FIN 419 Entire Course (No Final Guide)
FOR MORE CLASSES VISIT www.fin419assist.com FIN 419 Week 1 Business Structure and Financial Statements FIN 419 Week 2 Time Value of Money Calculations FIN 419 Week 3 Cash Conversion Cycle Analysis (CVS Health) FIN 419 Week 3 Cash Conversion Cycle Analysis (Samsung) FIN 419 Week 3 Cash Flow Estimation FIN 419 Week 4 Capital Budgeting Decision Models FIN 419 Week 4 Stock Valuation FIN 419 Signature Assignment Financial Statement Analysis and Firm Performance (Starbucks in Australia) FIN 419 Signature Assignment Financial Statement Analysis and Firm Performance (Healthy Eating Restaurant) FIN 419 Week 1 Individual Assignment Limited Liability Corporation and Partnership Paper (2 Papers) FIN 419 Week 1 DQ 1 FIN 419 Week 1 DQ 2 FIN 419 Week 1 DQ 3
FIN 419 Week 1 DQ 4 FIN 419 Week 1 Individual Finance lab FIN 419 Week 2 Individual Assignment Financial Outcomes Paper FIN 419 Week 2 DQ 1 FIN 419 Week 2 DQ 2 FIN 419 Week 2 DQ 3 FIN 419 Week 2 DQ 4 FIN 419 Week 2 Individual Finance lab Problems FIN 419 Week 3 Learning Team Assignment Capital Valuation Paper FIN 419 Week 3 Team Assignment Working Capital Strategies Paper and Presentation FIN 419 Week 3 Individual Finance lab Problems FIN 419 Week 3 DQ 1 FIN 419 Week 3 DQ 2 FIN 419 Week 4 Team Assignment Working Capital Strategies Paper FIN 419 Week 4 Team Assignment Capital Structure Paper FIN 419 Week 4 Individual Finance lab Problems FIN 419 Week 4 Team Assignment Problem Set (New) FIN 419 Week 4 DQ 1 FIN 419 Week 4 DQ 2 FIN 419 Week 4 DQ 3
FIN 419 Week 4 DQ 4 FIN 419 Week 5 Learning Team Assignment International Finance Paper (2 Papers) FIN 419 Week 5 DQ 1 FIN 419 Week 5 DQ 2 FIN 419 Week 5 DQ 3 FIN 419 Week 5 DQ 4
==============================================
FIN 419 Entire Course + Final Guide (New, 2017)
FOR MORE CLASSES VISIT www.fin419assist.com FIN 419 Week 1 Business Structure and Financial Statements FIN 419 Week 2 Time Value of Money Calculations FIN 419 Week 3 Cash Conversion Cycle Analysis (CVS Health) FIN 419 Week 3 Cash Conversion Cycle Analysis (Samsung) FIN 419 Week 3 Cash Flow Estimation FIN 419 Week 4 Capital Budgeting Decision Models FIN 419 Week 4 Stock Valuation FIN 419 Signature Assignment Financial Statement Analysis and Firm Performance (Starbucks in Australia) FIN 419 Signature Assignment Financial Statement Analysis and Firm
Performance (Healthy Eating Restaurant) FIN 419 Final Exam (New 2017) (Score 29/30) FIN 419 Week 1 Individual Assignment Limited Liability Corporation and Partnership Paper (2 Papers) FIN 419 Week 1 DQ 1 FIN 419 Week 1 DQ 2 FIN 419 Week 1 DQ 3 FIN 419 Week 1 DQ 4 FIN 419 Week 1 Individual Finance lab FIN 419 Week 2 Individual Assignment Financial Outcomes Paper FIN 419 Week 2 DQ 1 FIN 419 Week 2 DQ 2 FIN 419 Week 2 DQ 3 FIN 419 Week 2 DQ 4 FIN 419 Week 2 Individual Finance lab Problems FIN 419 Week 3 Learning Team Assignment Capital Valuation Paper FIN 419 Week 3 Team Assignment Working Capital Strategies Paper and Presentation FIN 419 Week 3 Individual Finance lab Problems FIN 419 Week 3 DQ 1 FIN 419 Week 3 DQ 2 FIN 419 Week 4 Team Assignment Working Capital Strategies Paper FIN 419 Week 4 Team Assignment Capital Structure Paper FIN 419 Week 4 Individual Finance lab Problems FIN 419 Week 4 Team Assignment Problem Set (New) FIN 419 Week 4 DQ 1 FIN 419 Week 4 DQ 2 FIN 419 Week 4 DQ 3 FIN 419 Week 4 DQ 4 FIN 419 Week 5 Learning Team Assignment International Finance Paper (2 Papers) FIN 419 Week 5 DQ 1 FIN 419 Week 5 DQ 2 FIN 419 Week 5 DQ 3 FIN 419 Week 5 DQ 4 ==============================================
FIN 419 Final Exam (New 2017) (Score 29/30)
FOR MORE CLASSES VISIT www.fin419assist.com
FIN 419 FINAL EXAM NEW JUNE 2017
You want to invest in a stock that pays $6.00 annual cash dividends for the next five years. At the end of the five years you will sell the stock for $30.00. If you want to earn 10% on this investment what is a fair price for this stock if you buy it today? • $22.75 • $40.37 • $18.63 • $41.37 ________ provides financial advice helps design bond terms makes sure that new bonds meet listing requirements and then markets new bond issues. • An investment banker • The Federal Reserve • A stock broker • The Securities and Exchange Commission An investment of $100 today is worth $116.64 at the end of two years if it earns an annual interest rate of 8%. How much interest is earned in the first year and how much in the second year of this investment? • The interest earned in year one is $8.64 and the interest earned in year two is $8.00. • There is not enough information to solve this problem.
• The interest earned in year one is $8.00 and the interest earned in year two is $8.64. • The interest earned in year one is $8.32 and the interest earned in year two is $8.32. The ________ is/are critical to business decisions business growth and ultimately business success. • currency denomination of profits • timing and amount of cash flow • risk and timing but not the amount of cash flow • risk and profits but not the amount of cash flow ________ is a financial term for “free money” that is the opportunity to make a profit without risk. • Free rider • Trading in perfect markets • Arbitrage • Trading in imperfect markets An aspect of short-term financial planning is forecasting operating cash flow and ultimately the profitability of the company in the coming period. This type of financial planning typically uses forecasted ________. • income statements • All of these • earnings
• working capital statements Which of the following will result in a future value greater than $100? • PV = $50, r = an annual interest rate of 10%, and n = 8 years. • PV = $90, r = an annual interest rate of 14%, and n = 1 year. • All of the future values are greater than $100. • PV = $75, r = an annual interest rate of 12%, and n = 3 years. Which of the statements below is FALSE? • An equity claim is a claim to all the assets and cash flows of a company once debt claimants have been paid. • Bond ownership gives the right to participate in the management of the company. • For common stock, there is no maturity date and the promised cash flow is not stated on the asset, but is determined at a later date by the board of directors. • Like a bond, common stock entitles the owner to some of the cash flow of a company. Dweller, Inc. is considering a four-year project that has an initial aftertax outlay or after-tax cost of $80,000. The future cash inflows from its project are $40,000, $40,000, $30,000 and $30,000 for years 1, 2, 3 and 4, respectively. Dweller uses the net present value method and has a discount rate of 12%. Will Dweller accept the project? • Dweller rejects the project because the NPV is less than -$4,000. • Dweller accepts the project because the NPV is greater than $30,000. • Dweller rejects the project because the NPV is -$3,021.
• Dweller accepts the project because it has a positive NPV of over $28,000. From the financial statements, we can look at specific performance areas of a company by selecting key pieces of information and analyzing this information ________. • All of these • at a point in time • at a point in time or over a specific time horizon • over a specific time horizon
Which of the statements below is FALSE? • When cross rates are out of line, there can be an arbitrage opportunity. • The opportunity to make a profit without risk by exchanging three currencies is known as triple arbitrage. • Exchange rates vary from one day to the next. • Even if you could not do a direct exchange between pounds and yen, you could convert pounds to dollars and then dollars to yen and ultimately end up changing pounds into yen. When there are conflicts among managerial goals in U.S. markets, the most important priority is to ________. • increase the current market value of equity • keep all of the company’s customers happy • foster good relationships with the community
• maintain a safe and happy work place A ________ has limited liability, is a legal entity, and has the greatest potential to raise capital. • corporation • limited partnership • sole proprietorship • general partnership
Extending credit to a customer has three major components: • a policy on how customers will qualify for credit, a policy on the payment plan allowed creditors, and a policy on accounting for depreciation. • a policy on how customers will qualify for credit, a policy on paying commissions on sales, and a policy for collecting overdue bills. • a policy on how customers will qualify for credit, a policy on the payment plan allowed creditors, and a policy for collecting overdue bills. • a policy on how customers will qualify for credit, a policy on accounting for depreciation, and a policy on paying commissions on sales. Which of the following is NOT true regarding the total payment in an equal payment amortization table? • The total payment for any period is equal to the principal plus interest payments for that same period.
• The final total payment will be greater than the beginning principal for the final period, assuming a positive interest rate. • The total payment is calculated using the present value of an annuity formula rearranged to solve for the payment. • All of the above are true. Which of the statements below is TRUE? • The increase in working capital accounts necessary to support a project also provides for cost increases at the end of the project. • An increase in working capital can be brought about by an increase in inventory. • Decreases in accounts receivables constitute a use of cash flow because you are helping your customers finance their purchases. • Decreases in accounts payable constitute a source of cash flow because you are using your suppliers to help finance your business operations. Which of the following is NOT a generally accepted way to remove ineffective management of a publicly traded firm? • Outside management teams can “take over” the company. • Each of the above are recognized methods for the removal of ineffective management. • The Board of Directors can vote to remove management. • The shareholders can vote out directors who won’t discipline managers. A major issue with venture capitalists and angel investors is the rate at which their funds will be used up. This is called the ________.
• depreciation rate • IV rate • burn rate or bleed rate • consumption or constriction rate
Which of the statements below is TRUE? • Investors want to minimize return and minimize risk. • Investors want to maximize return and maximize risk. • Investors want to minimize return and maximize risk. • Investors want to maximize return and minimize risk. Of the following, which is the most recent example of legislation passed by the federal government to deal with a major economic or highly visible corporate event? • The Federal Deposit Insurance Corporation Improvement Act • The Securities and Exchange Act • The Sarbanes-Oxley Act • The Securities Act of 1933
Which of the following statements is TRUE if you increase your monthly payment above the required loan payment? • The extra portion of the payment increases the principal.
• You can significantly increase the number of payments needed to pay off the loan. • You can significantly reduce the number of payments needed to pay off the loan. • The extra portion of the payment does not go to the principal. In their first venture into the optimal capital structure question, Nobel laureates Franco Modigliani and Merton Miller began with a very simple model and a hypothetical world of ________. • no taxes and no bankruptcy • taxes but no bankruptcy • bankruptcy costs but no taxes • both taxes and bankruptcy The company offering a discount on accounts payable is trying to ________ and the firm that pays on time rather than taking a discount is attempting to ________. • speed up cash outflow; slow down cash inflow • speed up cash inflow; slow down cash outflow • speed up cash inflow; slow down cash inflow • speed up cash outflow; slow down cash outflow ________ refers to the way a company finances itself through some combination of loans, bond sales, preferred stock sales, common stock sales, and retention of earnings • Working capital management
• NPV • Cost of capital • Capital structure There are four primary financial statements that are used to measure the performance of a firm. Which of the choices below are included among these four? • The income sheet and statement of retained earnings • The balance sheet and statement of cash flows • The balance statement and income statement • The statement of cash flows and statement of balance
Acme Supply Co. has a new project that will require the company to borrow $3,000,000. Acme has made an agreement with three lenders for the needed financing. First National Bank will give $1,500,000 and wants 10% interest on the loan. Lockup Bank will give $1,000,000 and wants 12% interest on the loan. Southern National Bank will give $500,000 and wants 13% interest on the loan. What is the weighted average cost of capital for this $3,000,000? • 12.16% • 10.55% • 11.66% • 17% Which of the following statements is TRUE?
• The current ratio is current assets divided by current liabilities. • Total asset turnover is net income divided by total assets. • The quick ratio equals current assets – current liabilities divided by current liabilities. • The cash coverage ratio equals cash divided by current liabilities. Which of the statements below is FALSE? • There are three basic defensive mechanisms that can guard against the extreme case of nationalized assets. These include keeping critical operations private, financing operations and assets with local money, and receiving primary inputs outside the local economy. • One way that a multinational firm can minimize the potential of nationalization of assets by a foreign government is to share key elements of operations with the government. • Political risk involves changes in a foreign government. At one extreme is the case in which a local government “takes over” the assets of the company and nationalizes it. • Political risk involves changes in a foreign government. An extreme example is the case in which a government encourages foreign investment and gives breaks to companies willing to move operations locally. The current indirect exchange rate is 12 pesos per dollar. The anticipated annual inflation rate is 6% in the United States and 14% in Mexico. If the cash inflow in pesos is 50,000 in one year, what are the 50,000 pesos worth in U.S. dollars after conversion from pesos to dollars using the forward exchange rate? • $3,874.27
• $3,882.13 • $3,480.78 • $3,983.78 • ________ is the area of finance concerned with activities such as repayment of borrowed funds through dividends or interest payments. • International finance • Capital budgeting • Corporate finance • Investments ==============================================
FIN 419 Final Exam Guide (New)
FOR MORE CLASSES VISIT www.fin419assist.com 1) Risk and probability Micro-pub, Inc., is considering the purchase of one of two microfilm cameras, R and S. Both should provide benefits over a10-year period, and each requires an initial investment of $4,000. Management has constructed the following table of elements of rates of
return and possibilities for pessimistic, most likely, and optimistic results. 2) Capital asset princing model (CAPM) Use the capital asset princing model to find the required reurn. 3)a. What single investmentmade today, annual interest, will be worth $3,500 at the end of 10 years? b. What is the present value is $3,500 to be received at the end of 10 years if the discount rate is 6%? c. What is the most you would pay today for a promise to repay you $3,500 at the end of 10 years if your opportunity cost is 6% ? d. Compare, contrast, and discuss your findings in part a through c. 4) Loan Payment Determine the equal, annual, end-of-year payment required each year over the life of the loan to repay it fully during the stated term of the loan. 5) Loan amortization schedule Personal Finace Problem Joan Messineo borrowed $18,000 at a 14% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal, annual, end-of-year payments. 6) NPV Calculate the net present value (NPV) for a 30-year project with an initial investment of $ 0 and a cash inflow of $2,000 per year. Assume that the firm has an opportunity cost of 17%. Comment on the acceptability of the project. 7) Scenario Analysis Automated Food Distribution Corp. (AFDC) produces vending machines and places them in public buildings. The company has obtained permission to place one of its machine in a local library. The company makes two types of machines. One distributes soft
drinks, and the other distributes snack foods. AFDC expects both machines to provide benefits over a 8-year period, and each has a required investment of $2,990. The firm uses a 9.8% cost of capital. Management has constructed the following table of estimates of annual cash inflows for pessimistic., most likely, and optimistic results. 8) Degree of operating leverage Grey Products has fixed operating costs of $382,000, varaiable operating costs of $15.61 per unit, and selling price of $62.91 per unit. 9) Finding operating and free cash flows consider the balance sheets and selected data from the income statement of Keith Corporation. 10) Pro forma balance sheet – Basic Leonard Industries wishes to prepare a pro forma balance sheet for December 31,2016. The firm expects 2016 sales to total $3,000,000. 11) Aggressive versus conservative seasonal funding strategy Dynabase Tool has forecast its total funding requirements for the coming year. 12) Initiating a cash discount Gardner company currently makes all sales on credit and offers no cash discount. The firm is considering offering a 3% cash discount for payment within 15 days. The firm’s current average collection period is 60 days, sales are 40,000 units, selling price is $46 per unit, and visible cost per unit is $30. The firm expects that the change in credit terms will result in an increase in sales. 13) Degree of financial leverage North western Savings and Loan has a current capital structure consisting of $230,000 of 15% (annual interest) debt and 1,000 shares of common stock. The firm pays taxes at the rate of 30%. 14) Various Capital Structures Character Enterprises currently has $1.5 million in total assets and is totally equity financed. It is contemplating a
change in its capital structure. Compute the amount of debt and equity that would be outstanding is the firm were to shift to each of the following debt ratios: 10%, 20%, 30%, 40%, 50%, 60%, and 90%. ==============================================
FIN 419 Signature Assignment Financial Statement Analysis and Firm Performance (Healthy Eating Restaurant)
FOR MORE CLASSES VISIT www.fin419assist.com About Your Signature Assignment Signature/Benchmark Assignments are designed to align with specific program student learning outcome(s) in your program. Program Student Learning Outcomes are broad statements that describe what students should know and be able to do upon completion of their degree. Signature/Benchmark Assignments are graded with a grading guide or an automated rubric that allows the University to collect data that can be aggregated across a location or college/school and used for course/program improvements. Purpose of Assignment The purpose of this assignment is to allow students the opportunity to present a business idea supported by strong financial information. The
student will be able to identify the possible challenges of doing business in a foreign country and how to approach them. Assignment Steps Resources: Microsoft® PowerPoint®, Signature Assignment: Financial Statement Analysis and Firm Performance Template Prepare a 16- to 20- slide Microsoft® PowerPoint® presentation showing the details of a business you are interested in starting in a foreign country, and for which you need $300,000. The presentation should include the following information: • Business name • Executive summary • Description of the foreign country • Business description and structure • Market and company analysis • Marketing and sales operational plan • How you plan to use the $300,000 • Financial statements forecast (3 years) • Business health assessment - using the following ratios:Liquidity ratios • Solvency ratios • Asset management ratios • Profitability ratios • Market value ratios
Analyze and calculate the following scenarios in 525 words, including which one would you choose and why, and which financing option is best for your busines: • Investor #1 decided to loan you the $300,000, paying all of the interest (8% per year) and principal in one lump sum at the end of 5 years. • Investor #2 offers you the $300,000, paying interest at the rate of 8% per year for 4 years and then a final payment of interest and principal at the end of the 5th year. Discuss in 525 words the challenges and risks you may face in starting a business in a foreign country including the following: • Cultural, business, and political risks. • How you plan to avoid operational, transaction, and translation exposure
==============================================
FIN 419 Signature Assignment Financial Statement Analysis and Firm Performance (Starbucks in Australia)
FOR MORE CLASSES VISIT www.fin419assist.com
About Your Signature Assignment Signature/Benchmark Assignments are designed to align with specific program student learning outcome(s) in your program. Program Student Learning Outcomes are broad statements that describe what students should know and be able to do upon completion of their degree. Signature/Benchmark Assignments are graded with a grading guide or an automated rubric that allows the University to collect data that can be aggregated across a location or college/school and used for course/program improvements. Purpose of Assignment The purpose of this assignment is to allow students the opportunity to present a business idea supported by strong financial information. The student will be able to identify the possible challenges of doing business in a foreign country and how to approach them. Assignment Steps Resources: Microsoft® PowerPoint®, Signature Assignment: Financial Statement Analysis and Firm Performance Template Prepare a 16- to 20- slide Microsoft® PowerPoint® presentation showing the details of a business you are interested in starting in a foreign country, and for which you need $300,000. The presentation should include the following information: • Business name • Executive summary • Description of the foreign country • Business description and structure
• Market and company analysis • Marketing and sales operational plan • How you plan to use the $300,000 • Financial statements forecast (3 years) • Business health assessment - using the following ratios:Liquidity ratios • Solvency ratios • Asset management ratios • Profitability ratios • Market value ratios Analyze and calculate the following scenarios in 525 words, including which one would you choose and why, and which financing option is best for your busines: • Investor #1 decided to loan you the $300,000, paying all of the interest (8% per year) and principal in one lump sum at the end of 5 years. • Investor #2 offers you the $300,000, paying interest at the rate of 8% per year for 4 years and then a final payment of interest and principal at the end of the 5th year. Discuss in 525 words the challenges and risks you may face in starting a business in a foreign country including the following: • Cultural, business, and political risks. • How you plan to avoid operational, transaction, and translation exposure
==============================================
FIN 419 Week 1 Business Structure and Financial Statements
FOR MORE CLASSES VISIT www.fin419assist.com FIN 419 Week 1 Business Structure and Financial Statements Assignment Steps Develop a 1,050-word evaluation describing business structure and financial statements, including the following: • Identify and describe the legal categories of a business organization contrasting tax-related advantages and disadvantages. • Next, using your entrepreneur skills, consider starting your own business. What business structure would you choose and why? • Discuss financial statements for the chosen business structure, then explain with specific examples from the University Library, how these would help you make decisions about your business.
==============================================
FIN 419 Week 1 Individual Assignment Limited Liability Corporation and Partnership Paper (2 Papers)
FOR MORE CLASSES VISIT www.fin419assist.com This Tutorial contains 2 different Papers
Individual Assignment: Limited Liability Corporation and Partnership Paper Individual Assignment: Limited Liability Corporation and Partnership Paper • Resources: Week One readings • Write a 700- to 1,050-word paper in which you explain roles of limited liability corporations and partnerships. If you were establishing your own business, under what circumstances would you choose one instead of the other? • Format your paper according to APA standards
==============================================
FIN 419 Week 1 Individual Assignment Richardses’ Tree Farm Grows Up Case Study
FOR MORE CLASSES VISIT www.fin419assist.com Review the "Richardses' Tree Farm Grows Up - Mini Case" located in Chapter 1 of Financial Management: Core Concepts. Develop a 1,050-word analysis of the case study. Include the following: Analyze whether the major financial management decisions of the Richards family involve capital budgeting, capital structure, and working capital management. Explain whether the Richards family should form a regular corporation or choose one of the hybrid forms. Explain how incorporating will affect the Richards family's ability to transfer ownership to their children. Justify Jake's concerns with hiring professional management. Analyze whether incorporating will affect the Richards family's ability to give up a small amount of profit in exchange for protecting the environment. Evaluate how Jake might obtain more equity funding and perhaps create considerable wealth for the Richards family in the process.
Include at least two sources to justify your assignment. Format your assignment consistent with APA guidelines. Click the Assignment Files tab to submit your assignment. ==============================================
FIN 419 Week 1 Individual Finance lab (New)
FOR MORE CLASSES VISIT www.fin419assist.com This Tutorial contains excel sheet
P 11-1 Eric has another get-rich-quick idea, but needs funding to support it. He chooses an all-debt funding scenario. He will borrow $3683 from Wendy, who will charge him 7% on the loan. He will also borrow $3165 from Bebe, who will charge him 9% on the loan, and $2152 from Shelly, who will charge him 15% on the loan. What is the weighted average cost of capital for Eric? P11-2
Question : Grey’s pharmaceuticals has a new project that will require funding of $13.0 million. The company has decided to pursue an all-debt scenario. Grey’s has made agreements with four lenders for the needed financing. These lenders will advance the following amounts at the interest rates shown: P11-3
Question : Cost of debt. Kenny Enterorises has just issused a bond with a par value of $1,000, a maturity of twenty years, and a coupon rate of 9.4% with semiannual payments. What is the cost of debt for Kenny Enterprises if the bond sells at the following prices? What do you nitice about the price and the cost of debt?
a. What is the cost of debt for Kenny Enterprises if the bond sells at $941.16? b. What is the cost of debt for Kenny Enterprises if the bond sells at $1,000.00? c. What is the cost of debt for Kenny Enterprises if the bond sells at $1,041.55? d. What is the cost of debt for Kenny Enterprises if the bond sells at $1,176.64? P11-7
COST of Preffered Stock. Kyle is raising funds for his company by selling preferred stock. The preferred stock has a par value os $83 and a
dividend rate of 10.4%. the stock for $59.45 in the market. What is the cost of preferred stock for Kyle? P 11-9 Stan is expanding his business and will sell common stock for the needed funds. If the current risk-free rate is 4.3% and the expected market rate is 10.8%, what is the cost of equity for Stan if the beta of the stock is a)
What is the cost of equity for Stan if the beta of the stock is 0.62?
b)
What is the cost of equity for Stan if the beta of the stock is 0.86?
c)
What is the cost of equity for Stan if the beta of the stock is 1.09?
d)
What is the cost of equity for Stan if the beta of the stock is 1.35
==============================================
FIN 419 Week 2 Individual My FinanceLab (NEW)
FOR MORE CLASSES VISIT www.fin419assist.com This Tutorial comes with a excel sheet
P3-1
Future Value. Fill in the future values for the following table using one of the three methods below: a.
Use the future value formula, FV = PV*(1+r)n.
b.
Use the TVM keys from a calculor.
c.
Use the TVM function in a spreadsheet.
P3 – 4 Future Value. Grand opening Bank is offering a one-time investment opportunity for its new customer. A customer opening a new checking account can buy a special saving bond for $ 400 today , Which the bank will compound at 8.5% for the next ten years. The savings bond must be held for at least five years, but can then be cashed in at end of any year starting with years five. What is the value of the bond at each cash-in date up through year ten ? What is the value of the savings bond at the end of year five ? a.
What is the value of the savings bond at the end of year five ?
b.
What is the value of the savings bond at the end of year six?
c.
What is the value of the savings bond at the end of year seven?
d.
What is the value of the savings bond at the end of year eight?
e.
What is the value of the savings bond at the end of year nine?
f.
What is the value of the savings bond at the end of year ten?
P 3– 8
a.
Use the present value formula, PV = FV*---
b.
Use the TVM keys from a calculator.
c.
Use the TVM function in a spreadsheet.
P3-15 Future Value. YOU are a new employee with the metro daily planet. The planet offers three different retirement plans. Plans 1 starts the first day of work and puts $1,100 away in your retirement acc at the end of every year for 40 years. Plan 2 starts after 10 year and puts away $2,100 every year for year. Plan 3 starts after 20 year and puts away $4,100 every year for the last 20 year 0 employment. All tree plans guarantee an annual growth rate of 11%. a. Which plan should you choose if you plan to work at the Planet for 40 years ? b. Which plan should you choose if you plan to work at the Planet for only the next 30 years ? c. Which plan should you choose if you plan to work at the Planet for only the next 20 years ? d. Which plan should you choose if you plan to work at the Planet for only the next 10 years ? e. ?
What do the answers in parts (a) through (d) imply about savings
P4-5 Future Value. YOU are a new employee with the metro daily planet. The planet offers three different retirement plans. Plans 1 starts the
first day of work and puts $1,100 away in your retirement acc at the end of every year for 40 years. Plan 2 starts after 10 year and puts away $2,100 every year for year. Plan 3 starts after 20 year and puts away $4,100 every year for the last 20 year 0 employment. All tree plans guarantee an annual growth rate of 11%. a. Which plan should you choose if you plan to work at the Planet for 40 years ? b. Which plan should you choose if you plan to work at the Planet for only the next 30 years ? c. Which plan should you choose if you plan to work at the Planet for only the next 20 years ? d. Which plan should you choose if you plan to work at the Planet for only the next 10 years ? e. ?
What do the answers in parts (a) through (d) imply about savings
==============================================
FIN 419 Week 2 Team Assignment Evaluating Financial Statements (2 Papers)
FOR MORE CLASSES VISIT www.fin419assist.com
This Tutorial contains 2 Papers
Research two companies' financial statements from one of the following industries: Airline Automotive Pharmaceutical Oil/gas Retail Computer Hardware Analyze table 14.8 in Financial Management: Core Concepts, Ch. 14: "Financial Ratios: Industry Averages." Prepare the following ratios for the two sets of financial statements in MicrosoftÂŽ ExcelÂŽ: Price to Earnings Gross Margin Profit Margin Current Ratio Debt to Equity Return on Assets Return on Equity Compare your completed ratios to the industry average chart.
Evaluate in 175 words which company, of the two you have researched, is doing better. Format your assignment consistent with APA guidelines. Click the Assignment Files tab to submit your assignment. ==============================================
FIN 419 Week 2 Team Problem Set
FOR MORE CLASSES VISIT www.fin419assist.com Complete the following problem sets in Financial Management using MicrosoftÂŽ ExcelÂŽ: Chapter 2: 1, 2, 3, 4 Chapter 5: 1, 3, 5, 7 Chapter 5: Advanced Problems 1a and 1b Chapter 14: 9, 10, 11, 12 Format your assignment consistent with APA guidelines. Click the Assignment Files tab to submit your assignment. Chapter 2: Problem 1 1. Balance sheet. From the following balance sheet accounts,
a. construct a balance sheet for 2013 and 2014. b. list all the working capital accounts. c. find the net working capital for the years ending 2013 and 2014. d. calculate the change in net working capital for the year 2014. Chapter 2: Problem 2 2. Income statement. From the following income statement accounts, a. produce the income statement for the year b. produce the operating cash flow for the year
Chapter 2: Problem 3 3. Balance sheet. From the following balance sheet accounts, a. construct a balance sheet for 2013 and 2014 b. list all the working capital accounts c. find the net working capital for the years ending 2013 and 2014 d. calculate the change in net working capital for the year 2014 Chapter 2: Problem 4 4. Income statement. From the following income statement accounts, a. produce the income statement for the year Chapter 5: Problem 3 3. EAR. What is the EAR of a mortgage that is advertised at 7.75% (APR) over the next twenty years and paid with monthly payments?
Chapter 5: Problem 5 5. Present value with periodic rates. Let’s follow up with Sam Hinds, the dentist, and his remodeling project (Chapter 4, Problem 12). The cost of the equipment for the project is $18,000, and he will finance the purchase with a 7.5% loan over six years. Originally, the loan called for annual payments. Redo the payments based on quarterly payments (four per year) and monthly payments (twelve per year). Compare the annual cash outflows of the two payments. Why does the monthly payment plan have less total cash outflow each year? Original Problem from Chapter 4, Problem 12 to go with Chapter 5 Problem 5: 12. Payments. Sam Hinds, a local dentist, is going to remodel the dental reception area and add two new workstations. He has contacted A-Dec, and the new equipment and cabinetry will cost $18,000. A-Dec will finance the equipment purchase at 7.5% over a six-year period. What will Hinds have to pay in annual payments for this equipment? Chapter 5: Problem 7 7. Future value with periodic rates. Matt Johnson delivers newspapers and is putting away $15.00 every month from his paper route collections. Matt is eight years old and will use the money when he goes to college in ten years. What will be the value of Matt’s account in ten years with his monthly payments if he is earning 6% (APR), 8% (APR), or 12% (APR)?
Chapter 5: Advanced Problem 1a & 1b
1. Monthly amortization schedule. Sherry and Sam want to purchase a condo at the coast. They will spend $650,000 on the condo and are taking out a loan for the whole amount for the condo for twenty years at 7.0% interest. a. What is the monthly payment on the mortgage? Construct the amortization of the loan for the twenty years in a spreadsheet to show the interest cost, the principal reduction, and the ending balance each month. b. Then change the amortization to reflect that after ten years, Sherry and Sam will increase their monthly payment to $7,500 per month. When will they fully repay the mortgage with this increased payment if they apply all the extra dollars above the original payment to the principal? Chapter 14: Problems 9, 10, 11 & 12 listed below:
9. Financial ratios: Liquidity. Calculate the current ratio, quick ratio, and cash ratio for Tyler Toys for 2013 and 2014. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders? 10. Financial ratios: Financial leverage. Calculate the debt ratio, times interest earned ratio, and cash coverage ratio for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders? 11. Financial ratios: Asset management. Calculate the inventory turnover, days’ sales in inventory, receivables turnover, days’ sales in receivables, and total asset turnover for 2013 and 2014 for Tyler Toys.
Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders? 12. Financial ratios: Profitability. Calculate the profit margin, return on assets, and return on equity for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders? ==============================================
FIN 419 Week 2 Time Value of Money Calculations
FOR MORE CLASSES VISIT www.fin419assist.com FIN 419 Week 2 Time Value of Money Calculations Assignment Steps Resources: Microsoft® Office® 2013 Accessibility Tutorials, Microsoft® Excel®, Time Value of Money Calculations Template Calculate the following time value of money problems using Microsoft® Excel®: 1. If we place $8,592.00 in a savings account paying 7.5 percent interest compounded annually, how much will our account accrue to in 9.5 years?
2. What is the present value of $992 to be received in 13.5 years from today if our discount rate is 3.5 percent? 3. If you bought a stock for $45 dollars and could sell it fifteen years later for three times what you originally paid. What was your return on owning this stock? 4. Suppose you bought a house for $3,250,000 to make it a nursing home in the future. But you have not committed to the project and will decide in nine years whether to go forward with it or sell off the house. If real estate values increase annually at 1.5%, how much can you expect to sell the house for in nine years if you choose not to proceed with the nursing home project? 5. If your daughter wants to earn $215,000 within the next twenty-three years and the salaries grow at 4.45% per year. What salary should she start to reach her goal? ==============================================
FIN 419 Week 3 Cash Conversion Cycle Analysis (CVS Health)
FOR MORE CLASSES VISIT www.fin419assist.com FIN 419 Week 3 Cash Conversion Cycle Analysis
Assignment Steps Select a multinational company from the following industries: • Retail • Pharmaceutical • Computer Hardware • Manufacturing • Automotive Review the selected company’s most recent financial statements. Calculate the following cash conversion cycle ratios based on the financial statements using Microsoft®Excel®: • Average inventory • Inventory turnover rate • Production cycle • Average account receivable • Account receivable turnover • Average collection cycle Explain in 700 words the importance of the cash conversion cycle, including: • Discuss the purpose of the cash conversion cycle and its components. • Analyze the results obtained in the cash conversion cycle equations. • Propose strategies to increase the cash flows of the company under study.
==============================================
FIN 419 Week 3 Cash Conversion Cycle Analysis (Samsung)
FOR MORE CLASSES VISIT www.fin419assist.com FIN 419 Week 3 Cash Conversion Cycle Analysis Assignment Steps Select a multinational company from the following industries: • Retail • Pharmaceutical • Computer Hardware • Manufacturing • Automotive Review the selected company’s most recent financial statements. Calculate the following cash conversion cycle ratios based on the financial statements using Microsoft®Excel®: • Average inventory • Inventory turnover rate
• Production cycle • Average account receivable • Account receivable turnover • Average collection cycle Explain in 700 words the importance of the cash conversion cycle, including: • Discuss the purpose of the cash conversion cycle and its components. • Analyze the results obtained in the cash conversion cycle equations. • Propose strategies to increase the cash flows of the company under study.
==============================================
FIN 419 Week 3 Cash Flow Estimation
FOR MORE CLASSES VISIT www.fin419assist.com FIN 419 Week 3 Cash Flow Estimation Assignment Steps Create a 700-word summary explaining the importance of cash flow.
Include the following: • How cash flow differs from profits. • The author of Financial Management mentions seven issues that have to be kept track of during a comprehensive cash flow estimation process. Explain the role of each, when estimating cash flow. • Why should cash flow be projected for a new product and what other factors should be included in the analysis? ==============================================
FIN 419 Week 3 Individual Assignment Biocom, Inc. Case Study
FOR MORE CLASSES VISIT www.fin419assist.com Read the "Mini-Case Biocom, Inc.: Part 2, Evaluating a New Product Line" from the end of Chapter 10 of Financial Management: Core Concepts. Complete questions 1-7 in Microsoft® Excel. Evaluate the following in a 350-word response: Explain what depreciation, cash flow, operating cash flow and NPV are and how they interact with business decisions.
Explain why these financial concepts are important for you as an employee, owner, or investor. Format your assignment consistent with APA guidelines. Click the Assignment Files tab to submit your assignment.. ==============================================
FIN 419 Week 3 Individual My FinanceLab (NEW)
FOR MORE CLASSES VISIT www.fin419assist.com This Tutorial contains excel sheet
P10-4 (similar to) Opportunity cost. Richardses' Tree Farm, Inc. has branched into gardening over the years and is now considering adding patio furniture to its product lineup. Currently, the area where the patio furniture is to be displayed is a vacant slab of concrete attached to the indoor shop. The company originally paid $8000 to put in the slab of concrete three years ago. It would now cost $13000 to put in the same slab of concrete. Should the company consider the concrete slab when expanding its outdoor garden shop to include patio furniture? If yes, which value should it use?Should the company consider the concrete slab when
expanding its outdoor garden shop to include patio furniture? If yes, which value should it use?
(Select the best response.) A. No. The slab is a sunk cost unless there is another use for the slab that could provide cash flow to Richardses' Tree Farm. The additional cash flow that the slab could provide is the opportunity cost, not the current replacement cost or the original cost. B. Yes, use $13 comma 000 as the cost.
C. Yes, use $8 comma 000 as the cost. P10-5 Working capital cash flow. Cool Water, Inc. sells bottled water. The firm keeps in inventory plastic bottles at 12% of the monthly projected sales. These plastic bottles cost $0.007 each. The monthly sales for the first four months of the coming year are as follows:
What is the monthly increase or decrease in cash flow for inventory given that an increase is a use of cash and a decrease is a source of cash? Note: Enter a decrease as a negative number.
What is the change in working capital for January? What is the change in working capital for February? What is the change in working capital for March? P13-3 (similar to) Average production cycle. Use the following account information to find the average production cycle for Rian Company. 2013 and 2014 Selected Balance Sheet Accounts of Rian Company Cash sales
$463,000
Credit sales
$573,000
Total sales
$1,036,000
Cost of goods sold
$607,205
What is the average production cycle for Rian Company? P13-4 (similar to) Average production cycle. Use the following account information for Rian Company. 2013 and 2014 Selected Balance Sheet Accounts of Rian Company
12/31/14
12/31/13
Accounts receivable $42,912 Inventory
$62,011
Accounts payable
$52,041
$66,087
$29,433
Change $9,129
$4,076
$27,645
$1,788
2014 Selected Income Statement Items for Rian Company Cash sales $576000 Credit sales $500000 Total sales Cost of goods sold $554736 For the coming year, Rian Company wants to reduce its average production cycle to 39.5 days. If the target-ending inventory for 2015 is $68267, what cost of goods sold will the company need to reach its goal? P13-5 (similar to) Average collection cycle. Use the following account information to find the average collection cycle for Rian Company. 2013 and 2014 Selected Balance Sheet Accounts of Rian Company 2014 Selected Income Statement Items for Rian Company P 13-6 Average collection cycle. Use the following account information for Rian Company. 2013 and 2014 Selected Balance Sheet Accounts of Rian Company
2014 Selected Income Statement Items for Rian Company Cash sales Credit sales Total sales Cost of goods sold Rian Company had set a target of 23.2 days for the collection cycle for 2014. If total sales had remained at $ 965000, how much of the sales revenue would have needed to be cash sales for the company to have met the collection goal? P13-7 (similar to) Average accounts payable cycle. Use the following account information to calculate Rian Company's average accounts payable cycle. 2013 and 2014 Selected Balance Sheet Accounts of Rian Company 2014 Selected Income Statement Items for Rian Company
Cash sales $539000 Credit sales $664000 Total sales
$1203000 Cost of goods sold $632489 P13-8 (similar to) Average accounts payable cycle. Use the following account information for Rian Company. 2013 and 2014 Selected Balance Sheet Accounts of Rian Company Rian Company had set a target of 16.6 days for its payment (accounts payable) cycle. What would the ending balance in the accounts payable account for 2014 have needed to be to reach this target (holding all other accounts the same)? ==============================================
FIN 419 Week 4 Capital Budgeting Decision Models
FOR MORE CLASSES VISIT www.fin419assist.com FIN 419 Week 4 Capital Budgeting Decision Models Assignment Steps
Resources: Microsoft速 Excel速, Capital Budgeting Decision Models Template Calculate the following problems using Microsoft速 Excel速: Calculate the NPV for each project and determine which project should be accepted. Project A Project B Project C Project D Inital Outlay (105,000.000) (99,000.00) (110,000.00) (85,000.00) Inflow year 1 53,000.00 51,000.00 25,000.00 45,000.00 Inflow year 2 50,000.00 47,000.00 55,000.00 50,000.00 Inflow year 3 48,000.00 41,000.00 15,000.00 30,000.00 Inflow year 4 30,000.00 52,000.00 21,000.00 62,000.00 Inflow year 5 35,000.00 40,000.00 35,000.00 68,000.00 Rate 7% 10% 13% 18% Your company is considering three independent projects. Given the following cash flow information, calculate the payback period for each. If your company requires a three-year payback before an investment can be accepted, which project(s) would be accepted? Project D Project E Project F Cost 205,000.00 179,000.00 110,000.00 Inflow year 1 53,000.00 51,000.00 25,000.00 Inflow year 2 50,000.00 87,000.00 55,000.00 Inflow year 3 48,000.00 41,000.00 21,000.00
Inflow year 4 30,000.00 52,000.00 9,000.00 Inflow year 5 24,000.00 40,000.00 35,000.00 Using market value and book value (separately), find the adjusted WACC, using 30% tax rate. Component Balance Sheet Value Market Value Cost of Capital Debt 5,000,000.00 6,850,000.00 8% Preferred Stock 4,000,000.00 2,200,00.00 10% Common Stock 2,000,000.00 5,600,000.00 13% ==============================================
FIN 419 Week 4 Individual My FinanceLab (New)
FOR MORE CLASSES VISIT www.fin419assist.com P9-7 Net present value. Quark Industries has a project with the following projected cash flows:
a.
Using a discount rate of 9%
for this project and the NPV model, determine whether the company should accept or reject this project. b. %?
Should the company accept or reject it using a discount rate of 17
c. %?
Should the company accept or reject it using a discount rate of 18
P9-8 (similar to) Net present value. Lepton Industries has a project with the following projected cash flows: Initial cost: $470,000 Cash flow year one: $121,000 Cash flow year two: $260,000 Cash flow year three: $181,000 Cash flow year four: $121,000
a. Using a discount rate of 9% for this project and the NPV model, determine whether the company should accept or reject this project. b. %?
Should the company accept or reject it using a discount rate of 14
c. %?
Should the company accept or reject it using a discount rate of 21
P16-5 (similar to)
Break-even EBIT (with and without taxes). Alpha Company is looking at two different capital structures, one an all-equity firm and the other a levered firm with $4.8 million of debt financing at 7% interest. The all-equity firm will have a value of $8 million and 400,000 shares outstanding. The levered firm will have 160,000 160,000 shares outstanding. a. Find the break-even EBIT for Alpha Company using EPS if there are no corporate taxes. b. Find the break-even EBIT for Alpha Company using EPS if the corporate tax rate is 15%. c. What do you notice about these two break-even EBITs for Alpha Company?
P7-1 (similar to) Anderson Motors, Inc. has just set the company dividend policy at $0.85 per year. The company plans to be in business forever. What is the price of this stock if a.
an investor wants a return of 4%?
b.
an investor wants a return of 7%?
c.
an investor wants a return of 9%?
d.
an investor wants a return of 16%?
e.
an investor wants a return of 18%?
P7-2 (similar to)
Dietterich Electronics wants its shareholders to earn a return of 9% on their investment in the company. At what price would the stock need to be priced today if Dietterich Electronics had a a.
$0.40 constant annual dividend forever?
b.
$1.10 constant annual dividend forever?
c.
$1.60 constant annual dividend forever?
d.
$2.90 constant annual dividend forever?
==============================================
FIN 419 Week 4 Stock Valuation
FOR MORE CLASSES VISIT www.fin419assist.com FIN 419 Week 4 Stock Valuation Assignment Steps Resources: Stock Valuation Template Calculate the following stock valuation problems: • Company X is paying an annual dividend of $1.35 and has decided to pay the same amount forever. How much should you pay for the stock, if you want to earn an annual rate of return of 9.5% on this investment?
• You want to purchase common stock of Company X and hold it for 7 years. The company just announced they will be paying an annual cash dividend of $6.00 per share for the next 9 years. How much should you pay for the stock, if you will be able to sell the stock for $28 at the end of seven years and you want to earn an annual rate of return of 11% on this investment? Select one of the companies studied by one of the group members in Week 3. Search the Internet for financial information about the company selected. Evaluate the following in a 525-word response: • Characteristics of common and preferred stock. • How stock markets work. • The connection between the value of shares and dividends. • Mention the ticker symbol of the company studied, the current price of the stock, and its financial history. • Indicate if you would recommend investing in this stock and why. Explain.
==============================================
FIN 419 Week 4 Team Assignment Problem Set (New)
FOR MORE CLASSES VISIT www.fin419assist.com Ch 10 Advanced Problem 2 Chapter 13 Problem 18 Chapter 12 Problem 17 Ch 11 Advanced problem 1
ADVANCED PROBLEMS FOR SPREADSHEET APPLICATION These problems are available in MyFinanceLab. 1. Erosion costs. Ice Cream City plans to introduce a new flavor, wild berry, to its current set of five flavors, which include vanilla, French vanilla, strawberry, chocolate, and mint chocolate. The new sales of wild berry are projected as follows: The expected sales will come from both new customers and current customers who switch flavors. The current projected sales for the existing flavors (assuming no introduction of the new flavor) are Projected Sales However, if the company introduces wild berry, it will cut into the sales of the original flavors based on the following estimates: Percentage of Sales Erosion
Here are the revenue and cost per unit of ice cream for Ice Cream City: Vanilla: current revenue of $3.05 per unit and cost of $1.22 per unit French vanilla: current revenue of $3.15 per unit and cost of $1.38 per unit Strawberry: current revenue of $3.25 per unit and cost of $1.41 per unit Chocolate: current revenue of $3.25 per unit and cost of $1.57 per unit Mint chocolate: current revenue of $3.25 per unit and cost of $1.63 per unit Wild berry: projected revenue of $3.25 per unit and cost of $1.44 per unit Find the annual erosion of revenue, the cost savings, and the net cash flow with the new ice cream.
Ch 11 Advanced problem 1
Changing WACC and optimal choice. Austin Enterprises is currently an all-equity firm. The firm is considering selling debt (bonds) and retiring some of the equity. However, at each level of debt, debt becomes more expensive (cost of debt is rising), and the riskiness of the equity also rises with more and more debt. Using a spreadsheet, determine the best combination of debt and equity for Austin Enterprises if ·
The current beta of Austin Enterprises is 0.85.
·
The current market return is 12%.
·
The current risk-free rate is 3%.
·
The total equity is 20,000,000 shares at $25 per share.
·
Debt is sold in units of $2,000,000.
·
The first unit of debt has a cost of 7.5%.
·
The tax rate of Austin Enterprises is 40%.
· For each additional unit of debt (each additional $2,000,000), the cost of debt rises by 0.85%, and the beta of Austin Enterprises rises by 0.025. Where is the WACC the lowest? Graph the results of the changing WACC Chapter 12 Problem 17 Working capital and capital budgeting. Farbuck’s Tea Shops is thinking about opening another tea shop. The incremental cash flow for the first five years is as follows: · Initial capital cost = $3,500,000 Operating cash flow for each year = $1,000,000 Recovery of capital assets after five years = $250,000 The hurdle rate for this project is 12%. If the initial cost of working capital is $500,000 for items such as teapots, teacups, saucers, and napkins, should Farbuck’s open this new shop if it will be in business for only five years? What is the most it can invest in working capital and still have a positive net present value?
Chapter 13 Problem 18 Working capital and capital budgeting. Working capital investment is 25% of the anticipated first year sales for Wally’s Waffle House. The
first-year sales are currently projected at $4,300,000. The incremental cash flow (not including working capital investment) is · Initial cash flow = $13,700,000 outflow Cash flow years 1 through 10 = $2,850,000 What is the internal rate of return of the ten-year project with working capital factored into the cash flow? What is the net present value at a 15% weighted average cost of capital? What is the maximum investment in working capital for an acceptable project with a 15% weighted average cost of capital? ==============================================
FIN 419 Week 4 Team Assignment Problem Sets
FOR MORE CLASSES VISIT www.fin419assist.com In case different Questions/problems are asked by your instructor just email me Complete the following problem sets in Financial Management using Microsoft® Excel®: Chapter 7 : 5, 15 Chapter 9 : 10 Chapter 11 : 12
Chapter 16: 9, 10
Chapter 7 5. King Waterbeds has an annual cash dividend policy that raises the dividend each year by 4%. Last year’s dividend was $0.40 per share. What is the price of this stock if a. an investor wants a 5% return? b. an investor wants an 8% return? c. an investor wants a 10% return? d. an investor wants a 13% return? e. an investor wants a 20% return?
15. Using Yahoo! Finance (http://finance.yahoo.com/) and ticker symbol PEP, find PepsiCo’s historical dividend payment and current price. Historical dividends are available in the historical price section. Use these payments to find the annual dividend growth rate. (If you have a quarterly pattern be sure to annualize this quarterly growth rate.) Now, find the required rate of return for this stock, assuming
that the future dividend growth rate will remain the same and the company has an infinite horizon. Does this return seem reasonable for PepsiCo? Chapter 9 – Q10 10. Net present value. Lepton Industries has four potential projects, all with an initial cost of $1,500,000. The capital budget for the year will allow Lepton to accept only one of the four projects. Given the discount rates and the future cash flows of each project, determine which project Lepton should accept. ANSWER:
Chapter 11 – Q12 12. Book value versus market value components. The CFO of DMI is trying to determine the company’s WACC. Brad, a promising MBA, says that the company should use book value to assign the components percentage for the WACC. Angela, a long-time employee and experienced financial analyst, says the company should use market value to assign the components. The after-tax cost of debt is at 7%, the cost of preferred stock is at 11%, and the cost of equity is at 14%. Calculate the WACC using both the book value and market value approaches with the following information. Which do you think is better? Why?
Chapter 16 9. Finding the WACC. Monica is the CFO of Cooking for Friends (CFF) and uses the pecking order hypothesis (POH) philosophy when she raises capital for company projects. Currently, she can borrow up to
$600,000 from her bank at a rate of 8.5%, float a bond for $1,100,000 at a rate of 9.25%, or issue additional stock for $1,300,000 at a cost of 17%. What is the WACC for CFF if Monica chooses to invest: a. $1,000,000 in new projects? b. $2,000,000 in new projects? c. $3,000,000 in new projects?
10. Finding the WACC. Chandler has been hired by Cooking for Friends to raise capital for the company. Chandler increases the funding available from the bank to $900,000, but with a new rate of 8.75%. Using the data in Problem 9, determine what the new weighted average cost of capital is for borrowing $1,000,000, $2,000,000, or $3,000,000 Prepare the DuPont analysis for each of the two companies you researched in Week 2. Develop a 350-word analysis of the following: Compare the two company findings. Analyze the research and calculations to determine in which company you would invest. Format the assignment consistent with APA guidelines. Click the Assignment Files tab to submit your assignment. ==============================================
FIN 419 Week 5 Individual Assignment ICS Manufacturing Company Case Study
FOR MORE CLASSES VISIT www.fin419assist.com ICS Manufacturing Company Case Study ICS Manufacturing Company produces plastic parts for the automotive industry. Here is their Income Statement for 2015 – ICS Manufacturing Company Income Statement for 2015
Sales Revenue
$35,500,000
Cost of Goods Sold
12,725,000
Selling, General & Admin Exp 11,200,000 Depreciation Expense
3,200,000
EBIT
8,375,000
Interest Expense
350,000
Taxable Income
8,025,000
Taxes
3,210,000
Net Income
4,815,000
Transfer this income statement to an Excel spreadsheet and begin to prepare a Pro Forma Income statement for 2016 based on the following information: 1. Sales revenue to increase 5.2%, COGS to increase 4.5%, S,G&A will increase 3.8% and depreciation expense will be $3,255,000. Assume interest expense to be $375,000 and taxes are to be 40% of taxable income. You will now have income statements for 2015 and 2016 for ICS Manufacturing. This is the balance sheet information for ICS Manufacturing Company:
ICS Manufacturing Company Balance Sheet for year ending December 31, 2015
Assets Cash $5,825,000
Liabilities $2,625,000
Accounts Payable
Accounts Receivable $2,715,000 Liabilities $3,365,000
Other Current
Inventories $1,514,000 Liabilities $9,190,000
Total Current
Total Current Assets
Long Term Assets Liabilities
$6,854,000
Long Term
P, P & E Debt $1,205,000
$12,745,000 $1,225,000 Goodwill Other LT Debt
Intangible Assets Liabilities $3,455,000 Total LT Assets Liabilities
$5,275,000
Long Term $2,230,000 Total LT
$19,225,000 $12,645,000
Total Assets
Total
$26,079,000
Owners’ Equity Common Stock
$6,425,000 Retained
Earnings
$7,009,000 Total
Owners’ Equity
$13,434,000 Total
Liab/OE
$26,079,000
Transfer this balance sheet to an Excel spreadsheet and begin to prepare a Pro Forma Balance Sheet for 2016 based on the following information:
2. Cash will increase to $2,825,000 and accounts receivable will increase by 15%. The inventories will go up 35% and P, P, &E will go up $2,000,000 with an expansion to the plant. Long term debt will increase to $2,000,000 to help finance the plant expansion and add $1,137,150 to other LT debt.. You will now have balance sheets for 2015 and 2016 for ICS Manufacturing. Using the 2015 and 2016 financials for ICS, complete the following – show calculations and/or numbers you used to derive your answer: 3. ICS wants to take around $400,000 of its cash and invest in marketable securities. They anticipate receiving around $7.5% interest on their investment and would like to have it held for 10 years. What will be the FV of this $400,000 investment? 4. ICS believes they will only gain a 6% return on their $400,000 investment. Using the Rule of 72, how many years will it take to double their investment? 5. ICS plans on expanding their plant and will fund $2,000,000. Part of the funding will come from cash, but the balance of $775,000 will be financed. The interest rate will be 5% and ICS plans on borrowing the funds for 4 years. Prepare a loan amortization schedule for the 4 years with 5% interest for the $775,000 and assume making one payment per year. Show the schedule. 6. Using your 2015/2016 Income Statement and Balance Sheet, add a column for percentage of total. Compute the percentages for each line item for the financial statements. For the 2015 Income Statement, what is the percentage of COGS as compared to total sales? Is this figure reasonable and what is COGS and why is it important to a company?
7. Financial Ratios provide information to analyze a company’s performance. Solve the following ratios for 2015 and 2016 using the Income Statement and Balance sheets you prepared for ICS Manufacturing. a.
Current Ratio – current assets/current liabilities
b.
Quick Ratio – (current assets – inventories)/current liabilities
c.
Cash Ratio – cash/current liabilities
d.
Debt Ratio – total liabilities/total assets
e.
Cash Coverage Ratio – (EBIT + depreciation/interest expense
f.
Inventory Turnover – cost of goods sold/inventory
g.
Receivables Turnover – sales/accounts receivable
h.
Total Asset Turnover – sales/total assets
i.
Profit Margin – net income/sales
j.
Return on Equity – net income/total owner’s equity
8. Find the industry ratios for the company using the Dun & Bradstreet® Key Business Ratios. Locate the Dunn & Bradstreet Database by accessing the University of Phoenix Library and then locating Library Resources. Click on Alphabetical List of Resources and find Dunn and Bradstreet. Click on the link and search for your selected company. ISC is a manufacturing company of plastic parts for the automotive industry – try and select a company closest to our company. Please use 3089 Plastic Products and NAICS of 326199 for manufacturing using 2014 data and the lower amount. Only provide the Quick and Current Ratios from 2015/2016 from problem 7 and add the
ratios from Dun & Bradstreet to compare and briefly suggest what direction ICS should head into with the comparison. 9. ICS plans to expand their operations as stated in Problem 5 – and are considering taking the loan – however, they have a few investors that are interested in lending money for this venture. They need a total of $775,000, and if they lend the money today, ICS will repay it, with interest, at the end of the year. Company A agrees to lend $300,000 and they require 5% interest, Company B will lend $200,000 at 6% interest, and Company C will loan the balance but they won’t settle for less than 10% interest. What is the weighted average cost of this capital (WACC)? 10. In 250-350 words, explain what cash flow is and why cash is so important to a business. Include in your analysis the cash that ICS maintains on hand and whether it is sufficient or not. ==============================================
FIN 419 Week 5 Individual My FinanceLab (with Excel File)
FOR MORE CLASSES VISIT www.fin419assist.com With Excel File (This Tutorial contains excel file to solve question for any values)
P18-1 Foreign exchange and commodity prices. While traveling in the following countries, you see twenty-ounce plastic bottles of Coca-Cola. You know the price in the United States for a Coke is $0.990.99, but the countries have the following prices: Canada: C$1.54 Japan: ¥155 England: £0.46 European Union: euro€0.89 What is the implied exchange rate for U.S. dollars and these four currencies?
P18-3 You are taking a trip to six European countries. It is a ten-day trip, and you are taking $ 3900 The current direct conversion rate is $1.1723 for euros. While in Europe, you spend euro€3 161.323 You convert your remaining euros back to U.S. dollars upon your return. If the exchange
rates remained the same over your trip, how much do you have left in U.S. dollars?
P18-4
Currency exchange rates. On the day you arrive in England, the exchange rate for U.S. dollars and British pounds is $1:pound 0.53 You have $3900, which you convert to pounds. While you remain in England for the next two weeks, the exchange rate falls to $1:ÂŁ0.490 As you leave England, you convert the ÂŁ126 you have left to dollars. How much did you spend in England in U.S. dollars? Did the movement in the exchange rate help or hurt you? ==============================================