FIN 512 Week 1 Homework

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Problems
Chapter 1. Problem 1 pp, 33-34
1. [Financing Concepts] The following ventures are at different stages in
their life cycles. Identify the likely stage for each venture and describe
the type of financing each venture is likely to be seeking and identify
potential sources for that financing.
Chapter 2 . Problem 2 A-C & E pp. 70
[Financial Ratios and Performance] Following is financial information
for three ventures:
Venture XX Venture YY Venture Zz
After tax profit margin 5% 25% 15%
Asset turnover 2.0 times 3.0 times 1.0 times
A.Calculate the ROA for each firm.
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FIN 512 Week 2 Homework
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Problems
Chapter 3 Problems #1 (p. 113)
1. [Business Organization and Intellectual Property] Phil Young,
founder of the Pedal Pushers Company, has developed several
prototypes of a pedal replacement for childrens bicycles. The Pedal
Pusher will replace existing bicycle pedals with an easy-release stirrup
to help smaller children hold their feet on the pedals. The Pedal Pusher
will glow in the dark and will provide a musical sound as the bicycle is
pedaled.
Phil plans to purchase materials for making the product from others,
assemble the products at the ventures facilities, and hire product sales
representatives to sell the Pedal Pushers through local retail and discount
stores that sell childrens bicycles. Phil will need to purchase plastic
pedals and extensions, bolts, washers and nuts, reflective material, and a
microchip to provide the music when the bicycle is pedaled.
A.How should Phil organize his new venture? In developing your
answer, consider such factors as amount of equity capital needed,
business liability, and taxation of the venture.
B.Phil is concerned about trying to protect the intellectual property
embedded in his Pedal Pusher product idea and prototype. How might
Phil consider protecting his intellectual property?
Chapter 5. Problem 8 & 9 (pp. 181- 182)
8. [Cash Conversion Cycle] Castillo Products Company, described in
Problem 7, improved its operations from a net loss in 2009 to a net profit
in 2010. While the founders, Cindy and Rob Castillo, are happy about
these developments, they are concerned about how long the firm took to
complete its cash and conversion cycle in 2010. Use the financial
statements from Problem 7 to make your calculations. Balance sheet
items should reflect the averages of the 2009 and 2010 accounts.
A.Calculate the inventory-to-sale conversion period for 2010.

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 FIN 512 Week 3 Homework
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Homework

Complete the following assignments from your textbook and submit

them to the Dropbox in one Word document.

Chapter 6: Discussion Question: #4 p. 223

Chapter 6: Pharma BioTech Mini Case: pp. 229 - 230 Part A only

Chapter 7: Exercise/Problems: #11 and #12 pp. 262 263

Chapter 7: Castillo Mini Case: pp. 264 - 265

Chapter 6: Discussion Question 4.

Why is it usually easier to forecast sales for seasoned firms in contrast

with early-stage ventures?
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FIN 512 Week 4 Homework

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Week 4 Homework

Chapter 9: Exercises/Problems: # 2 p. 344

Chapter 9: Softec Mini Case: p. 348 A- F only

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FIN 512 Week 5 Homework

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Chapter 10 #3 pp. 382 - 383
3. [Venture Capital Valuation Method] A venture capitalist wants to
estimate the value of a new venture. The venture is not expected to
produce net income or earnings until the end of year 5 when the net
income is estimated at $1,600,000. A publicly-traded competitor or
comparable firm has current earnings of $1,000,000 and a market
capitalization value of $10,000,000.
A. Estimate the value of the new venture at the end of year 5. Show your
answer using both the direct comparison method and the direct
capitalization method. What assumption are you making when using the
current price-to-earning relationship for the comparable firm?
Chapter 11: Discussion Questions: #8, #9, #10, #12, and #15 p. 428
8. Who are the major suppliers of venture capital by type and size of
commitment?
12. Why do venture capitalists make quick decisions on the infeasibility
of some business plans?
When a business plan is not quickly determined to be infeasible, what
happens next and why?
15. Why are venture capital funds typically organized as limited
partnerships? In particular, why are they private firms instead of public
firms?
Chapter 11: Interact Systems Mini Case: p. 430
Interact Systems, Inc. has developed software tools that help hotel
chains solve application integration problems. Interacts Application
Integration Server (AIS) provides a two-way interface between central
reservations systems (CRS) and property management systems (PMS).
At least two important trends in the hotel industry are relevant. First,
hotels are shifting away from the manual booking of room reservations
and electronic bookings will continue to increase as more bookings are
made over the Internet. Second, competitive pressures are forcing hotels
to implement yield management programs and to increase customer
service. By integrating the CRS and PMS through Interacts AIS,
inventories can be better managed, yields improved, and customer
service enhanced.
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FIN 512 Week 6 Homework

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FIN 512 Week 6 Homework
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FIN 512 Week 7 Homework

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FIN 512 Week 7 Homework
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FIN 512 Week 7 Homework

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Chapter 14: Exercise/Problem #1

Chapter 14: Exercise/Problem #3