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4-5 Multiyear Future Value How much would be in your savings account
in 11 years after depositing $150 today if the bank pays 8 percent per
year? (LG4-3) 4-7 Compounding with Different Interest Rates A deposit
of $350 earns the following interest rates: a. 8 percent in the first year. b.
6 percent in the second year. c. 5.5 percent in the third year. What would
be the third year future value? 4-8 Compounding with Different Interest
Rates A deposit of $750 earns interest rates of 9 percent in the first year
and 12 percent in the second year. What would be the second year future
value? (LG4-3) 4-11 Present Value What is the present value of a $1,500
payment made in nine years when the discount rate is 8 percent? (LG4-
4) 4-13 Present Value with Different Discount Rates Compute the
present value of $1,000 paid in three years using the following discount
rates: 6 percent in the first year, 7 percent in the second year, and 8
percent in the third year. (LG4-4)
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Which financial statement reports the amounts of cash that the firm
generated and distributed during a particular time period? statement of
retained earnings Income statement Statement of cash flows Balance
sheet Which of these provide a forum in which demanders of funds raise
funds by issuing new financial instruments, such as stocks and bonds?
Money markets Investment banks Primary markets Secondary markets
The top part of Mars, Inc.s 2013 balance sheet is listed as follows (in
millions of dollars). What are Mars, Inc.s current ratio, quick ratio, and
cash ratio for 2013? 4.2, 1.0, 0.2 2.3333, 0.5556, 0.1111 10.5, 6.0, 1.0
0.1111, 0.5556, 0.2 Which of these ratios show the combined effects of
liquidity, asset management, and debt management on the overall
operation results of the firm? Financial Profitability Coverage Liquidity
As new capital budgeting projects arise, we must estimate__________.
the cost of the stock being sold for the specific project when such
projects will require cash flows the cost of the loan for the specific
project the float costs for financing the project Whats the current yield
of a 6 percent coupon corporate bond quoted at a price of 101.70? 6.1
percent 10.2 percent 6.0 percent 5.9 percent We call the process of
earning interest on both the original deposit and on the earlier interest
payments: computing. multiplying. compounding. discounting. Which
financial statement reports a firms assets, liabilities, and equity at a
particular point in time? Balance sheet Income statement Statement of
retained earnings Statement of cash flows You are trying to pick the
least-expensive machine for your company. You have two choices:
machine A, which will cost $50,000 to purchase and which will have
OCF of -$3,500 annually throughout the machines expected life of three
years; and machine B, which will cost $75,000 to purchase and which
will have OCF of -$4,900 annually throughout that machines four-year
life. Both machines will be worthless at the end of their life. If you
intend to replace whichever type of machine you choose with the same
thing when its life runs out, again and again out into the foreseeable
future, and if your business has a cost of capital of 14 percent, which one
should you choose? Machine A Machine B Neither machine A nor B
Both machines A and B When firms use multiple sources of capital, they
need to calculate the appropriate discount rate for valuing their firms
cash flows as__________. a simple average of the capital components
costs a weighted average of the capital components costs a sum of the
capital components costs they apply to each asset as they are purchased
with their respective forms of debt or equity Which of these is used as a
measure of the total amount of available cash flow from a project?
Operating cash flow Investment in operating capital Free cash flow Sunk
cash flow Which of these does NOT perform vital functions to securities
markets of all sorts by channeling funds from those with surplus funds to
those with shortages of funds? Secondary markets Mutual funds
Insurance companies Commercial banks Wills Wheels, Inc. reported a
debt-to-equity ratio of 0.65 times at the end of 2013. If the firms total
debt at year-end was $5 million, how much equity does Wills Wheels
have? $7.69 million $5 million $0.65 million $3.25 million Which of
these is the term for portfolios with the highest return possible for each
risk level? Total portfolios Modern portfolios Optimal portfolios
Efficient portfolios What are the tools available for the manager in
financial planning? Delaying disbursement of cash, reducing collection
period, cash management, and Increasing inventory turnover Reducing
collection period and delaying disbursement of cash Increasing
inventory turnover and reducing collection period Delaying
disbursement of cash and cash management Suppose that Model Nails,
Inc.s capital structure features 60 percent equity, 40 percent debt, and
that its before-tax cost of debt is 6 percent, while its cost of equity is 10
percent. If the appropriate weighted average tax rate is 28 percent, what
will be Model Nails WACC? 7.73 percent 8.40 percent 8.00 percent
16.00 percent We commonly measure the risk-return relationship using
which of the following? Coefficient of variation Standard deviation
Expected returns Correlation coefficient Financial plans include which
of the following? Schedule of Sales, Expenses, and Capital Expenditure
All of the above Short Term and Long Term Plan Pro forma Income
Statement, Balance Sheet Which of the following terms means that
during periods when interest rates change substantially, bondholders
experience distinct gains and losses in their bond investments? Interest
rate risk Credit quality risk Reinvestment rate risk Liquidity rate risk
What are reasons for the firm to go abroad? Access to raw materials
Diversification Lower production cost All of the above Which of these
statements is true regarding divisional WACC? Using a simple firmwide
WACC to evaluate new projects would give an unfair advantage to
projects that present more risk than the firms average beta. Using a
divisional WACC versus a WACC for the firms current operations will
result in quite a few incorrect decisions. Using a firmwide WACC to
evaluate new projects would have no impact on projects that present less
risk than the firms average beta. Using a simple firmwide WACC to
evaluate new projects would give an unfair advantage to projects that
present less risk than the firms average beta. The Rule of 72 is a simple
mathematical approximation for__________. the number of years
required to double an investment the payments required to double an
investment the present value required to double an investment the
number of years required to double an investment the future value
required to double an investment We can estimate a stocks value
by__________. using the book value of the total stockholder equity
section using the book value of the total assets divided by the number of
shares outstanding discounting the future dividends and future stock
price appreciation compounding the past dividends and past stock price
appreciation Which of these is the process of estimating expected future
cash flows of a project using only the relevant parts of the balance sheet
and income statements? Substitutionary analysis Incremental cash flows
Cash flow analysis Pro forma analysis Five years ago, Jane invested
$5,000 and locked in an 8 percent annual interest rate for 25 years
(ending 20 years from now). James can make a 20-year investment
today and lock in a 10 percent interest rate. How much money should he
invest now in order to have the same amount of money in 20 years as
Jane? $7,346.64 $5,089.91 $3,160.43 $3,464.11 The overall goal of the
financial manager is to__________. maximize net income maximize
earnings per share maximize shareholder wealth minimize total costs
Which of the following can create ethical dilemmas between corporate
managers and stockholders? Auditors Board of directors Agency
relationship Venture Capitalist A firm is expected to pay a dividend of
$2.00 next year and $2.14 the following year. Financial analysts believe
the stock will be at their target price of $75.00 in two years. Compute the
value of this stock with a required return of 10 percent. $79.14 $65.40
$65.57 $66.67 Which financial statement shows the total revenues that a
firm earns and the total expenses the firm incurs to generate those
revenues over a specific period of time generally one year? Statement
of cash flows Statement of retained earnings Balance sheet Income
statement Which of the following is a true statement? If interest rates
fall, all bonds will enjoy rising values. If interest rates fall, corporate
bonds will have decreasing values. If interest rates fall, no bonds will
enjoy rising values. If interest rates fall, U.S. Treasury bonds will have
decreasing values.
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This Tutorial contains 2 Papers FIN 370 Week 2 Financial Markets and
Institutions Report Create a 1,050-word report, and include the
following: Describe the role of the financial institutions and
financial markets in our economy Differentiate between primary
and secondary markets. Differentiate between money and capital
markets. Format your assignment consistent with APA guidelines.
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This tutorial contains 2 Papers FIN 370 Week 3 Risk and Return
Analysis Create a 1,050-word report, and include the following:
Explain the relationship between risk and return Identify an
example of risk and return. Explain which is more risky bonds or
common stocks. Explain how understanding risk and return will
help you in future business ventures. Format your assignment consistent
with APA guidelines. Click the Assignment Files tab to submit your
assignment.
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FIN 370 Week 3 Risk and Return Problem Sets Complete the following
problem sets from Chapter 7 in Microsoft Excel: 7-21 7-27
Complete the following problem sets from Chapter 8 in Microsoft
Excel: 8-19 8-21 Complete the following problem sets from
Chapter 9 in Microsoft Excel: 9-33 Click the Assignment Files
tab to submit your assignment. Complete the following problem sets
from Chapter 7 in Microsoft Excel: 7-21 Compute Bond Price
Compute the price of a 3.8 percent coupon bond with 15 years left to
maturity and a market interest rate of 6.8 percent. (Assume interest
payments are semiannual.) Is this a discount or premium bond? 7-27
Yield to Maturity A 5.65 percent coupon bond with 18 years left to
maturity is offered for sale at $1,035.25. What yield to maturity is the
bond offering? (Assume interest payments are semiannual.) Complete
the following problem sets from Chapter 8 in Microsoft Excel:
8-19 Value a Constant Growth Stock Financial analysts forecast
Safeco Corp.s (SAF) growth rate for the future to be 8 percent. Safecos
recent dividend was $0.88. What is the value of Safeco stock when the
required return is 12 percent? 8-21 Expected Return Ecolap Inc.
(ECL) recently paid a $0.46 dividend. The dividend is expected to grow
at a 14.5 percent rate. At a current stock price of $44.12, what is the
return shareholders are expecting? Complete the following problem sets
from Chapter 9 in Microsoft Excel: 9-33 Risk, Return, and
Their Relationship Consider the following annual returns of Estee
Lauder and Lowes Companies (Table Attached)
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This tutorial includes both calculation and 2 Papers FIN 370 Week 4
Cash Flow Analysis Analyze the case study, Frank Smith Plumbing.
Analyze the Frank Smith Plumbings Financial Statement spreadsheet.
Compare the cost of the truck to the cash flow records Compile your
calculations in a Microsoft Excel document Develop a 1,050-word
analysis and include the following: Explain why limited leverage is
good for business.Show the profitability of the project so that Stephanie
can convince her father to purchase the truck by borrowing money.
Explain how Stephanie should convince her mother that it is
inappropriate to call the bank manager and his wife for assistance in
getting the loan approval? Analyze whether the investment in the truck
is profitable. Explain whether it is more beneficial for Frank to close
his business. Explain what you would do in this same situation. Format
your assignment consistent with APA guidelines. Click the Assignment
Files tab to submit your assignments.
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FIN 370 Week 5 Precision Machines Part 2 Note: There are two parts to
this learning team assignment; Part 1 was completed in Week 3. Review
the Precision Machines document and spreadsheet. Prepare a cash
budget for Precision Machines in Microsoft Excel. Create a 1,225-
word strategic analysis and include the following: Recommend a
cash management strategy for the company that will minimize the
financing cost and increase the cash flows for the company. Explain
two economic and market forces that will impact the financial plan of
this company. Format your documents consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment. Review
the "Precision Machines" document and spreadsheet. Prepare a cash
budget for Precision Machines in Microsoft Excel. Precision
Machines
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