Question and Answer Format
1-Compare the existing internal control environment at Microsoft to management’s responsibility for designing effective internal controls outlined in the textbook, and identify the deficiencies that existed. Speculate on what types of internal controls could have been designed to detect the accounting irregularities, and provide at least two reasons why the internal controls that were in place at Microsoft were not effective in detecting the accounting errors. Provide specific examples.
2-Discuss the importance of senior management in setting the tone at the top for honesty and integrity within a company. Identify at least two consequences of management not establishing a code of ethics, and describe the impact on the internal control environment. Provide examples.
“Financial Options and Weighted Average Cost of Capital (WACC)” Please respond to the following:
· 3-Determine two to three (2-3) methods of using stocks and options to create a risk-free hedge portfolio. Support your answer with examples of these methods being used to create a risk-free hedge portfolio.
· 4- From the scenario, create a unique hypothetical weighted average cost of capital (WACC) and rate of return. Recommend whether or not the company should expand, and defend your position.