Business Finance Homework Help

Complete problems 8.1 (pages 262-263), 8.5 (page 264), and 8.6 (page 264).

Note to those using the 13th edition of the textbook: problem 8.6 is different in the 14th edition. Be sure to complete the 14th edition version of the problem, which can be found in the PDF file linked here: Screen shot 398, 399

Problem 8.1 (pages 254-255) is a matching exercise wherein you are to match 20 terms with their definitions. Problem 8.5 (page 256) asks you to describe the advantages of something you have, something you know, and something you are.

Problem 8.6 has you use the time-based model of security formula to determine which of several security investments makes the most financial sense. This problem will take a bit of time to complete correctly, so don’t procrastinate it until the last minute! To complete problem 8.6 part a you will use the time-based model of security formula (P > D + R) to evaluate the current security controls in a best-case, average-case, and worst-case scenario. If P > D + R in each case, the controls are effective (“good”). If P = D + R then the controls are neutral, and if P < D + R the controls are ineffective (“bad”).

You’ll begin by calculating the best-case scenario, where P=25. Try each value of D and each value of R to see whether P > D + R. Again if P > D + R, the controls are effective. If P = D + R the controls are neutral, and if P < D + R the controls are ineffective. Repeat for the average-case scenario (P=20) and the worst-case scenario (P=15). In each case, identify whether ABC is secure for those values of D and R.

For part b you will need to first identify all of the possible combinations that ABC can spend their $100,000. Once you have identified the possibilities, you will need to test each of those possibilities, similar to the way you did in part A. After evaluating all of the options, report which option you feel is the best investment.

To receive credit for problem 8.6 you must use Excel and use formulas for your calculations (the D + R calculations). In the solutions I have uploaded to Canvas I used conditional formatting to show good, neutral, and bad. If you haven’t used conditional formatting before, you’re welcome to highlight the cells and manually apply cell colors (such as green for good, yellow for neutral, and red for bad). There is not a requirement to use conditional formatting when completing this assignment. To help you get started, I’ve created an example spreadsheet showing how I did the calculations for part a. You can find that spreadsheet here: Screenshot 400

Note to those using the 13th edition of the textbook: problem 8.6 is different in the 14th edition. Be sure to complete the 14th edition version of the problem. A copy of the 14th edition problem is linked from the chapter 8 homework description in Canvas.