The fundamental components to estimate their hurdle rate

Question: When exploring the Weighted Average Cost of Capital (WACC) we were introduced to the fundamental components that firms use to estimate their hurdle rate. Berk and DeMarzo (2020) interviewed Shelagh Glaser, the then VP of finance and the controller at the Client Computing Group at Intel about their WACC estimates (see page 434). In this interview, she highlighted the inputs that her firm uses to calculate their WACC and provides numerous examples of inputs that they must consider when they re-estimate their WACC each year. Highlight two of these inputs and indicate how changes in these inputs are likely to impact Intel’s hurdle rate; in addition, illustrate how these changes impact the projects that a firm accepts. Include at least two citations that support your response.
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Sample Solution

When estimating their Weighted Average Cost of Capital (WACC), firms such as Intel must consider a number of inputs when re-calculating their hurdle rate each year. Shelagh Glaser, the then VP of finance and controller at Intel’s Client Computing Group highlighted two primary inputs that must be taken into account: perceived risk and expected return (Berk & DeMarzo, 2020).

The level of perceived risk has a direct influence on the cost of equity which is used to calculate WACC. If investors perceive higher levels of risk associated with a firm, then they will demand higher returns for investing in its stock thus driving up WACC (Moyer et al., 2021). For example if Intel’s competitors increase their market share or new technologies emerge that disrupt the industry this could lead to investor uncertainty resulting in a higher required return thus raising WACC. On the other hand if Intel can demonstrate greater stability through product innovation or enhanced corporate governance practices this may result in lower perceived risk and subsequently lower costs of equity.

Intel also must take into account changes to expected returns when calculating its WACC since it reflects how investors value different investments over time. This includes considering both macroeconomic conditions such as inflation rates, GDP growth etc., as well as industry specific factors like competition (Gitman et al., 2020). Changes in either area affect investor sentiment regarding different types of securities which therefore impacts what kind of return they expect from investing in certain companies.

In conclusion then, changes to perceived risks and expected returns are two key inputs that firms such as Intel use when calculating their WACC. Increases to either one have implications for companies’ hurdle rates which ultimately influences whether projects get accepted or rejected due to differences between estimated cash flows and required returns.

Reason and Significance The motivation behind the present unmistakable correlational review is distinguishing indicator factors that will help determination panels of nursing projects to decide models of confirmations which most precisely measure the potential for effective finish inside the endorsed curricular time period. Screening and specific confirmations processes for nursing programs are important to choose the top, probably going to succeed understudies to utilize the restricted employees and affirmation spaces. Graduates should be mindful, skilled, and equipped for giving quality medical services; and, they should be instructively ready to pass public ability certificate and licensure tests. Cautious consideration should be paid to the choice of the measures that will be utilized in screening candidates. Albeit many methodologies and mixes of rules have been utilized before, it is more vital than any other time to screen candidates with instruments that best foresee the graduation of understudies, as well as their prosperity on confirmation and licensure tests. Accordingly, this exploration will be valuable for helping nursing program choice councils in deciding affirmation rules that most precisely gauges the potential for effective finish.

 

Research Questions ‘ Is there a feasible and quantifiable arrangement of indicator factors that can foresee the outcome of understudies in nursing programs? ‘ Is there a quantifiable connection between’s confirmation rules of a nursing projects and graduation rates? ‘ Is there one confirmation rules that actions program achievement more successfully than some other? ‘ According to the understudy is the nursing program generally speaking GPA, A&P, HESI leave test, or mental capacity the most reliable autonomous indicator of NCLEX achievement?

 

Restrictions and Delimitations Limitations The review will endeavor to eliminate however much predisposition as could reasonably be expected and to limit inclination that objectivity is kept up with. A restriction will be the accessibility of the objective exploration bunch, medical caretakers who have been working in various nursing homes and clinics of Missouri. The objective gathering will be attendants who have effectively finished their nursing programs and have been capable adapt up to hardships which happened during this program. As the members of the examination will be chosen from the accessible populace consequently, research instances of definitions will be given to the attendants to their accommodation. It is expected that all overview members will honestly validate that they are a piece of the objective section as characterized and fall inside the reach wanted as far as their effective fulfillment of nursing program for the examination study. Notwithstanding, some email locations might be problematic, and a few beneficiaries of the email greeting will be reluctant to partake. The proposed study is restricted by the accessible monetary assets to lead the exploration; in this manner, the outcomes will be summed up just to those answering the examination overview.

 

Delimitation Nurses to be studied are available because of the scientist’s broad organization of contacts in Missouri. The members have email accounts, which will give admittance to support in the poll. One more delimiting factor is the accessibility of the designated research gathering to partake in a web-based study. Research in the scholarly world is being moved from paper and pencil to online overviews. Welcoming populace portions to visit a site for the motivations behind finishing a poll is considerably more open and helpful for members, in this way giving the scientist more prominent admittance to members and a more significant level of support achievement. Considering that the populace to be reviewed for this examination has been the focal point of many investigations, the information gathered will give new bits of knowledge to decide the indicators of understudy outcome in nursing programs.

eview of Literature Nursing Curricula in the United States Research on nursing educational plans in the United states had confirmed that the country’s nursing deficiency was serious that momentum enlisted medical caretakers couldn’t be viewed as a solid labor force asset later on, and that nursing curricular substance should have been addressed to meet medical care necessities by Year 2020. Accessible information proposed that simply 25% to half of the attendants who moved on from nursing schools would go on in their vocations following five years in the calling. Notwithstanding the anticipated lack of around 800,000 medical caretakers, or 29%, by 2020, a Health Affairs report in 2007 anticipated the deficiency of attendants to be 340,000 by 2020. The modified report actually showed that

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