– Casestudy.pdf

FIND A SOLUTION AT Academic Writers Bay

_______ Professosolely asineffecti Copyrig7685, wdigitized

K R I S H N

G E O R G

Lea

Intro

In differnewlyhave receivthat, adiffershoul

Mag

Maproduthe crproduproduprodu

Thconcehigh signifand a45% Pharm

Matwo sarrangcomparrang

_______________

ors Krishna Palepus the basis for classive management.

ght © 2010, 2011 Prrite Harvard Busind, photocopied, or

N A P A L E P U

G E S E R A F E I M

asing D

oduction

late August 2ent leasing op

y recruited acon her busin

ved from her as a result of ent impact od take these d

gnet Beaut

agnet Beauty uct. The compreation of beucts being offucts, and heructs, employin

he firm differentrated naturconcentration

ficant repairinantioxidant enof total sales

maceutical an

agnet startedstores througgements. Theany operatingements coll

_______________

u and George Serafs discussion. Cases

esident and Fellowness School Publishotherwise reprodu

Decision

2010, Janette ptions she ha

ccountant, to aness. Clark ask landlord wothe forthcomn the compandifferences in

ty Product

Products Incpany was set eneficial and fered, it grewrbal supplemng 300 people

rentiated itselral ingredientn of exotic inng activity fornzymes, whics. Hair and

nd other produ

d its operationghout Massae company h

ng in Massacectively for a

________________

feim prepared thiss are not intended

ws of Harvard Collehing, Boston, MA

uced, posted, or tran

n at Ma

Clark, the owad for her storanalyze the imked Cameron

ould affect Maming accountin

ny’s financialnto account in

ts Inc.

c. was a fast g up in 2005 wsafe product

w to offer a coments. As of e and maintai

lf from the cts (Exhibit 1)

ngredients sur fine lines anch enhance th

body produucts represen

ns with one rachusetts by had leased achusetts. Thisall properties

_______________

s case. The companto serve as endors

ege. To order copi02163, or go to wwnsmitted, without t

agnet B

wner of Magnres. Two weempact that thn to analyze hagnet’s financng changes thl statements

n making her f

growing start-with the aim tts. Although

omplete skin 2010, Magnining product

competition b). Demand wch as wild rond skin colorhe immune syucts equaled nted the rest 15

etail store in mid 2010.

all its stores s gave Magns under one

_______________

ny mentioned in thsements, sources of

ies or request permww.hbsp.harvard.ethe permission of H

Beauty

net Beauty Proeks earlier, shhe new accounhow the diffecial statemen

he different lefor years to cfinal leasing d

-up selling prto utilize its e Magnet starand hair care

net offered ction facilities

by selling onwas particularl

ose oil, a natur disorders, anystem of the 21% and 19

5% of the sale

downtown BAll stores w

from the sanet the advacontract. Ap

R E V

_______________

he case is fictional.f primary data, or

mission to reproducedu/educators. ThHarvard Business S

Produc

oducts, Inc., whe had asked nting standarerent leasing nts. Cameron’easing optioncome. She wdecision.

remium hair, extensive scienrted with a le range, makeclose to 100 of 140 thousa

nly products mly strong for ural source ond aloe, rich skin. Face pr9% of total es.

Boston, and ewere occupi

ame lessor, aantage to negpart from the

9 – 1 1 1 -: S E P T E M B E R 1 4

________________

. HBS cases are deillustrations of effe

ce materials, call 1-his publication maySchool.

cts, Inc

was evaluatin David Camerd for leases wproposals sh

’s analysis shns would havewondered how

body and facntific resourclimited numbe-up, and suninnovative h

ands square f

made from h products thaof vitamin C, in vitamin Eroducts compsales respect

expanded to tied under lea large real gotiate the lee thirty-two s

– 0 3 94 , 2 0 1 1

______

eveloped ective or

-800-545-y not be

.

ng the ron, a

would he had howed e very w she

ce care ces for ber of n care herbal feet.

highly at had , with , Zinc prised tively.

thirty-easing estate

easing stores,

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

111-039 Leasing Decision at Magnet Beauty Products, Inc.

2

Magnet was distributing its products through alliances with high-end hotels located in Boston, New York and Miami, and airlines that used Magnet products for passengers that travelled first class.

For the 2009 fiscal year Magnet reported sales of $52.4 million experiencing a 12% increase from the previous year. Net income after taxes was $1.4 million, 10% higher than the previous year. Accounts receivable reached $30 million mainly because of the increasing importance of business coming from deals with luxury hotels and airlines. However, the company was considerably leveraged. Accounts payable and outstanding debt had reached $20 and $52 million respectively. The loans carried a 7% interest rate. Total net cash flow for 2009 was negative $1 million, and negative $2 million before financing cash flows.

Clark was happy with the way her business was progressing. Assuming that things continued to go well, she was hoping to nurture her start up for the next few years, and then sell the business to one of the large specialty retailers in her space. To achieve this objective Clark considered it important to maintain customer loyalty, focus on cost efficiencies, and as a result improve the profitability and the cash flow position of Magnet.

Accounting for leases

Existing U.S. lease accounting standards, under Financial Accounting Standard No. 13 (FAS 13), required lessees to classify their lease contracts as either capital or operating leases. Capital leases were leases that transferred to the lessee substantially all the risks and rewards incidental to ownership of the leased asset. All other leases were operating leases.1 FAS 13 provided four criteria to test whether a lease contract met the test of “substantial transfer of risks and rewards”:

1. The lease transfers ownership of the property to the lessee by the end of the lease term.

2. The lease contains a bargain lease option.

3. The lease term is equal to 75 percent or more of the estimated economic life of the leased property.

4. The present value of the minimum lease payments equals or exceeds 90 percent of the fair market value of the property.

Leases classified as capital leases were treated as similar to a purchase of the underlying asset with a loan. Consequently, the lessee recognized in its balance sheet the leased item as an asset and an obligation to pay rentals as a liability. Over the term of the lease, the lessee depreciated the leased item and apportioned lease payments between a finance charge and a reduction of the outstanding liability. The lessee recognized no similar assets or liabilities when the lease was classified as an operating lease. Instead, the lessee recognized the annual lease payments under an operating lease as rental expense.

Recently, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) decided to jointly revise their standards on lease accounting after considerable criticism that the existing accounting model for leases failed to provide useful information to users of financial statements. Critics noted that operating leases give rise to assets and liabilities that users of financial statements would like to see on the balance sheet, so they can have a more complete picture of the financial position of a firm. They also argued that the existence of different accounting models for substantially similar leases impairs comparability across companies.

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

Leasing Decision at Magnet Beauty Products, Inc. 111-039

3

Finally, there was wide-spread concern that FAS 13 provided opportunities to engage in “accounting arbitrage” by structuring transactions to achieve a specific lease classification.

In mid March of 2009 FASB and IASB published a discussion paper with the preliminary views of the board members on how the accounting model for leases would change.2 The boards appeared determined to eliminate operating leases and treat all leases as capital leases regardless of the particular lease terms. As a result, a lessee would recognize an asset representing its right to use the leased item for the lease term (“right-of-use asset”), and a liability for its obligation to pay rentals for the lease term. Moreover, the board members seemed to favor an approach that would require the capitalization of leases under renewal options,a contingent rental arrangements,b and residual value guarantees.c

The discussion paper specified that the right-of-use asset should be initially measured as the present value of the lease payments discounted using the lessee’s incremental borrowing rate. The proposal suggested that the asset should be amortized over the shorter of the lease term and the economic life of the leased item. The liability to pay rentals would initially be measured as the present value of the lease payments discounted using the lessee’s incremental borrowing rate. The income statement recognition of expenses associated with leases would also be affected under the proposed accounting rules. Under the current accounting model, payments for operating leases were classified as operating expenses on a straight-line basis. Under the proposed accounting model, interest expense associated with the lease payment liability, and depreciation and amortization expense associated with the leased asset would be recorded as expenses. As the liability on the balance sheet declined over the lease term, so would the interest expense. As a result, since rentals under the operating expenses generally remained the same over the life of a lease, expenses recorded under the proposed rules would be usually higher than the currently recorded rental expenses in the initial periods of a lease. The pattern would change the other way during the later part of the lease period. In late August of 2010 FASB and IASB issued an exposure draft supporting the proposals in the discussion paper.3 The exposure draft included an exception for lease contracts of 12 or fewer months. These contracts could continue be recognized as operating leases.

Choosing the new lease contract

Clark was initially considering renewing the lease contract for her stores for five years as a three-year lease with a renewal option for two more years. Such a long-term lease would ensure that Magnet would be able to lock in its current store locations for the foreseeable future. The company

a In the boards’ view, the lease term should reflect the entity’s reasonable expectation of what the term will be. The discussion paper proposed that an entity should account for options to extend or terminate a lease by assuming the longest possible lease term that is more likely than not to occur. b In some leases, the amount of each lease payment is variable rather than fixed. This variability can arise because of features, such as contingent rentals, based on price changes, the lessee’s performance derived from the underlying asset, or the usage of the underlying asset. In the boards’ view, the measurement of the right-of-use asset and right to receive lease payments should reflect all rights received, even if the payment or receipt of those rights is contingent. c The discussion paper proposed that entities should account for residual value guarantees, in which a lessee compensates a lessor if the value of the underlying asset at the end of a lease is less than a specified amount, in the same way as it accounts for contingent rentals. In the boards’ view, a residual value guarantee is equivalent to a contingent payment at the end of the lease term.

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

111-039 Leasing Decision at Magnet Beauty Products, Inc.

4

was beginning to establish a loyal customer base, and store location was an important aspect of cementing this advantage for years to come. The contract had specified that the renewal option would be automatically exercised subject to sales targets for the next three years for $60 million per year on average. Clark was confident that these sales targets would be achieved and therefore the effective term of the lease was most probably five years. The mall developer was offering Clark an attractive lease contract for the “three plus two years” lease. Under the proposed terms, the annual rental payment would be fixed at $10 million for the whole five-year period. Lessors were willing to offer better terms for long-term leases because long-term contracts reduced the risk of owing an unoccupied facility by the lessors. Moreover, under the proposed accounting standard, the three plus two lease would allow the developer to recognize as revenue the entire present value of the five year lease payments when the lease was signed.

To analyze the alternatives to the proposed “three plus two years” lease, Cameron had collected a market analysis of the commercial real estate market. Cameron also evaluated the option of one-year leases that could be potentially rolled over at the end of every year. Under this arrangement, Magnet would make no legal commitment to renew the lease beyond the first year. Of course, this meant that Magnet may have to move its stores some time during the next five years, should the current land-lord choose not to offer the space on a one-year basis. Further, if Magnet rented retail space year by year, Cameron’s market analysis showed that the forecasted rent would increase 5% every year for the next five years starting from $10 million in year 1 and reaching $12.2 million in year 5.

Based on the borrowing rate on the outstanding debt of Magnet, Cameron determined that the incremental borrowing rate of Magnet was 7%. He forecasted sales to increase by 12% every year for the five-year period, a growth rate that was moderately higher than the expected industry growth. Cost of goods sold and research and development expenses were expected to grow at 12% each year. Administrative and distribution expenses were expected to increase by 9% every year, a slower growth rate that reflected the forecasted cost efficiencies.

Clark received the analysis that Cameron had performed, showing how the proposed accounting rules would impact the income statement, the balance sheet, and the cash flow statement under the “three plus two years” lease (Exhibits 2 to 4) and the “five one year” leases (Exhibits 5 to 7). Under the five year lease, net income was expected to decrease from $1.5 million to $0.8 million for year 1 as a result of the accounting change. Moreover, leverage was expected to increase from 4.6 to 6.8. A shorter lease affected the income statement and the balance sheet less dramatically. Under a one-year lease, net income for year 1 would remain $1.5 million and leverage would equal 4.6. However, the lease payments would be higher in the future, reducing net cash flow before debt issues.

Cameron also informed Clark that the new leasing accounting model was expected to have a widespread impact on many companies.4 Exhibits 8 and 9 show the estimated potential effects of the proposed accounting rules on reported leverage and Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA) across various industries and countries.5 The highest increase in leverage and EBITDA was expected for companies in the retail and transportation industries, and in Netherlands, United Kingdom, Italy and France. Exhibit 10 shows the effect of capitalizing existing operating lease obligations reported in the footnotes of 20 of the largest U.S. retail companies, transportation companies, banks and utilities on the income statement. For most companies higher expenses would be recognized up to the 7th year of the lease and the cumulative increase in lease cost in excess of straight line rent expense varied between $98 million and $2.66 billion. As a result of the accounting change, public companies were expected to record about $1.3 trillion in leases on their balance sheets, according to estimates by the Securities and Exchange Commission. Because many

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

Leasing Decision at Magnet Beauty Products, Inc. 111-039

5

private companies also follow GAAP accounting, the number could be closer to $2 trillion, according to experts.6

As a small business owner, Clark was very concerned about managing her cash flows, to minimize the need for external financing. However, she also felt that Magnet’s reported profits could be important in determining the company’s value when she was ready to sell her business. Also, till she decided to sell the company, she wanted to make sure that she could present attractive financial statements to the banks if she needed a loan to finance Magnet’s growth.

As Clark pondered over the two leasing options for her store, she wondered how she should balance the various considerations in making her decision.

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

111-039 Leasing Decision at Magnet Beauty Products, Inc.

6

Exhibit 1 Ingredients that are used and not used in Magnet’s products

Ingredients not used Disadvantages of Ingredients not used

Ingredients used Advantages of Ingredients used

Silicones Synthetic,non bio-degraded, which clog the pores, burden hair

Combination of dry vegetable oils

Exceptional compatibility, does not clog pores, does not burden hair moisturizing properties

Parabens Conservatives to which a large percentage of the population is overexposed to

Organic acids, food conservatives

Natural, mild, safe

Oil products (mineral oil)

Synthetics, clog skin pores Excellent quality natural oils

Exceptional compatibility, does not clog pores, moisturizing properties

Propylene-glycol Dissolution responsible for allergies

Butylene glycol High compatibility, friendly to the skin

Ethanolamines Controllers of pH responsible for allergies, rashes

Amino acid L-arginin High compatibility, moisturizing properties

Synthetic vitamin E (D- and L-tocopherol)

Only D-tocopherol has proven anti-oxidant action

Natural vitamin Ε (D-tocopherol)

Has a double anti-oxidant action

Source: Casewriters.

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

111-

039

7-

Exh

ibit

2In

com

e st

atem

ent

un

der

th

e p

rop

ose

d a

cco

un

tin

g m

od

el f

or

the

‘3 p

lus

2 y

ear

leas

e’

Item

Y

ear

0 Y

ear

1 Y

ear

2 Y

ear

3 Y

ear

4 Y

ear

5

Re

ven

ue

s $

52

,36

5,7

34

$

58

,64

9,6

22

$

65

,68

7,5

77

$

73

,57

0,0

86

$

82

,39

8,4

96

$

92

,28

6,3

16

Co

st o

f sa

les

20

,12

7,3

31

2

2,5

42

,61

1

25

,24

7,7

24

2

8,2

77

,45

1

31

,67

0,7

45

3

5,4

71

,23

4

Gro

ss P

rofit

32

,23

8,4

03

3

6,1

07

,01

1

40

,43

9,8

53

4

5,2

92

,63

5

50

,72

7,7

51

5

6,8

15

,08

1

R&

D E

xpe

nse

s

7

94

,56

6

8

89

,91

4

9

96

,70

4

1

,11

6,3

08

1,2

50

,26

5

1

,40

0,2

97

Dis

trib

utio

n E

xpe

nse

s

1

2,0

87

,96

5

13

,17

5,8

82

1

4,3

61

,71

1

15

,65

4,2

65

1

7,0

63

,14

9

18

,59

8,8

33

Ad

min

istr

ative

Exp

en

ses

4

,56

6,8

43

4,9

77

,85

9

5

,42

5,8

66

5,9

14

,19

4

6

,44

6,4

72

7,0

26

,65

4

Re

nt

8

,00

0,0

00

To

tal o

pe

ratin

g e

xpe

nse

s

25

,44

9,3

74

1

9,0

43

,65

5

20

,78

4,2

81

2

2,6

84

,76

7

24

,75

9,8

86

2

7,0

25

,78

3

EB

ITD

A

6,7

89

,02

9

17

,06

3,3

57

1

9,6

55

,57

2

22

,60

7,8

68

2

5,9

67

,86

6

29

,78

9,2

98

De

pre

cia

tion

1

,00

0,0

00

1

,12

0,0

00

1

,36

0,4

00

1

,57

8,9

48

1

,82

6,4

87

2

,10

6,6

33

Inte

rest

on

De

bt

3

,64

6,9

77

3,6

46

,97

7

4

,01

6,8

28

4,3

59

,74

3

4

,66

7,5

40

4,9

29

,31

4

Inte

rest

on

Le

ase

2,8

70

,13

8

2

,37

1,0

48

1,8

37

,02

1

1

,26

5,6

13

65

4,2

06

Am

ort

iza

tio

n

8

,20

0,3

95

8,2

00

,39

5

8

,20

0,3

95

8,2

00

,39

5

8

,20

0,3

95

Ne

t In

com

e b

efo

re t

axe

s

2,1

42

,05

2

1,2

25

,84

7

3,7

06

,90

1

6,6

31

,76

1

10

,00

7,8

31

1

3,8

98

,75

1

Taxe

s

72

8,2

98

4

16

,78

8

1,2

60

,34

6

2,2

54

,79

9

3,4

02

,66

3

4,7

25

,57

5

Ne

t in

com

e

$1

,41

3,7

55

$

80

9,0

59

$

2,4

46

,55

4

$4

,37

6,9

62

$

6,6

05

,16

9

$9

,17

3,1

75

Sou

rce:

C

asew

rite

rs.

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

111-

039

8-

Exh

ibit

3B

alan

ce s

hee

t u

nd

er t

he

pro

po

sed

acc

oun

tin

g m

od

el f

or

the

‘3 p

lus

2 y

ear

leas

e’

Item

Y

ear

0 Y

ear

1 Y

ear

2 Y

ear

3 Y

ear

4 Y

ear

5

AS

SE

TS

:

Ca

sh

$2

,40

2,0

18

$

2,6

90

,26

$3

,01

3,0

91

$

3,3

74

,66

2

$3

,77

9,6

22

$

4,2

33

,17

6

Acc

ou

nts

Re

ceiv

ab

le

29

,73

2,9

11

3

3,3

00

,86

37

,29

6,9

64

4

1,7

72

,59

9

46

,78

5,3

11

5

2,3

99

,54

8

Inve

nto

ry

30

,51

2,7

33

3

4,1

74

,26

1

38

,27

5,1

72

4

2,8

68

,19

3

48

,01

2,3

76

5

3,7

73

,86

1

PP

&E

2

0,0

00

,00

22

,40

0,0

00

2

5,0

88

,00

28

,09

8,5

60

3

1,4

70

,38

7

35

,24

6,8

34

Le

ss:

Acc

um

. D

ep

reci

atio

n

(1

,00

0,0

00

)

(

2,1

20

,00

0)

(3

,48

0,4

00

)

(

5,0

59

,34

8)

(6

,88

5,8

35

)

(

8,9

92

,46

8)

Inta

ng

ible

Ass

ets

6,4

57

,88

7

,23

2,8

26

8,1

00

,76

5

9

,07

2,8

56

1

0,1

61

,59

9

11

,38

0,9

91

Rig

ht-

of-

Use

Ass

et

4

1,0

01

,97

4

41

,00

1,9

74

4

1,0

01

,97

4

41

,00

1,9

74

4

1,0

01

,97

4

Le

ss:

Acc

um

Am

ort

: R

igh

t-o

f-U

se A

sse

t

(8

,20

0,3

95

)

(1

6,4

00

,79

0)

(

24

,60

1,1

85

)

(3

2,8

01

,57

9)

(

41

,00

1,9

74

)

To

tal A

sse

ts

$8

8,1

05

,54

2

$1

30

,47

9,7

87

$

13

2,8

94

,77

7

$1

36

,52

8,3

13

$

14

1,5

23

,85

6

$1

48

,04

1,9

43

LIA

BIL

ITIE

S

Acc

ou

nts

Pa

yab

le

$2

0,0

78

,96

4

$2

2,4

88

,44

$2

5,1

87

,05

2

$2

8,2

09

,49

9

$3

1,5

94

,63

9

$3

5,3

85

,99

5

Le

ase

Ob

liga

tion

41

,00

1,9

74

4

1,0

01

,97

4

41

,00

1,9

74

4

1,0

01

,97

4

41

,00

1,9

74

Le

ss:

Acc

um

. P

rin

cip

al L

ea

se O

blig

atio

n

Pa

yme

nts

(7

,12

9,8

62

)

(1

4,7

58

,81

4)

(

22

,92

1,7

93

)

(3

1,6

56

,18

0)

(

41

,00

1,9

74

)

De

bt

52

,09

9,6

65

5

7,3

83

,26

2

62

,28

2,0

37

6

6,6

79

,14

3

70

,41

8,7

65

7

3,3

18

,11

5

To

tal L

iab

ilitie

s

7

2,1

78

,62

9

1

13

,74

3,8

14

11

3,7

12

,25

1

12

,96

8,8

24

11

1,3

59

,19

8

1

08

,70

4,1

10

EQ

UIT

Y

Sh

are

ca

pita

l

1

0,0

00

,00

10

,00

0,0

00

1

0,0

00

,00

10

,00

0,0

00

1

0,0

00

,00

10

,00

0,0

00

Re

tain

ed

ea

rnin

gs

5

,92

6,9

13

6,7

35

,97

2

9

,18

2,5

27

1

3,5

59

,48

9

20

,16

4,6

57

2

9,3

37

,83

3

Sh

are

ho

lde

rs’ E

qu

ity

15

,92

6,9

13

1

6,7

35

,97

2

19

,18

2,5

27

2

3,5

59

,48

9

30

,16

4,6

57

3

9,3

37

,83

3

To

tal L

iab

ilitie

s a

nd

Eq

uity

$8

8,1

05

,54

2

$1

30

,47

9,7

87

$

13

2,8

94

,77

7

$1

36

,52

8,3

13

$

14

1,5

23

,85

6

$1

48

,04

1,9

43

Sou

rce:

C

asew

rite

rs.

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

111-

039

9-

Exh

ibit

4C

ash

flo

w s

tate

men

t u

nd

er t

he

pro

po

sed

acc

ou

nti

ng

mo

del

fo

r th

e ‘3

plu

s 2

yea

r le

ase’

Item

Y

ear

0 Y

ear

1 Y

ear

2 Y

ear

3 Y

ear

4 Y

ear

5

CA

SH

FL

OW

S F

RO

M O

PE

RA

TIN

G A

CT

IVIT

IES

:

Ne

t In

com

e

$1

,41

3,7

55

$

80

9,0

59

$

2,4

46

,55

4

$4

,37

6,9

62

$

6,6

05

,16

9

$9

,17

3,1

75

Ad

just

me

nts

to

Re

con

cile

Ne

t In

com

e t

o

Ne

t C

ash

Pro

vid

ed

by

Op

era

tin

g A

ctiv

itie

s:

Am

ort

iza

tio

n

8

,20

0,3

95

8,2

00

,39

5

8

,20

0,3

95

8,2

00

,39

5

8

,20

0,3

95

De

pre

cia

tion

1,0

00

,00

1

,12

0,0

00

1,3

60

,40

1

,57

8,9

48

1,8

26

,48

7

2

,10

6,6

33

De

cre

ase

(In

cre

ase

) in

Acc

ou

nts

Re

ceiv

ab

le

(1

,86

3,0

00

)

(

3,5

67

,94

9)

(3

,99

6,1

03

)

(

4,4

75

,63

6)

(5

,01

2,7

12

)

(

5,6

14

,23

7)

De

cre

ase

(In

cre

ase

) in

In

ven

tory

(

1,6

00

,30

0)

(3

,66

1,5

28

)

(

4,1

00

,91

1)

(4

,59

3,0

21

)

(

5,1

44

,18

3)

(5

,76

1,4

85

)

Incr

ea

se (

De

cre

ase

) in

Acc

ou

nts

Pa

yab

le

1

,20

5,8

00

2,4

09

,47

6

2

,69

8,6

13

3,0

22

,44

6

3

,38

5,1

40

3,7

91

,35

7

Ne

t C

ash

Pro

vid

ed

by

(Use

d in

) O

pe

ratin

g A

ctiv

itie

s

15

6,2

55

5,3

09

,45

2

6

,60

8,9

48

8,1

10

,09

5

9

,86

0,2

95

1

1,8

95

,83

8

CA

SH

FL

OW

S F

RO

M I

NV

ES

TIN

G A

CT

IVIT

IES

:

Pu

rch

ase

of

tan

gib

le a

sse

ts

(1

,80

0,8

73

)

(

2,4

00

,00

0)

(2

,68

8,0

00

)

(

3,0

10

,56

0)

(3

,37

1,8

27

)

(

3,7

76

,44

6)

Pu

rch

ase

of

inta

ng

ible

ass

ets

(2

70

,00

0)

(774,9

46

)

(8

67

,93

9)

(97

2,0

92

)

(

1,0

88

,74

3)

(1

,21

9,3

92

)

Ne

t C

ash

Pro

vid

ed

by

(Use

d in

) In

vest

ing

Act

iviti

es

(2

,07

0,8

73

)

(

3,1

74

,94

6)

(3

,55

5,9

39

)

(

3,9

82

,65

2)

(4

,46

0,5

70

)

(

4,9

95

,83

8)

CA

SH

FL

OW

S F

RO

M F

INA

NC

ING

AC

TIV

ITIE

S:

Pri

nci

pa

l Pa

yme

nts

Un

de

r L

ea

se O

blig

atio

ns

(

7,1

29

,86

2)

(7

,62

8,9

52

)

(

8,1

62

,97

9)

(8

,73

4,3

87

)

(

9,3

45

,79

4)

Ne

t D

eb

t Is

sue

s (R

ep

aym

en

ts)

9

90

,03

6

5

,28

3,5

97

4,8

98

,775

4,3

97

,10

6

3

,73

9,6

22

2,8

99

,35

Ne

t C

ash

Pro

vid

ed

by

(Use

d in

) F

ina

nci

ng

Act

iviti

es

9

90

,03

6

(1,8

46

,26

5)

(2

,73

0,1

77

)

(

3,7

65

,87

2)

(4

,99

4,7

66

)

(

6,4

46

,44

5)

Ne

t In

cre

ase

in C

ash

($

92

4,5

82

)$

28

8,2

42

$

32

2,8

31

$

36

1,5

71

$

40

4,9

59

$

45

3,5

55

Ca

sh,

Jan

ua

ry 1

$

3,3

26

,60

$2

,40

2,0

18

$

2,6

90

,26

$3

,01

3,0

91

$

3,3

74

,66

2

$3

,77

9,6

22

Ca

sh,

De

cem

be

r 3

1

2

,40

2,0

18

2,6

90

,26

3

,01

3,0

91

3

,37

4,6

62

3,7

79

,62

2

4

,23

3,1

76

Sou

rce:

C

asew

rite

rs.

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

111-

039

10-

Exh

ibit

5In

com

e st

atem

ent

un

der

th

e p

rop

ose

d a

cco

un

tin

g m

od

el f

or

fiv

e 1-

yea

r le

ases

Item

Y

ear

0 Y

ear

1 Y

ear

2 Y

ear

3 Y

ear

4 Y

ear

5

Re

ven

ue

s $

52

,36

5,7

34

$

58

,64

9,6

22

$

65

,68

7,5

77

$

73

,57

0,0

86

$

82

,39

8,4

96

$

92

,28

6,3

16

Co

st o

f sa

les

2

0,1

27

,33

1

22

,54

2,6

11

2

5,2

47

,72

4

28

,27

7,4

51

3

1,6

70

,74

5

35

,47

1,2

34

Gro

ss P

rofit

3

2,2

38

,40

3

3

6,1

07

,01

1

4

0,4

39

,85

3

45

,29

2,6

35

5

0,7

27

,75

1

5

6,8

15

,08

1

R&

D E

xpe

nse

s

7

94

,56

6

88

9,9

14

9

96

,70

4

1,1

16

,30

8

1,2

50

,26

5

1,4

00

,29

7

Dis

trib

utio

n E

xpe

nse

s

12

,08

7,9

65

1

3,1

75

,88

2

14

,36

1,7

11

1

5,6

54

,26

5

1

7,0

63

,14

9

18

,59

8,8

33

Ad

min

istr

ative

Exp

en

ses

4

,56

6,8

43

4,9

77

,85

9

5

,42

5,8

66

5

,91

4,1

94

6

,44

6,4

72

7,0

26

,65

4

Re

nt

8,0

00

,00

10

,00

0,0

00

1

0,5

00

,00

1

1,0

25

,00

1

1,5

76

,25

12

,15

5,0

63

To

tal o

pe

ratin

g e

xpe

nse

s

2

5,4

49

,37

4

29

,04

3,6

55

3

1,2

84

,28

1

33

,70

9,7

67

3

6,3

36

,13

6

39

,18

0,8

46

EB

ITD

A

6,7

89

,02

9

7,0

63

,35

7

9

,15

5,5

72

1

1,5

82

,86

8

14

,39

1,6

16

1

7,6

34

,23

6

De

pre

cia

tion

1

,00

0,0

00

1,1

20

,00

1,3

60

,40

1,5

78

,94

8

1

,82

6,4

87

2,1

06

,63

3

Inte

rest

on

De

bt

3,6

46

,97

7

3,6

46

,97

7

4,0

42

,30

7

4,4

23

,09

9

4

,78

2,0

69

5

,10

9,2

47

Inte

rest

on

Le

ase

Am

ort

iza

tio

n

Ne

t In

com

e b

efo

re t

axe

s

2

,14

2,0

52

2

,29

6,3

80

3,7

52

,86

5

5,5

80

,82

1

7

,78

3,0

60

1

0,4

18

,35

5

Taxe

s

72

8,2

98

7

80

,76

9

1,2

75

,97

4

1,8

97

,47

9

2,6

46

,24

3,5

42

,24

1

Ne

t in

com

e

$1

,41

3,7

55

$

1,5

15

,61

1

$2

,47

6,8

91

$

3,6

83

,34

2

$5

,13

6,8

20

$

6,8

76

,11

4

Sou

rce:

C

asew

rite

rs.

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

111-

039

11-

Exh

ibit

6B

alan

ce s

hee

t u

nd

er t

he

pro

po

sed

acc

oun

tin

g m

od

el f

or

fiv

e 1-

yea

r le

ases

It

em

Yea

r 0

Yea

r 1

Yea

r 2

Yea

r 3

Yea

r 4

Yea

r 5

A

SS

ET

S:

Ca

sh

$2

,40

2,0

18

$

2,6

90

,26

$3

,01

3,0

91

$

3,3

74

,66

2

$3

,77

9,6

22

$4,2

33,1

76

Acc

ou

nts

Re

ceiv

ab

le

2

9,7

32

,91

1

33

,30

0,8

60

3

7,2

96

,96

4

41

,77

2,5

99

4

6,7

85

,31

1

5

2,3

99

,548

Inve

nto

ry

3

0,5

12

,73

3

3

4,1

74

,26

1

3

8,2

75

,17

2

4

2,8

68

,19

3

4

8,0

12

,37

6

53,7

73,8

61

PP

&E

20

,00

0,0

00

22

,40

0,0

00

25

,08

8,0

00

28

,09

8,5

60

31

,47

0,3

87

35,2

46,8

34

Le

ss:

Acc

um

. D

ep

reci

atio

n

(

1,0

00

,00

0)

(2

,12

0,0

00

)

(3,4

80

,40

0)

(5,0

59

,34

8)

(6

,88

5,8

35

)

(8,9

92,4

68

) In

tan

gib

le A

sse

ts

6,4

57

,88

7,2

32

,82

6

8,1

00

,76

5

9,0

72

,85

6

1

0,1

61

,59

9

11,3

80,9

91

Rig

ht-

of-

Use

Ass

et

Le

ss:

Acc

um

Am

ort

: R

igh

t-o

f-U

se A

sse

t

To

tal A

sse

ts

$8

8,1

05

,54

2

$9

7,6

78

,20

7

$1

08

,29

3,5

92

$

12

0,1

27

,52

3

$1

33

,32

3,4

61

$14

8,0

41,9

43

L

IAB

ILIT

IES

A

cco

un

ts P

aya

ble

$

20

,07

8,9

64

$

22

,48

8,4

40

$

25

,18

7,0

52

$

28

,20

9,4

99

$

31

,59

4,6

39

$35,3

85,9

95

Le

ase

Ob

liga

tion

Le

ss:

Acc

um

. P

rin

cip

al L

ea

se O

blig

atio

n

Pa

yme

nts

De

bt

52

,09

9,6

65

57

,74

7,2

43

63

,18

7,1

25

6

8,3

15

,26

87

2,9

89

,24

677,0

40,2

57

To

tal L

iab

ilitie

s

72

,17

8,6

29

80

,23

5,6

83

88

,37

4,1

77

96

,52

4,7

66

1

04

,58

3,8

85

1

12,4

26,2

52

E

QU

ITY

S

ha

re c

ap

ita

l

10

,00

0,0

00

10

,00

0,0

00

10

,00

0,0

00

10

,00

0,0

00

10

,00

0,0

00

10,0

00,0

00

Re

tain

ed

ea

rnin

gs

5,9

26

,91

3

7,4

42

,52

4

9,9

19

,41

5

1

3,6

02

,75

6

1

8,7

39

,57

6

25,6

15,6

90

S

ha

reh

old

ers

‘ Eq

uity

15

,92

6,9

13

17

,44

2,5

24

19

,91

9,4

15

23

,60

2,7

56

28

,73

9,5

76

35,6

15,6

90

T

ota

l L

iab

ilitie

s a

nd

Eq

uity

$8

8,1

05

,54

2

$9

7,6

78

,20

7

$1

08

,29

3,5

92

$

12

0,1

27

,52

3

$1

33

,32

3,4

61

$14

8,0

41,9

43

So

urc

e:

Cas

ewri

ters

.

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

111-

039

12-

Exh

ibit

7C

ash

flo

w s

tate

men

t u

nd

er t

he

pro

po

sed

acc

ou

nti

ng

mo

del

fo

r fi

ve

1-y

ear

leas

es

Item

Y

ear

0 Y

ear

1 Y

ear

2 Y

ear

3 Y

ear

4 Y

ear

5

CA

SH

FL

OW

S F

RO

M O

PE

RA

TIN

G A

CT

IVIT

IES

:

Ne

t In

com

e

$1

,41

3,7

55

$

1,5

15

,61

1

$2

,47

6,8

91

$

3,6

83

,34

2

$5

,13

6,8

20

$

6,8

76

,11

4

Ad

just

me

nts

to

Re

con

cile

Ne

t In

com

e t

o

Ne

t C

ash

Pro

vid

ed

by

Op

era

tin

g A

ctiv

itie

s:

Am

ort

iza

tio

n

De

pre

cia

tion

1,0

00

,00

1,1

20

,00

1,3

60

,40

1

,57

8,9

48

1,8

26

,48

7

2

,10

6,6

33

De

cre

ase

(In

cre

ase

) in

Acc

ou

nts

Re

ceiv

ab

le

(1,8

63

,00

0)

(

3,5

67

,94

9)

(3,9

96

,10

3)

(4,4

75

,63

6)

(

5,0

12

,71

2)

(

5,6

14

,23

7)

De

cre

ase

(In

cre

ase

) in

In

ven

tory

(1,6

00

,30

0)

(

3,6

61

,52

8)

(

4,1

00

,91

1)

(4,5

93

,02

1)

(5,1

44

,18

3)

(5,7

61

,48

5)

Incr

ea

se (

De

cre

ase

) in

Acc

ou

nts

Pa

yab

le

1,2

05

,80

2

,40

9,4

76

2,6

98

,61

3

3

,02

2,4

46

3

,38

5,1

40

3

,79

1,3

57

Ne

t C

ash

Pro

vid

ed

by

(Use

d in

) O

pe

ratin

g A

ctiv

itie

s $

15

6,2

55

($

2,1

84,3

91)

($1,5

61,1

11)

($783,9

20

)$

19

1,5

51

$

1,3

98

,38

2

CA

SH

FL

OW

S F

RO

M I

NV

ES

TIN

G A

CT

IVIT

IES

:

Pu

rch

ase

of

tan

gib

le a

sse

ts

($1,8

00,8

73)

($2,4

00,0

00)

($2,6

88,0

00)

($3,0

10,5

60)

($3,3

71,8

27)

($3,7

76,4

46)

Pu

rch

ase

of

inta

ng

ible

ass

ets

(2

70

,00

0)

(7

74

,94

6)

(8

67

,93

9)

(

97

2,0

92

)

(

1,0

88

,74

3)

(1,2

19

,39

2)

Ne

t C

ash

Pro

vid

ed

by

(Use

d in

) In

vest

ing

Act

iviti

es

($2,0

70,8

73)

($3,1

74,9

46)

($3,5

55,9

39)

($3,9

82,6

52)

($4,4

60,5

70)

($4,9

95,8

38)

CA

SH

FL

OW

S F

RO

M F

INA

NC

ING

AC

TIV

ITIE

S:

Pri

nci

pa

l Pa

yme

nts

Un

de

r L

ea

se O

blig

atio

ns

Ne

t D

eb

t Is

sue

s (R

ep

aym

en

ts)

99

0,0

36

5,6

47

,57

8

5

,43

9,8

81

5,1

28

,14

3

4

,67

3,9

78

4,0

51

,01

1

Ne

t C

ash

Pro

vid

ed

by

(Use

d in

) F

ina

nci

ng

Act

iviti

es

$9

90

,03

6

$5

,64

7,5

78

$

5,4

39

,88

1

$5

,12

8,1

43

$

4,6

73

,97

8

$4

,05

1,0

11

Ne

t In

cre

ase

in C

ash

($

924,5

82

)$

28

8,2

42

$

32

2,8

31

$

36

1,5

71

$

40

4,9

59

$

45

3,5

55

Ca

sh,

Jan

ua

ry 1

$

3,3

26

,60

$2

,40

2,0

18

$

2,6

90

,26

$3

,01

3,0

91

$

3,3

74

,66

2

$3

,77

9,6

22

Ca

sh,

De

cem

be

r 3

1

2,4

02

,01

8

2

,69

0,2

60

3,0

13

,09

1

3

,37

4,6

62

3

,77

9,6

22

4,2

33

,17

6

Sou

rce:

C

asew

rite

rs.

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

Leasing Decision at Magnet Beauty Products, Inc. 111-039

13

Exhibit 8 Impact of new lease accounting standard on leverage and EBITDA across industries

Increase in leverage (%) Increase in EBITDA (%)

Industry Mean Median Mean Median

Retail and Trade 64 42 55 34

Transportation and Warehousing 31 9 44 14

Telecom 20 8 16 7

Professional Services 19 12 27 20

Amusement 19 4 13 5

Accommodation 18 6 30 10

Wholesale Trade 17 8 21 11

All companies 13 4 18 7

Manufacturing 9 5 13 7

Construction 8 4 14 6

Oil, Gas and Mining 7 1 10 2

Financial services 6 2 15 5

Utilities 2 0 6 3

Source: “Proposed lease accounting: research of impact on companies”, PricewaterhouseCoopers, available at: http://www.pwc.com/be/en/publications/pdf/Proposed-lease-accounting-PwC-10.pdf, accessed August 15, 2010.

Leverage is interest bearing debt over shareholder’s equity. EBITDA is earnings before interest, taxes and depreciation.

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

111-039 Leasing Decision at Magnet Beauty Products, Inc.

14

Exhibit 9 Impact of new lease accounting standard on leverage and EBITDA across countries

Increase in leverage (%) Increase in EBITDA (%) Country Mean Median Mean Median

Netherlands 27 12 27 12 United Kingdom 20 9 24 11 Italy 20 4 30 11 France 20 10 31 22 Sweden 17 7 21 12 Germany 16 5 18 10 United States 15 5 15 7 All companies 13 4 18 7 Switzerland 12 4 28 10 Singapore 8 3 20 7 Hong Kong 7 1 18 4 China 5 1 13 2 Japan 2 1 30 14

Source: “Proposed lease accounting: research of impact on companies”, PricewaterhouseCoopers, available at: http://www.pwc.com/be/en/publications/pdf/Proposed-lease-accounting-PwC-10.pdf, accessed August 15, 2010.

Leverage is interest bearing debt over shareholder’s equity. EBITDA is earnings before interest, taxes and depreciation.

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

Leasing Decision at Magnet Beauty Products, Inc. 111-039

15

Exhibit 10 Impact of new accounting standard on timing of lease expense for 20 large US firms

Company

Cumulative increase in lease cost in excess of straight line to

turn around point Year of turn

around

1st year increase in lease cost vs straight

line

% in excess of straight line cash expense in the

1st year

Walgreen’s 2,664 10 456 23

CVS 1,500 9 330 19

Wal-Mart 838 8 194 17

Home Depot 581 9 125 16

Target 487 15 50 21

Sears 374 6 118 14

Kroger 323 6 112 14

Best Buy 275 6 127 12

Delta A/L 298 7 110 10

United A/L 303 7 149 11

Cont A/L 777 7 223 16

American A/L 498 7 146 15

US Air 624 7 285 11

FEDEX 632 7 211 12

BNSF 437 7 117 19

Bank America 913 6 305 13

JP Morgan 891 7 269 16

Citigroup 319 4 157 11

Exelon 98 9 21 16

AEP 178 7 55 18

Source: “An analysis of the impact on lessees of the new approach to lease accounting”, William Bosco, available at: http://fasri.net/wp-content/uploads/2010/03/elfa-cfo-mag-article-2.pdf, accessed August 15, 2010.

Results are in millions of $.

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

111-039 Leasing Decision at Magnet Beauty Products, Inc.

16

Endnotes

1“Accounting for lease”, Financial Accounting Standards Board’s Statement No. 13, 1976.

2“Discussion paper: leases, preliminary views”, Financial Accounting Standards Board’s Statement No. 1680-100, 2009.

3“Proposed accounting standards update: Leases”, Financial Accounting Standards Board’s update No. 1850-100, 2010.

4“New accounting rules ruffle the leasing market”, Julie Satow, The New York Times, June 22 2010, available at: http://www.nytimes.com/2010/06/23/realestate/commercial/23fasb.html

5Source: “Proposed lease accounting: research of impact on companies”, Price Waterhouse Coopers, available at: http://www.pwc.com/be/en/publications/pdf/Proposed-lease-accounting-PwC-10.pdf., and “An analysis of the impact on lessees of the new approach to lease accounting”, William Bosco, available at: http://fasri.net/wp-content/uploads/2010/03/elfa-cfo-mag-article-2.pdf.

6“New accounting rules ruffle the leasing market”, Julie Satow, The New York Times, June 22 2010, available at: http://www.nytimes.com/2010/06/23/realestate/commercial/23fasb.html

For the exclusive use of A. Almutham, 2022.

This document is authorized for use only by Ahmed Almutham in FINC6602_Spring_2022-1 taught by FANG CHEN, University of New Haven from Feb 2022 to May 2022.

<< /ASCII85EncodePages false /AllowTransparency false /AutoPositionEPSFiles true /AutoRotatePages /None /Binding /Left /CalGrayProfile (Gray Gamma 2.2) /CalRGBProfile (sRGB IEC61966-2.1) /CalCMYKProfile (U.S. Web Coated 50SWOP51 v2) /sRGBProfile (sRGB IEC61966-2.1) /CannotEmbedFontPolicy /Error /CompatibilityLevel 1.3 /CompressObjects /Off /CompressPages true /ConvertImagesToIndexed true /PassThroughJPEGImages true /CreateJobTicket false /DefaultRenderingIntent /Default /DetectBlends true /DetectCurves 0.0000 /ColorConversionStrategy /LeaveColorUnchanged /DoThumbnails true /EmbedAllFonts true /EmbedOpenType false /ParseICCProfilesInComments true /EmbedJobOptions true /DSCReportingLevel 0 /EmitDSCWarnings false /EndPage -1 /ImageMemory 1048576 /LockDistillerParams true /MaxSubsetPct 100 /Optimize true /OPM 1 /ParseDSCComments true /ParseDSCCommentsForDocInfo true /PreserveCopyPage true /PreserveDICMYKValues true /PreserveEPSInfo true /PreserveFlatness true /PreserveHalftoneInfo false /PreserveOPIComments false /PreserveOverprintSettings true /StartPage 1 /SubsetFonts false /TransferFunctionInfo /Preserve /UCRandBGInfo /Remove /UsePrologue false /ColorSettingsFile () /AlwaysEmbed [ true ] /NeverEmbed [ true ] /AntiAliasColorImages false /CropColorImages true /ColorImageMinResolution 150 /ColorImageMinResolutionPolicy /OK /DownsampleColorImages false /ColorImageDownsampleType /Average /ColorImageResolution 150 /ColorImageDepth -1 /ColorImageMinDownsampleDepth 1 /ColorImageDownsampleThreshold 1.50000 /EncodeColorImages false /ColorImageFilter /DCTEncode /AutoFilterColorImages false /ColorImageAutoFilterStrategy /JPEG /ColorACSImageDict << /QFactor 0.76 /HSamples [2 1 1 2] /VSamples [2 1 1 2] >> /ColorImageDict << /QFactor 0.76 /HSamples [2 1 1 2] /VSamples [2 1 1 2] >> /JPEG2000ColorACSImageDict << /TileWidth 256 /TileHeight 256 /Quality 15 >> /JPEG2000ColorImageDict << /TileWidth 256 /TileHeight 256 /Quality 15 >> /AntiAliasGrayImages false /CropGrayImages true /GrayImageMinResolution 150 /GrayImageMinResolutionPolicy /OK /DownsampleGrayImages false /GrayImageDownsampleType /Bicubic /GrayImageResolution 150 /GrayImageDepth -1 /GrayImageMinDownsampleDepth 2 /GrayImageDownsampleThreshold 1.50000 /EncodeGrayImages false /GrayImageFilter /DCTEncode /AutoFilterGrayImages true /GrayImageAutoFilterStrategy /JPEG /GrayACSImageDict << /QFactor 0.76 /HSamples [2 1 1 2] /VSamples [2 1 1 2] >> /GrayImageDict << /QFactor 0.76 /HSamples [2 1 1 2] /VSamples [2 1 1 2] >> /JPEG2000GrayACSImageDict << /TileWidth 256 /TileHeight 256 /Quality 15 >> /JPEG2000GrayImageDict << /TileWidth 256 /TileHeight 256 /Quality 15 >> /AntiAliasMonoImages false /CropMonoImages true /MonoImageMinResolution 1200 /MonoImageMinResolutionPolicy /OK /DownsampleMonoImages false /MonoImageDownsampleType /Bicubic /MonoImageResolution 1200 /MonoImageDepth -1 /MonoImageDownsampleThreshold 1.50000 /EncodeMonoImages false /MonoImageFilter /CCITTFaxEncode /MonoImageDict << /K -1 >> /AllowPSXObjects false /CheckCompliance [ /None ] /PDFX1aCheck false /PDFX3Check false /PDFXCompliantPDFOnly false /PDFXNoTrimBoxError true /PDFXTrimBoxToMediaBoxOffset [ 0.00000 0.00000 0.00000 0.00000 ] /PDFXSetBleedBoxToMediaBox true /PDFXBleedBoxToTrimBoxOffset [ 0.00000 0.00000 0.00000 0.00000 ] /PDFXOutputIntentProfile (None) /PDFXOutputConditionIdentifier () /PDFXOutputCondition () /PDFXRegistryName () /PDFXTrapped /False /CreateJDFFile false /Description << /ARA /BGR /CHS /CHT /CZE /DAN /DEU /ESP /ETI /FRA /GRE /HEB /HRV /HUN /ITA (Utilizzare queste impostazioni per creare documenti Adobe PDF adatti per visualizzare e stampare documenti aziendali in modo affidabile. I documenti PDF creati possono essere aperti con Acrobat e Adobe Reader 6.0 e versioni successive.) /JPN /KOR /LTH /LVI /NLD (Gebruik deze instellingen om Adobe PDF-documenten te maken waarmee zakelijke documenten betrouwbaar kunnen worden weergegeven en afgedrukt. De gemaakte PDF-documenten kunnen worden geopend met Acrobat en Adobe Reader 6.0 en hoger.) /NOR /POL /PTB /RUM /RUS /SKY /SLV /SUO /SVE /TUR /UKR /ENU (Use these settings to create Adobe PDF documents suitable for reliable viewing and printing of business documents. Created PDF documents can be opened with Acrobat and Adobe Reader 6.0 and later.) >>>> setdistillerparams<< /HWResolution [300 300] /PageSize [612.000 792.000]>> setpagedevice

Order from Academic Writers Bay
Best Custom Essay Writing Services

QUALITY: 100% ORIGINAL PAPER NO PLAGIARISM – CUSTOM PAPER

Why Choose Us?

  • 100% non-plagiarized Papers
  • 24/7 /365 Service Available
  • Affordable Prices
  • Any Paper, Urgency, and Subject
  • Will complete your papers in 6 hours
  • On-time Delivery
  • Money-back and Privacy guarantees
  • Unlimited Amendments upon request
  • Satisfaction guarantee
SATISFACTION

How It Works

  • Click on the “Place Your Order” tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
  • Fill in your paper’s requirements in the “PAPER DETAILS” section.
  • Fill in your paper’s academic level, deadline, and the required number of pages from the drop-down menus.
  • Click “CREATE ACCOUNT & SIGN IN” to enter your registration details and get an account with us for record-keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
  • From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.

About AcademicWritersBay.com

AcademicWritersBay.com is an easy-to-use and reliable service that is ready to assist you with your papers 24/7/ 365days a year. 99% of our customers are happy with their papers. Our team is efficient and will always tackle your essay needs comprehensively assuring you of excellent results. Feel free to ask them anything concerning your essay demands or Order.

AcademicWritersBay.com is a private company that offers academic support and assistance to students at all levels. Our mission is to provide proficient and high quality academic services to our highly esteemed clients. AcademicWritersBay.com is equipped with competent and proficient writers to tackle all types of your academic needs, and provide you with excellent results. Most of our writers are holders of master’s degrees or PhDs, which is an surety of excellent results to our clients. We provide assistance to students all over the world.
We provide high quality term papers, research papers, essays, proposals, theses and many others. At AcademicWritersBay.com, you can be sure of excellent grades in your assignments and final exams.

NO PLAGIARISM

error: Content is protected !!