objectives-advantages-and-disadvantages/12768
Study Document
Banking Industry Crimes
...Finance Financial Crimes, Fraud, and Investigation
The banking sector is a critical part of a country’s economy. This is more so the case given that it is actively involved in the holding as well as management of diverse financial assets and the coordination of financial activities for the various other economic sectors. Although at the core of banking is holding of financial assets, other key activities include, but they are not limited to, commercial and personal banking services, insurance, etc. In that regard, therefore, banks happen to be one of the most sensitive sectors in an economy. Bank managers have a responsibility to ensure that all the regulatory standards are observed. Further, they also have a responsibility to ensure that the interests of various stakeholders in the banking sector are secured. The key stakeholders, from the perspective of a bank institution are inclusive of the government and the various regulatory agencies,……
References
References
Albrecht, W.S., Albrecht, C.C., Albrecht, C.O. & Zimbelman, M.F. (2008). Fraud Examination (3rd ed.). Mason, OH: Cengage Learning.
Dionne, B. (2020). Regions Bank Teller Accused of Stealing Customer Identities Faces Felony Charges. Retrieved https://www.wbrc.com/2020/01/30/regions-bank-teller-accused-stealing-customer-identities-facing-felony-charges/
Golden, T.W., Skalak, S.L. & Clayton, M.M. (2006). A Guide to Forensic Accounting Investigation. Hoboken, NJ: John Wiley & Sons.
Krancher, M., Riley, R. & Wells, T.J. (2010). Forensic Accounting and Fraud Examination. Hoboken, NJ: John Wiley & Sons.
Singleton, T.W., Singleton, A.J. & Bologna, R.J. (2006). Fraud Auditing and Forensic Accounting (3rd ed.). Hoboken, NJ: John Wiley & Sons.
Zagaris, B. (2010). International White Collar Crime: Cases and Materials. New York, NY: Cambridge University Press.
Study Document
The Phillips Cure And Unemployment
...Finance The Short-Run and Long-Run Relationship between Unemployment and Inflation
Introduction
Phillips observed a consistent inverse relationship between wage inflation and unemployment when he analyzed data from the UK spanning nearly a century from 1861 to 1957. The explanation Phillips gave was simple: the lower the unemployment rate, the more employers had to do to attract talent and raising wages was one of the primary ways to do just that (Wulwick, 1987). In a tight labor market, companies would race to quickly raise wages, and during periods of higher unemployment there would be less pressure to incentivize workers as the latter would consider themselves fortunate just to have a job. Since wages offered laborers are linked to prices businesses charge consumers (Lucas & Rapping, 1969), it was not long before economists applied the Phillips curve to inflation in general rather than to only wages. It became evident that monetary policy could……
References
References
Amadeo, K. (2019). Unemployment rate by year since 1929 compared to inflation and GDP. Retrieved from https://www.thebalance.com/unemployment-rate-by-year-3305506
FRED. (2019). FRED Graph. Retrieved from https://fred.stlouisfed.org/series/LNU04000024#0
Friedman, M. (1977). Nobel lecture: inflation and unemployment. Journal of political economy, 85(3), 451-472.
Heller, R. (2017). Monetary mischief and the debt trap. Cato Journal, 37(2), 247-261.
Lucas, R. E., & Rapping, L. A. (1969). Price expectations and the Phillips curve. The American Economic Review, 59(3), 342-350.
Stiglitz, J. (1997). Reflections on the natural rate hypothesis. Journal of Economic Perspectives, 11(1), 3-10.
Wulwick, N. J. (1987). The Phillips curve: which? whose? to do what? how?. Southern Economic Journal, 834-857.
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