Mental models

Mental Models – Discussion 

Senge et al. (1994) described Mental Models as “images, assumptions, and stories which we carry in our minds of ourselves, other people, institutions, and every aspect of the world” (p. 235).  They limit the growth of individuals and organizations.  This happens because “new insights fail to get put into practice because they conflict with deeply held internal images of how the world works, images that limit us to familiar ways of thinking and acting” (Senge, p. 163).  They determine how people make sense of the world and how they take action (Senge, 2006) because they affect what they “see”, which is why “two people with different mental models…observe the same event and describe it differently” (Senge, p. 164).  Effectively, people will focus on different details and make different interpretations from the same event.  The discussion then becomes how do people change, or learn new, Mental Models in a learning organization so that new ideas are shared and considered freely.

1)  Read the journal, “Changing Mental Models: Business Simulation Exercise” by Scherpereel (2005) and answer the question below.

  • Can Mental Models within a team or organization be altered through simulation practice?  If so, do you believe that after the practice most team members’ decisions will be similar within a work context?
  • Have you witnessed team simulations which have altered Mental Models in the past?  If so, were they effective?

2)  From Scherpereel’s (2005) research, we learned that organizational change is possible using business simulations that induce change in participants’ Mental Models.  The Mental Model principle, the Ladder of Inference, maps the steps our thinking process follows to go from an observable experience to an action (Senge et al., 1994).  After watching the TED-Ed video called “Rethinking Thinking”, found in the reference list, answer the following question.

  • You’ve decided to use the Ladder of Inference in a simulation with your team. What organizational experience would you use to show them how individual or group actions are affected by their beliefs?

 

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What’s the abbreviation for the overall return that a firm must make

1.   What’s the abbreviation for the overall return that a firm must make on its existing assets, used as the required rate of return on any investment that has essentially the same risks as existing operations? 

     

  A. WACC 

  B. ROE 

  C. CM 

  D. NPV 

2.   Analysts project Microsoft (MSFT) will have an annualized dividend of $1.50 and a long-term growth rate of 10 percent. Currently, the stock price is $60. Using the dividend growth model approach, what’s the implied cost of equity? 

     

  A. 12.5 percent 

  B. 11 percent 

  C. 10 percent 

  D. 2.5 percent 

3.   New Schools expects an EBIT of $87,000 every year, forever. The firm currently has no debt, and its cost of equity is 14.6 percent. The firm can borrow at 7.4 percent, and the corporate tax rate is 34 percent. What will the value of the firm be if it converts to 50 percent debt? 

     

  A. $460,146.57 

  B. $381,796.47 

  C. $377,407.16 

  D. $437,552.08

4.   Galaxy Products is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 175,000 shares of stock outstanding. Under Plan II, there would be 90,000 shares of stock outstanding and $1.4 million in debt. The interest rate on the debt is 7 percent, and there are no taxes. What’s the break-even EBIT? 

     

  A. $201,764.71 

  B. $341,414.14 

  C. $351,111.11 

  D. $287,878.78 

5.   What’s the concept of using debt to make a return known as? 

     

  A. Debt reliance 

  B. Financial liquidity 

  C. Debt coverage 

  D. Financial leverage 

6.   Because the WACC varies with the use of funds rather than the source of funds, some firms evaluate new projects by sorting projects into risk classes, and add or subtract adjustment factors from the WACC. This approach is called the 

     

  A. DuPont approach. 

  B. divisional approach. 

  C. pure play approach. 

  D. subjective approach. 

7.   According to the static tradeoff theory, what’s the optimal capital structure? 

     

  A. A firm should borrow up to the point at which the tax benefit from an extra dollar in debt is exactly equal to the cost that comes from the increased probability of financial distress. 

  B. A firm should borrow up to the point at which the tax benefit from an extra dollar is equal to zero. 

  C. A firm should have equal parts equity and debt. 

  D. A firm should borrow up to the point at which the interest is equal to the total tax expense. 

 

8.   Which of the following is not a major disadvantage to the SML approach? 

     

  A. We rely on the past to predict the future, and economic conditions can change quickly. 

  B. It requires that we estimate the market risk premium, and if this estimate is poor, the resulting cost of equity will also be poor. 

  C. It requires that we estimate the beta coefficient of the stock, and if this estimate is poor, the resulting cost of equity will also be poor. 

  D. It doesn’t explicitly adjust for risk

9.   Silo Mills is an all-equity financed firm that has a beta of 1.14 and a cost of equity of 12.8 percent. The risk-free rate of return is 2.8 percent. The firm is currently considering a project that has a beta of 1.03 and a project life of six years. What discount rate should be assigned to this project? 

     

  A. 13.62 percent 

  B. 11.84 percent 

  C. 13.33 percent 

  D. 12.09 percent 

 

10.   Which of the following is true about a firm with no equity financing? 

     

  A. The after-tax cost of debt = WACC 

  B. The return on equity = WACC 

  C. The cost of debt = WACC 

  D. The return on equity = cost of debt 

11.   A higher debt level usually equates to a 

     

  A. larger tax shield and decreased financial risk. 

  B. smaller tax shield and increased financial risk. 

  C. larger tax shield but increased financial risk. 

  D. smaller tax shield and decreased financial risk. 

12.   Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, how long after a firm files for bankruptcy protection do creditors have to wait before submitting their own reorganization plan to the court? 

     

  A. 18 months 

  B. 45 days 

  C. 180 days 

  D. 12 months 

13.   Alphabet, Inc. (GOOGL) has a 40 percent debt/asset ratio; assume a tax rate of 16 percent. The average yield to maturity on GOOGL’s bonds is 3 percent. Your market analyst estimates that the risk-free rate is 1 percent and that the market risk premium is 7 percent. The firm’s beta coefficient is 0.97. What’s Alphabet’s weighted average cost of capital (WACC)? (Round to the nearest tenth of a percent.) 

     

  A. 6 percent 

  B. 5.7 percent 

  C. 5.9 percent 

  D. 7.3 percent 

14.   The Shoe Outlet has paid annual dividends of $.65, $.70, $.72, and $.75 per share throughout the last four years, respectively. The stock is currently selling for $9 a share. What’s this firm’s cost of equity? 

     

  A. 11.79 percent 

  B. 9.53 percent 

  C. 13.65 percent 

  D. 8.74 percent 

15.   Deep Mines has 14 million shares of common stock outstanding with a beta of 1.15 and a market price of $42 a share. There are 900,000 shares of 9 percent preferred stock outstanding, valued at $80 a share. The 10 percent semiannual bonds have a face value of $1,000 and are selling at 91 percent of par. There are 220,000 bonds outstanding that mature in 17 years. The market risk premium is 11½ percent, T-bills are yielding 7½ percent, and the firm’s tax rate is 32 percent. What discount rate should the firm apply to a new project’s cash flows if the project has the same risk as the firm’s typical project? 

     

  A. 14.72 percent 

  B. 13.15 percent 

  C. 15.54 percent 

  D. 14.59 percent

16.   Hanover Tech is currently an all-equity firm that has 320,000 shares of stock outstanding with a market price of $19 a share. The current cost of equity is 15.4 percent, and the tax rate is 34 percent. The firm is considering adding $1.2 million of debt with a coupon rate of 8 percent to its capital structure. The debt will be sold at par value. What’s the levered value of the equity? 

     

  A. $5.209 million 

  B. $6.708 million 

  C. $6.512 million 

  D. $5.288 million 

17.   Mulberry, Inc. has a weighted average cost of capital (ignoring taxes) of 20 percent. It can borrow at 10 percent. Mulberry has a target ½ debt/equity ratio. Using the M&M Proposition II, what’s the cost of equity? 

     

  A. 29 percent 

  B. 25 percent 

  C. 31 percent 

  D. 15 percent 

18.   Flotation costs are the costs associated with 

     

  A. market inefficiencies. 

  B. reporting. 

  C. bankruptcy. 

  D. new stock or bond issues. 

19.   The dividend growth model is used to calculate 

     

  A. the cost of debt by using the equation for a growing perpetuity, plugging in the current price of the bond, the coupon, and the expected growth rate and solving for R(D). 

  B. the weighted average cost of capital by using the equation for a growing perpetuity, plugging in the current price of the stock, the dividend paid, and the expected growth rate. Then we solve for R(E). 

  C. the cost of equity by comparing the dividend growth to similar firms. 

  D. the cost of equity by using the equation for a growing perpetuity, plugging in the current price of the stock, the dividend paid, and the expected growth rate. Then we solve for R(E). 

 

20.   Amazon Inc. (AMZN) has 55 percent equity-to-asset ratio. The average yield to maturity on AMZN’s bonds is 3.2 percent; assume a tax rate of 30 percent. The firm’s estimated required rate of return on equity is estimated at about 10.8 percent. What’s Amazon’s weighted average cost of capital (WACC)? (Round to the nearest tenth of a percent.) 

     

  A. 6.1 percent 

  B. 7.3 percent 

  C. 6.6 percent 

  D. 6.9 percent 

Term paper for arth200 | arth200 | American Public University

Assignment Instructions
Final Term Paper (Power Point Presentation) Guidelines
Your  Power Point Presentation is due at the end of Week 7.  Visit the APUS online library, look at the course guides and optionally use the “Ask the Librarian” resource to help you locate scholarly references. They have electronic rights to JSTOR, which is a journal storage database and other data bases. Choose one artist or architect that is included in any week of our course lessons, readings, or other areas. In this essay, fully discuss the artist and two art samples.  Your paper should include:

2 page (250 word each) biography of the artist/architect of your choice.  500 words overall.
2 page (250 word each) Description, formal analysis, and interpretation of 1 work of art/architecture by that artist  (500 words overall)
A bibliography listing 3-5 sources.
Upload your presentation to Assignment Folder in Week 7 and Place an ungraded copy of the presentation on the Forum in Unit 8.
You may use as many Power Point slides as it takes to meet the word requirements (1,000 words overall,)  not including the bibliography.

It is best to choose an artist we have studied in the class, but it doesn’t have to be. Do not include any artwork that you have already written about in class.  The biography of the artist should be 2 pages in length (250 word per page) and the analysis of one of their artworks should be 2 pages (250 words per page) in length.  Include a bibliography listing three to six sources.  The analysis portion of this assignment must follow the Writing a Critique format you used for your Museum Paper, namely describe, formally analyze and interpreting. 
I WANT TO WRITE ABOUT THE ARTIST “Dorothea Lange.”

Health care organization senior executive interview

For this assignment, you are required to interview a senior executive of a health care organization. You must ask the following questions and also come up with two additional questions of your own in preparation for the Operations Analysis Diagram assignment (Please list all 7 questions at the top of the paper, last 2 you can create):

1) What type of health care organization are you affiliated with? What is your position within the health care organization? Describe your role and scope of responsibilities.

2) Describe the relationship between your health care organization’s vision, mission, goals, and strategic plan.

3) Tell me about a time your organization’s operational performance affected, either positively or negatively, its ability to deliver services and achieve performance goals.

4) Describe the process you take to deliver a particular type of service offered by your health care organization.

5) Describe one aspect of your business operations.

6)

7)

Submit a short reflection, 200-250 words, of your interview experience along with your interview questions and responses. Your reflection should include the following:

1) Your reaction to the interviewee’s response to each question. Were you surprised? Did you agree or disagree and why?

2) Additional questions you have or information you would like to have had based upon the interviewee’s response. 

Prepare this assignment according to the APA guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required. 

Post your interview questions, including the two additional you developed, responses, and reflection to your instructor for this module and to the discussion forum under the appropriate thread in Module 4.