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About Warren D. Miller, CFA, ASA, CMA, CPA
Expertise
My in-depth knowledge of economics is confined to three sub-disciplines: Austrian economics, industrial organization, and evolutionary economics. Other questions dealing with macroeconomics, the traditional neoclassical paradigm, labor economics, environmental economics, agricultural economics, health economics, and so on should go to those who have the appropriate expertise. N.B.: I DO NOT ANSWER QUESTIONS MARKED 'PRIVATE' because I believe that knowledge should be shared, not hoarded. I also believe that such questions are likely to come those trying to cheat. Similarly, as one who was a full-time academic for half a decade, I can recognize test and homework questions several time zones away. Therefore, please do not demean yourself by submitting such questions to me. Those who do so are cheating, pure and simple, and I WILL call you out publicly if I believe you are doing so. I have a zero-tolerance policy where cheating and dishonesty are concerned. In addition, please don't imitate the businessman who posted a request for help in August 2008. He expressly denied that he was seeking "investment advice" and said that his query was for, and I quote, "educational and informational purposes." Later, he allowed as how his questions related to the possible purchase of a $500K piece of equipment. I said I thought he had misrepresented himself. Bottom line: high-end business consulting is how I make my living. I am the sole support for my family. Please respect that fact and don't try to get for free what our clients pay for. If your company is big enough to have a sophisticated problem, it's big enough to pay for the kind of expert advice we provide. Beckmill Research, LLC, is a 95-octane firm. We're small, but we've been at this for nearly 18 years. We know what we're doing. Finally, please DO NOT ask for investment advice. I am not licensed to provide such advice. If you want such advice, check with your financial planner or other financial adviser.

Experience
I work with Austrian economics (which is different in major respects from the traditional neoclassical model), industrial organization (which is about industry structure, conduct, and performance), and evolutionary economics (almost, but not quite, the economic analog of its biological counterpart) everyday in my work. I appraise closely-held businesses, provide exit-planning services, and offer high-level strategic analysis, advice, and clients to CEOs and owners of mid-sized businesses. Understanding, applying, and writing about these disciplines is an essential part of how I have made my living since 1993.

Organizations
CFA Institute, Strategic Management Society, American Society of Appraisers, Institute of Management Accountants, Academy of Management, Culver Legion

Publications
CFA Magazine, Strategic Finance, Valuation Strategies, Value Examiner, Journal of Advanced Property Economics, Harvard Business Review, American Fly Fisher, CFA Digest, CPA Expert, and Business Valuation Review, among others

Education/Credentials
MBA - Oklahoma State (1991) BBA - U. of Oklahoma (1975) Chartered Financial Analyst designation (2006) Accredited Senior Appraiser (2006) Certified Management Accountant (1992) Certified Public Accountant (1992)

Past/Present Clients
Confidential

You are here: Experts > Arts/Humanities > Social Science > Economics > Cheating

Economics - Cheating

Expert: Warren D. Miller, CFA, ASA, CMA, CPA - 10/26/2009

Question
Hi Warren,
I am about to go crazy trying to answer the questions below. I tried using this finance book but was unsuccessful. Do you think you can help me out in any way. Thank you for taking the time just to read this. Finance is not my subject.

The Nitram Corporation is considering investing in a new cane manufacturing machine that has an estimated life of three years. The cost of the machine is $30,000 and the machine will be depreciated straight line over its three-year life to a residual value of $0.

The cane manufacturing machine will result in sales of 2,000 canes in year 1. Sales are estimated to grow by 10% per year each year through year three. The price per cane that Nitram will charge its customers is $18 each and is to remain constant. The canes have a cost per unit to manufacture of $9 each.

Installation of the machine and the resulting increase in manufacturing capacity will require an increase in various net working capital accounts. It is estimated that the Nitram Corporation needs to hold 2% of its annual sales in cash, 4% of its annual sales in accounts receivable, 9% of its annual sales in inventory, and 6% of its annual sales in accounts payable. The firm is in the 35% tax bracket, and has a cost of capital of 10%.

a.What is the incremental EBIT in the first year for the Nitram Corporation's project?

b.What is the depreciation tax shield for the Nitram Corporation's project in the first year? Explain what this means.

c.What is the amount of incremental income taxes that the Nitram Company will pay in the first year on this new project?

d.What is the required net working capital in the first year for the Nitram Corporation's project?

e.What is the required net working capital in the second year for the Nitram Corporation's project?

Answer
Moe, you apparently know my name, but you didn't take the time to read my profile. You need to do that: www.allexperts.com/ep/2301-84697/Economics/Warren-D-Miller.htm.

In my experience, people who mark their questions "Private" are cheating because they are asking me either to do their homework or to take their tests for them. They also don't want their instructors and classmates knowing that they're cheating. And they're often ashamed, which is why they don't want anyone else to know that they're doing.

In addition, why would you ask accounting questions of an economics expert? Is it perhaps because you're casting your net across a whole bunch of experts hoping that one will be stupid enough to help you cheat? Well, someone else might be, but this expert isn't. Truth be told, the questions you ask have such simple answers that I'm amazed you'd ask them. You must be awfully, awfully lazy.

Finally, if you had even the faintest clue about economics, you'd know that if I responded to questions marked 'Private,' I'd be setting myself up to answer the same questions a bazillion times from different submitters. Since I'm not paid to do this, that would be really stupid, wouldn't it?

Americans don't cheat, Moe. It's that simple. QUIT CHEATING.

WDM

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