Hello Please see attachment
Instructions:
There are two questions on this IMPORTANT assignment. Provide an organized, thorough response to each question.
Answers are going to be assessed (graded on both content and organization). Please be sure to address the question asked… Lastly, please be sure to cite all resources used.
Question 1
How do corporations determine which risk financing measures are optimal for their organization? Make sure your answer includes a discussion of risk financing goals as well as firm specific and risk specific characteristics. Be sure to cite any sources used.
Question 2
In the early 2000’s Swiss Re entered into a few new risk financing transactions. Some of these transactions provided risk financing for their clients for more than 10 years. Describe Swiss Re’s Committed Long-Term Capital Solutions (CLOCS) and how they are related to risk financing and contingent capital (see Culp, 2002). Make sure your answer discusses the advantages and disadvantages of such risk financing structures and how they may help corporations achieve their risk financing goals. Also, be sure your answer addresses whether these types of risk financing instruments are necessary (or the market conditions that may make them more relevant in the future). Be sure to cite all your sources.
Briarwood Rental, INC
BALANCE SHEET
as of December 31st, 2017
| ASSETS | |||||||
| Current Assets: | |||||||
| Cash | $ 1,000,000.00 | ||||||
| Accounts Receivable | $ 300,000.00 | ||||||
| Notes Receivable | $ 200,000.00 | ||||||
| Inventory | $ 1,500,000.00 | ||||||
| Other Current Assets | $ 3,000,000.00 | ||||||
| Total Current Assets | $ 6,000,000.00 | ||||||
| Long Term Assets: | |||||||
| Buildings | $ 13,000,000.00 | ||||||
| Less Depreciation | $ (1,900,000.00) | ||||||
| Property and Equipment | $ 1,000,000.00 | ||||||
| Less Depreciation | $ (600,000.00) | ||||||
| Total Long Term Assets | $ 11,500,000.00 | ||||||
| TOTAL ASSETS | $ 17,500,000.00 | ||||||
| LIABILITIES: | |||||||
| Current Liabilities: | |||||||
| Accounts Payable | $ 1,500,000.00 | ||||||
| Bank Loans | $ 800,000.00 | ||||||
| Notes Payable | $ 200,000.00 | ||||||
| Other Current Liabilities | $ 1,500,000.00 | ||||||
| Total Current Liabilities | $ 4,000,000.00 | ||||||
| Long Term Liabilities | |||||||
| Mortgage | $ 8,500,000.00 | ||||||
| Other | $ 1,000,000.00 | ||||||
| Total Long Term Liabilities | $ 9,500,000.00 | ||||||
| TOTAL LIABILITIES | $ 13,500,000.00 | ||||||
| Stockholder's Equity: | |||||||
| Common Stock | $ 3,500,000.00 | ||||||
| Retained Earnings | $ 500,000.00 | ||||||
| TOTAL STOCKHOLDER'S EQUITY | $ 4,000,000.00 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | $ 17,500,000.00 | ||||||
