FIN 370 Assignment Week 1 Apply Exercise FOR MORE CLASSES VISIT www.fin370homework.com FIN 370 Week 1 Apply Exercise Review the Week 1 ―Knowledge Check‖ in Connect® in preparation for this assignment. Complete the Week 1 ―Exercise‖ in Connect®. Note: You have only one attempt available to complete this assignment. Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after your due date. Materials Learn: McGraw-Hill Connect® Access Maximizing owners’ equity value means carefully considering all of the following EXCEPT Multiple Choice how best to return the profits from those projects to the owners over time. which projects to invest in. how to best bring additional funds into the firm. how best to increase the firm’s risk. Not all cash a company generates will be returned to the investors. Which of the following will NOT reduce the amount of capital returned to the investors? Multiple Choice taxes dividends retained earnings As individual legal entities, corporations assume liability for their own debts, so the shareholders hold Multiple Choice unlimited liability. shared liability. joint liability. only limited liability. For corporations, maximizing the value of owner’s equity can also be stated as Multiple Choice maximizing the stock price. maximizing earnings per share. maximizing retained earnings. maximizing net income. Which of the following is not an impact of the slowdown occurring in China’s economy? Multiple Choice falling community prices lower demand in materials such as steel, iron ore, and copper real estate market declining in Sydney, Australia money going out of Manhattan, New York What is the debt ratio for a firm with an equity multiplier of 3.5? Multiple Choice 58.51 percent 66.25 percent 44.09 percent 71.43 percent Which of the following refer to ratios that measure the relationship between a firm’s liquid (or current) assets and its current liabilities? Multiple Choice internal-growth market value liquidity cross-section For publicly traded firms, which of these ratios measure what investors think of the company’s future performance and risk?
Multiple Choice profitability ratios liquidity ratios price value ratios market value ratios Which of the following is the maximum growth rate that can be achieved by financing asset growth with new debt and retained earnings? Multiple Choice sustainable growth rate weighted growth rate internal growth rate retained earnings growth rate To interpret financial ratios, managers, analysts, and investors use which of the following type of benchmarks? Multiple Choice time series analysis time-industry analysis competitive analysis cross-industry analysis n both the original deposit and on the earlier interest payments Multiple Choice discounting. computing. multiplying. compounding. MC Qu. 4-71 A deposit of $500 earns 5… A deposit of $500 earns 5 percent the first year, 6 percent the second year, and 7 percent the third year. What would be the third year future value? Multiple Choice $595.46 $634.91 $671.02 $615.62 MC Qu. 4-9 With regard to money deposited in… With regard to money deposited in a bank, future values are Multiple Choice smaller than present values. are completely independent of present values. equal to present values. larger than present values. MC Qu. 4-17 What is the future value of… What is the future value of $2,000 deposited for one year earning 6 percent interest rate annually? Multiple Choice $4,120 $2.000 $120 $2,120 MC Qu. 4-10 A dollar paid (or received) in… A dollar paid (or received) in the future is Multiple Choice not comparable to a dollar paid (or received) today. worth as much as a dollar paid (or received) today. worth more than a dollar paid (or received) today. not worth as much as a dollar paid (or received) today. MC Qu. 4-29 Approximately how many years does it… Approximately how many years does it take to double a $300 investment when interest rates are 8 percent per year? Multiple Choice 9 years 11 years 4.17 years 0.11 years MC Qu. 4-7 The interest rate, i, which we… The interest rate, i, which we use to calculate present value, is often referred to as the Multiple Choice compound rate. dividend. multiplier. discount rate. MC Qu. 4-73 What is the present value of… What is the present value of a $600 payment in one year when the discount rate is 8 percent? Multiple Choice $525.87 $575.09 $555.56 $498.61 MC Qu. 4-78 Approximately what rate is needed to… Approximately what rate is needed to double an investment over five years? Multiple Choice 12.2 percent 8 percent 15.8 percent 14.4 percent MC Qu. 4-79 Determine
the interest rate earned on… Determine the interest rate earned on an $800 deposit when $808 is paid back in one year. Multiple Choice 100 percent 15 percent 10 percent 1 percent MC Qu. 4-109 You double your money in 5… You double your money in five years. The reason your return is not 20 percent per year is because: Multiple Choice it is probably a ―fad‖ investment. it does not reflect the effect of the Rule of 72. it does not reflect the effect of compounding. it does not reflect the effect of discounting. MC Qu. 5-146 Which of the following will increase… Which of the following will increase the future value of an annuity? Multiple Choice The number of periods increases. The amount of the annuity increases. The interest rate increases. All of these choices are . MC Qu. 5-22 What is the future value of… What is the future value of a $1,000 annuity payment over 4 years if the interest rates are 8 percent? Multiple Choice $4,506.11 $9,214.20 $4,320.00 $3,312.10 MC Qu. 5-74 If the present value of an… If the present value of an ordinary, 8-year annuity is $12,500 and interest rates are 9.1 percent, what is the present value of the same annuity due? Multiple Choice $14,114.80 $14,211.90 $13,941.90 $13,637.50 MC Qu. 5-147 Which of the following will increase… Which of the following will increase the present value of an annuity? Multiple Choice The effective rate is calculated over fewer years. The amortization schedule decreases. The interest rate decreases. The number of periods decreases. MC Qu. 5-30 If the future value of an… If the future value of an ordinary, 7-year annuity is $10,000 and interest rates are 4 percent, what is the future value of the same annuity due? Multiple Choice $10,700.00 $10,000.00 $10,400.00 $9,615.38 MC Qu. 5-31 If the future value of an… If the future value of an ordinary, 4-year annuity is $1,000 and interest rates are 6 percent, what is the future value of the same annuity due? Multiple Choice $943.40 $1,000.00 $1,040.00 $1,060.00 MC Qu. 5-33 A loan is offered with monthly… A loan is offered with monthly payments and a 6.5 percent APR. What is the loan’s effective annual rate (EAR)? Multiple Choice 5.69 percent 12.63 percent 7.28 percent 6.697 percent MC Qu. 5-15 People refinance their home… People refinance their home mortgages Multiple Choice when rates fall and rise. whenever they need to, independent of rates. when rates fall. when rates rise.
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FIN 370 Assignment Week 1 Practice Knowledge Check FOR MORE CLASSES VISIT www.fin370homework.com FIN 370 Week 1 Practice Knowledge Check Complete the Week 1 ―Knowledge Check‖ in Connect®. Note: You have unlimited attempts available to complete this practice assignment. The highest scored attempt will be recorded. These assignments have earlier due dates, so plan accordingly. Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after your due date. MC Qu. 1-14 Which of the following managers would… Which of the following managers would NOT use finance? Multiple Choice human resource managers marketing managers operational managers all of these choices are . MC Qu. 1-11 Which of the following is defined… Which of the following is defined as a group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations? Multiple Choice market instruments investments financial markets asset classes MC Qu. 1-63 An angel investor differs from a… An angel investor differs from a venture capitalist because of the Multiple Choice size of investment. voting rights. type of investment. investment time frame. MC Qu. 1-18 This type of business organization is… This type of business organization is entirely legally independent from its owners. Multiple Choice hybrid organizations partnership sole proprietorship public corporations MC Qu. 1-67 Which of these is the system… Which of these is the system of incentives and monitors that tries to overcome the agency problem? Multiple Choice checks and Balances Security Exchange Commission board of Directors corporate Governance MC Qu. 1-54 From the perspective of control, the… From the perspective of control, the best form of business organization is the Multiple Choice corporation. partnership. S corporation. sole proprietorship. MC Qu. 1-19 Which of the following is… Which of the following is NOT considered a
hybrid organization? Multiple Choice limited liability partnership limited liability company limited partnership all of these choices are . S corporation MC Qu. 1-1 The increase in oil production in… The increase in oil production in the United States characterizes which of the following key financial concepts presented in this book? Multiple Choice the Rule of 72 time value of money capital budgeting risk and return MC Qu. 1-59 All of the following are an… All of the following are an example of a fiduciary relationship EXCEPT Multiple Choice a financial advisor advises her clients. a CEO manages the firm. the shareholder elects a board member. a bank employee manages deposits. MC Qu. 3-85 Which ratio assesses how efficiently a… Which ratio assesses how efficiently a firm uses its fixed assets? Multiple Choice capital intensity ratio current ratio fixed asset turnover average collection period MC Qu. 3-90 A firm reported working capital of… A firm reported working capital of $5.5 million and fixed assets of $20 million. Its fixed asset turnover was 1.2 times. What was the firm’s sales to working capital ratio? Multiple Choice 4.36 times 6.03 imes 2.21 times 5.19 times MC Qu. 3-103 Which ratio measures the number of… Which ratio measures the number of dollars of operating cash available to meet each dollar of interest and other fixed charges that the firm owes? Multiple Choice fixed-charge coverage ratio cash coverage ratio operating coverage ratio times interest earned MC Qu. 3-25 You are evaluating the balance sheet… You are evaluating the balance sheet for Blue Jays Corporation. From the balance sheet you find the following balances: cash and marketable securities = $200,000, accounts receivable = $800,000, inventory = $1,000,000, accrued wages and taxes = $250,000, accounts payable = $400,000, and notes payable = $300,000. What are Blue Jays’ current ratio, quick ratio, and cash ratio, respectively? Multiple Choice 3.07692, 1.53846, 0.30769 1.05263, 1.05263, 0.21053 2.10526, 1.05263, 0.21053 3.07692, 1.05263, 0.30769 MC Qu. 3-6 Which of the following ratios measure… Which of the following ratios measure how efficiently a firm uses its assets, as well as how efficiently the firm manages its accounts payable? Multiple Choice quick or acid-test cash internal-growth asset management MC Qu. 3-20 For publicly traded firms, which of… For publicly traded firms, which of these ratios measure what investors think of the
company’s future performance and risk? Multiple Choice profitability ratios liquidity ratios price value ratios market value ratios MC Qu. 3116 Which ratio measures the overall return… Which ratio measures the overall return on the firm’s assets including financial leverage and taxes? Multiple Choice basic earning power ROE ROA profit margin MC Qu. 3-112 The maximum growth rate that can… The maximum growth rate that can be achieved by financing asset growth with internal financing or retained earnings is called the Multiple Choice internal growth rate. sustainable growth rate. retention rate. operating expansion rate. MC Qu. 3-22 Which of the following is the… Which of the following is the maximum growth rate that can be achieved by financing asset growth with new debt and retained earnings? Multiple Choice weighted growth rate internal growth rate sustainable growth rate retained earnings growth rate MC Qu. 3-23 To interpret financial ratios, managers, analysts,… To interpret financial ratios, managers, analysts, and investors use which of the following type of benchmarks? Multiple Choice time series analysis cross-industry analysis time-industry analysis competitive analysis MC Qu. 3-42 Last year Poncho Villa Corporation had… Last year Poncho Villa Corporation had an ROA of 16 percent and a dividend payout ratio of 25 percent. What is the internal growth rate? Multiple Choice 13.64 percent 33.33 percent 25.40 percent 1.19 percent =========================================
FIN 370 Assignment Week 2 Practice Knowledge Check FOR MORE CLASSES VISIT www.fin370homework.com FIN 370 Week 2 Practice Knowledge Check Complete the Week 2 ―Knowledge Check‖ in Connect®. Note: You have unlimited attempts available to complete this practice assignment. The highest scored attempt will be recorded. These assignments have earlier due dates, so plan accordingly. Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after your due date. Materials Learn: McGraw-Hill Connect® Access
MC Qu. 4-16 What is the future value of… What is the future value of $1,000 deposited for one year earning 5 percent interest rate annually? Multiple Choice $1,005 $1,000 $2,050 $1,050 MC Qu. 4-5 We call the process of earning… We call the process of earning interest on both the original deposit and on the earlier interest payments Multiple Choice discounting. computing. multiplying. compounding. MC Qu. 4-71 A deposit of $500 earns 5… A deposit of $500 earns 5 percent the first year, 6 percent the second year, and 7 percent the third year. What would be the third year future value? Multiple Choice $595.46 $634.91 $671.02 $615.62 MC Qu. 4-9 With regard to money deposited in… With regard to money deposited in a bank, future values are Multiple Choice smaller than present values. are completely independent of present values. equal to present values. larger than present values. MC Qu. 4-17 What is the future value of… What is the future value of $2,000 deposited for one year earning 6 percent interest rate annually? Multiple Choice $4,120 $2.000 $120 $2,120 MC Qu. 4-10 A dollar paid (or received) in… A dollar paid (or received) in the future is Multiple Choice not comparable to a dollar paid (or received) today. worth as much as a dollar paid (or received) today. worth more than a dollar paid (or received) today. not worth as much as a dollar paid (or received) today. MC Qu. 4-29 Approximately how many years does it… Approximately how many years does it take to double a $300 investment when interest rates are 8 percent per year? Multiple Choice 9 years 11 years 4.17 years 0.11 years MC Qu. 4-7 The interest rate, i, which we… The interest rate, i, which we use to calculate present value, is often referred to as the Multiple Choice compound rate. dividend. multiplier. discount rate. MC Qu. 4-73 What is the present value of… What is the present value of a $600 payment in one year when the discount rate is 8 percent? Multiple Choice $525.87 $575.09 $555.56 $498.61 MC Qu. 4-78 Approximately what rate is needed to… Approximately what rate is needed to double an investment over five years? Multiple Choice 12.2 percent 8 percent 15.8 percent 14.4 percent MC Qu. 4-79 Determine the interest rate earned on… Determine the interest rate earned on an $800 deposit when $808 is paid back in one year. Multiple Choice 100 percent 15 percent 10 percent 1 percent MC Qu. 4-109 You double your money in 5… You double your money in five years. The
reason your return is not 20 percent per year is because: Multiple Choice it is probably a ―fad‖ investment. it does not reflect the effect of the Rule of 72. it does not reflect the effect of compounding. it does not reflect the effect of discounting. MC Qu. 5-146 Which of the following will increase… Which of the following will increase the future value of an annuity? Multiple Choice The number of periods increases. The amount of the annuity increases. The interest rate increases. All of these choices are . MC Qu. 5-22 What is the future value of… What is the future value of a $1,000 annuity payment over 4 years if the interest rates are 8 percent? Multiple Choice $4,506.11 $9,214.20 $4,320.00 $3,312.10 MC Qu. 5-74 If the present value of an… If the present value of an ordinary, 8-year annuity is $12,500 and interest rates are 9.1 percent, what is the present value of the same annuity due? Multiple Choice $14,114.80 $14,211.90 $13,941.90 $13,637.50 MC Qu. 5-147 Which of the following will increase… Which of the following will increase the present value of an annuity? Multiple Choice The effective rate is calculated over fewer years. The amortization schedule decreases. The interest rate decreases. The number of periods decreases. MC Qu. 5-30 If the future value of an… If the future value of an ordinary, 7-year annuity is $10,000 and interest rates are 4 percent, what is the future value of the same annuity due? Multiple Choice $10,700.00 $10,000.00 $10,400.00 $9,615.38 MC Qu. 5-31 If the future value of an… If the future value of an ordinary, 4-year annuity is $1,000 and interest rates are 6 percent, what is the future value of the same annuity due? Multiple Choice $943.40 $1,000.00 $1,040.00 $1,060.00 MC Qu. 5-33 A loan is offered with monthly… A loan is offered with monthly payments and a 6.5 percent APR. What is the loan’s effective annual rate (EAR)? Multiple Choice 5.69 percent 12.63 percent 7.28 percent 6.697 percent MC Qu. 5-15 People refinance their home… People refinance their home mortgages Multiple Choice when rates fall and rise. whenever they need to, independent of rates. when rates fall. when rates rise. =========================================
FIN 370 Assignment Week 3 Practice Knowledge Check
FOR MORE CLASSES VISIT www.fin370homework.com FIN 370 Assignment Week 3 PracticeKnowledge Check Complete the Week 3 ―Knowledge Check‖ in Connect®. Note: You have unlimited attempts available to complete this practice assignment. The highest scored attempt will be recorded. These assignments have earlier due dates, so plan accordingly. Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after your due date. MC Qu. 7-67 Which of the following is NOT… Which of the following is NOT true about EE savings bonds? Multiple Choice These are tax deferred investments. Interest payments are received annually but are tax deductible. About one in six Americans owns a savings bond. Paper bonds sell for one-half of their face value. MC Qu. 7-4 Which of the following is a legal… Which of the following is a legal contract that outlines the precise terms between the issuer and the bondholder? Multiple Choice Prospectus Enforcement codes Debenture Indenture MC Qu. 7-125 A 4.15 percent TIPS has an… A 4.15 percent TIPS has an original reference CPI of 182.1. If the current CPI is 188.3, what is the par value of the TIPS? Multiple Choice $1,000.00 $1,004.75 $967.07 $1,034.05 MC Qu. 7-124 A 2.95 percent TIPS has an… A 2.95 percent TIPS has an original reference CPI of 180.2. If the current CPI is 205.1, what is the current interest payment and par value of the TIPS? (Assume semi-annual interest payments and $1,000 par value.) Multiple Choice $878.60, $16.79, respectively $1,000.00, $29.50, respectively $1,138.18, $29.50, respectively $1,138.18, $16.79, respectively MC Qu. 7-81 A 5.125 percent TIPS has an… A 5.125 percent TIPS has an original reference CPI of 191.8. If the current CPI is 188.3, what is the par value of the TIPS? Multiple Choice $992.75 $981.75 $1,018.60 $1,042.95 MC Qu. 7-38 Calculate the price of a zero… Calculate the price of a zero coupon bond that matures in 10 years if the market interest rate is 6 percent. (Assume semi-annual compounding and $1,000 par value.) Multiple Choice $1,000.00 $553.68 $558.66 $940.00 MC Qu. 7-18 Which of the following terms means… Which of the following terms means the
chance that future interest payments will have to be reinvested at a lower interest rate? Multiple Choice Credit quality risk Interest rate risk Reinvestment rate risk Liquidity rate risk MC Qu. 7-43 What’s the taxable equivalent yield on a municipal… What’s the taxable equivalent yield on a municipal bond with a yield to maturity of 3.9 percent for an investor in the 35 percent marginal tax bracket? Multiple Choice 1.09% 6.00% 11.14% 3.90% MC Qu. 7-21 Which of the following is an… Which of the following is an important advantage to the issuer of a bond with a call provision? Multiple Choice They allow for refinancing opportunities. They are able to avoid reinvestment rate risk. They are able to avoid interest rate risk. They are able to reduce their credit risk. Which of the following are backed only by the reputation and financial stability of the corporation? Multiple Choice Both debentures and unsecured bonds Debentures None of the options Unsecured bonds Which of the following terms is the chance that the bond issuer will not be able to make timely payments? Multiple Choice Interest rate risk Liquidity of interest rate risk Term structure of interest rates Credit quality risk As residual claimants, which of these investors claim any cash flows to the firm that remain after the firm pays all other claims? rev: 07_10_2017_QC_CS-93259 Multiple Choice preferred stockholders creditors common stockholders bondholders All of the following are stock market indices EXCEPT: Multiple Choice Dow Jones Industrial Average. Standard & Poor’s 500 Index. Nasdaq Composite Index. Mercantile 1000. You would like to sell 400 shares of International Business Machines (IBM). The current bid and ask quotes are $96.24 and $96.17, respectively. You place a limit sell-order at $96.20. If the trade executes, how much money do you receive from the buyer? Multiple Choice $38,464.00 $38,496.00 $38,468.00 $38,480.00 Investors sell stock at the: Multiple Choice dealer price. broker price. bid price. quoted ask price. At your discount brokerage firm, it costs $9.95 per stock trade. How much money do you need to buy 100 shares of Ralph Lauren (RL), which trades at $85.13? Multiple Choice $8,503.05 $8,503.00 $9,508.00 $8,522.95 A preferred stock from DLC pays $5.10 in annual dividends. If the required return on the preferred stock is 12.1 percent, what is the value of the stock? Multiple Choice $42.15 $47.25 $240.97 $6.31 At your discount
brokerage firm, it costs $10.50 per stock trade. How much money do you need to buy 100 shares of Apple (AAPL), which trades at $202.64? Multiple Choice $21,314.00 $20,274.50 $20,253.50 In $20,264.00 JPM has earnings per share of $3.75 and P/E of 47. What is the stock price? Multiple Choice $185.95 $174.08 $112.98 $176.25 Pfizer, Inc. (PFE) has earnings per share of $2.09 and a P/E ratio of 11.02. What is the stock price? Multiple Choice $18.97 $5.27 $23.03 $0.19 =========================================
FIN 370 Cash Flow Problem Sets (4-5,4-7,4-8,4-11,4-13) FOR MORE CLASSES VISIT www.fin370homework.com 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) =========================================
FIN 370 Final Exam Guide (New 2017) FOR MORE CLASSES VISIT
www.fin370homework.com Which one of the following statements is correct concerning the cash cycle? Accepting a supplier’s discount for early payment decreases the cash cycle. Increasing the accounts payable period increases the cash cycle. The longer the cash cycle, the more likely a firm will need external financing. The cash cycle can exceed the operating cycle if the payables period is equal to zero. Offering early payment discounts to customers will tend to increase the cash cycle. Precise Machinery is analyzing a proposed project. The company expects to sell 2100 units give or take 5 percent. The expected variable cost per unit is $260 and the expected fixed costs are $589,000. Cost estimates are considered accurate within a plus or minus 4 percent range. The depreciation expense is $129,000. The sales price is estimated at $750 per unit, give or take 2 percent. The tax rate is 35 percent. The company is conducting a sensitivity analysis on the sales price using a sales price estimate of $755. What is the operating cash flow based on this analysis? $86,675 $354,874 $368,015 $293,089 $337,975 You are doing some comparison shopping. Five stores offer the product you want at basically the same price but with differing credit terms. Which one of these terms is best-suited to you if you plan to forgo the discount? 2/10, net 30 2/5, net 30 2/5, net 20 1/10, net 45 1/5, net 15 The plowback ratio is: The dollar increase in net income divided by the dollar increase in sales. Equal to net income divided by the change in total equity. Equal to one minus the retention ratio. The change in retained earnings divided by the dividends paid. The percentage of net income available to the firm to fund future growth. Which one of the following is the financial statement that summarizes a firm’s revenue and expenses over a period of time? Statement of cash flows Market value report Tax reconciliation statement Balance sheet Income statement Kelly’s Corner Bakery purchased a lot in Oil City six years ago at a cost of $278000. Today, that lot has a market value of $264,000. At the time of the purchase, the company spent $6,000 to level the lot and another $8,000 to install storm drains. The company now wants to build a new facility on that site. The building cost is estimated at $1.03 million. What amount should be used as the initial cash flow for this project? -$1,294,000 -$1,322,000 -$1,045,000 -
$1,308,000 -$1,308,000 Webster United is paying a dividend of $1.32 per share today. There are 350,000 shares outstanding with a market price of $22.40 per share prior to the dividend payment. Ignore taxes. Before the dividend, the company had earnings per share of $1.68. As a result of this dividend, the: Retained earnings will decrease by $350,000. Earnings per share will increase to $3. Total firm value will not change. Price-earnings ratio will be 12.55. Retained earnings will increase by $462,000. The common stock of Dayton Repair sells for $43.19 a share. The stock is expected to pay $2.28 per share next year when the annual dividend is distributed. The firm has established a pattern of increasing its dividends by 2.15 percent annually and expects to continue doing so. What is the market rate of return on this stock? 7.67 percent 7.59 percent 7.43 percent 7.14 percent 7.28 percent Which one of the following should earn the most risk premium based on CAPM? Diversified portfolio with returns similar to the overall market. Stock with a beta of 1.38. Portfolio with a beta of 1.01. U.S. Treasury bill. Stock with a beta of 0.74. Which one of these actions will increase the operating cycle? Assume all else held constant. Decreasing the receivables turnover rate. Decreasing the payables period. Decreasing the average inventory level. Increasing the payables period. Increasing the inventory turnover rate. Oil Wells offers 6.5 percent coupon bonds with semiannual payments and a yield to maturity of 6.94 percent. The bonds mature in seven years. What is the market price per bond if the face value is $1,000? $902.60 $996.48 $913.48 $989.70 $975.93 Three Corners Markets paid an annual dividend of $1.37 a share last month. Today, the company announced that future dividends will be increasing by 2.8 percent annually. If you require a return of 11.6 percent, how much are you willing to pay to purchase one share of this stock today? $16.67 $16.00 $18.23 $17.68 $15.57 Which one of the following is a source of cash? Granting credit to a customer Purchase of inventory Acquisition of debt Payment to a supplier Repurchase of common stock Nadine’s Home Fashions has $2.12 million in net working capital. The firm has fixed assets with a book value of $31.64 million and a market value of $33.9 million. The firm has no long-term debt. The Home Centre is buying Nadine’s for $37.5 million in cash. The acquisition will be recorded using the purchase accounting method.
What is the amount of goodwill that The Home Centre will record on its balance sheet as a result of this acquisition? $5.86 million $3.34 million $4.14 million $1.48 million $3.74 million Chelsea Fashions is expected to pay an annual dividend of $1.10 a share next year. The market price of the stock is $21.80 and the growth rate is 4.5 percent. What is the firm’s cost of equity? 9.55 percent 10.54 percent 9.24 percent 7.91 percent 9.77 percent Operating leverage is the degree of dependence a firm places on its: Depreciation tax shield. Variable costs. Fixed costs. Operating cash flows. Sales. Phillips Equipment has 75,000 bonds outstanding that are selling at par. Bonds with similar characteristics are yielding 7.5 percent. The company also has 750,000 shares of 6 percent preferred stock and 2.5 million shares of common stock outstanding. The preferred stock sells for $64 a share. The common stock has a beta of 1.21 and sells for $44 a share. The U.S. Treasury bill is yielding 2.3 percent and the return on the market is 11.2 percent. The corporate tax rate is 34 percent. What is the firm’s weighted average cost of capital? 11.56 percent 11.30 percent 11.18 percent 10.64 percent 9.69 percent Andy deposited $3,000 this morning into an account that pays 5 percent interest, compounded annually. Barb also deposited $3,000 this morning into an account that pays 5 percent interest, compounded annually. Andy will withdraw his interest earnings and spend it as soon as possible. Barb will reinvest her interest earnings into her account. Given this, which one of the following statements is true? Barb will earn more interest the second year than Andy. Barb will earn more interest the first year than Andy will. Andy will earn compound interest. Andy will earn more interest in year three than Barb will. After five years, Andy and Barb will both have earned the same amount of interest. When utilizing the percentage of sales approach, managers: 1. Estimate company sales based on a desired level of net income and the current profit margin. 2. Consider only those assets that vary directly with sales. III. Consider the current production capacity level. 1. Can project both net income and net cash flows. III and IV only I, III, and IV only II and III only II, III, and IV only I and II only You are comparing two investment options that each pay 6 percent interest compounded annually. Both options will provide you with $12000 of income. Option A pays $2,000 the first year followed by two annual
payments of $5,000 each. Option B pays three annual payments of $4,000 each. Which one of the following statements is correct given these two investment options? Assume a positive discount rate. Option B is a perpetuity. Option B has a higher present value at time zero. Both options are of equal value since they both provide $12,000 of income. Option A has the higher future value at the end of year three. Option A is an annuity. The condition stating that the interest rate differential between two countries is equal to the percentage difference between the forward exchange rate and the spot exchange rate is called: Uncovered interest rate parity. The unbiased forward rates condition. Purchasing power parity. Interest rate parity. The international Fisher effect. The Dry Dock is considering a project with an initial cost of $118400. The project’s cash inflows for years 1 through 3 are $37200, $54600 and $46900, respectively. What is the IRR of this project? 8.42 percent 7.48 percent 8.56 percent 8.04 percent 8.22 percent The 7 percent bonds issued by Modern Kitchens pay interest semiannually mature in eight years and have a $1000 face value. Currently, the bonds sell for $1,032. What is the yield to maturity? 7.20 percent 6.87 percent 6.48 percent 6.92 percent 6.08 percent Al invested $7200 in an account that pays 4 percent simple interest. How much money will he have at the end of five years? $8,678 $8,710 $8,299 $8,056 $8,640 All of the following represent potential gains from an acquisition except the: Use of surplus funds. Tax loss carryovers acquired in the acquisition. Obtainment of a beachhead. Diseconomies of scale related to increased labor demand. Lower costs per unit realized. Fresno Salads has current sales of $6000 and a profit margin of 6.5 percent. The firm estimates that sales will increase by 4 percent next year and that all costs will vary in direct relationship to sales. What is the pro forma net income? $438.70 $327.18 $405.60 $303.33 $441.10 A news flash just appeared that caused about a dozen stocks to suddenly drop in value by 20 percent. What type of risk does this news flash best represent? Market Unsystematic Portfolio Total Non-diversifiable Which one of the following terms is defined as the mixture of a firm’s debt and equity financing? Cash management Cost analysis Working Capital Management Capital Structure Capital budgeting George and Pat just made an agreement to exchange currencies based on today’s exchange
rate. Settlement will occur tomorrow. Which one of the following is the exchange rate that applies to this agreement? Forward exchange rate Triangle rate Cross rate Current rate Spot exchange rate ==============================================
FIN 370 Final Exam Guide (New) FOR MORE CLASSES VISIT www.fin370homework.com 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 What’s 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 firm’s 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 machine’s 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 machine’s 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 firm’s 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 Will’s Wheels, Inc. reported a debt-to-equity ratio of 0.65 times at the end of 2013. If the firm’s total debt at year-end was $5 million, how much equity does Will’s 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 firm’s average beta. Using a divisional WACC versus a WACC for the firm’s 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 firm’s average beta. Using a simple firmwide WACC to evaluate new projects would give an unfair advantage to projects that present less risk than the firm’s 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 stock’s 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. =========================================
FIN 370 Week 1 Calculating Ratios Worksheet (2 Set) FOR MORE CLASSES VISIT www.fin370homework.com This Tutorial contains 2 Set of Answers FIN 370 Week 1 Calculating Ratios Worksheet 1. What is ―agency theory?‖ How can setting the appropriate goals for the firm minimize the agency problem? 2. Differentiate between profit maximization and wealth maximization. 3.Why must organizations focus on both shareholder wealth and the stakeholders? 4. Differentiate between the three financial statements with which managers should be familiar. How are they linked? =========================================
FIN 370 Week 1 Calculating RatiosLake of Egypt Marina (3-29, 3-30) FOR MORE CLASSES VISIT www.fin370homework.com FIN 370 Week 1 Calculating Ratios Review the financial statements for Lake of Egypt Marina, Inc. Complete the following problem sets from Chapter 3 in Microsoft® Excel®: • 3-29 Spreading the Financial Statements • 3-30 Calculating Ratios Format your assignment consistent with APA guidelines. Click the Assignment Files tab to submit your assignment =========================================
FIN 370 Week 1 Question and Problem Sets (Ch 1: Q 3,11 Ch 2: Q4,9, CH 3: Q4,7, Ch 4: Q 1,6) FOR MORE CLASSES VISIT www.fin370homework.com Purpose of Assignment Complete the following Questions and Problems (Concepts and Critical Thinking Questions for Ch. 1 Only) from each chapter as indicated. Show all work and analysis. Prepare in Microsoft® Excel® or Word. • Ch. 1: Questions 3 & 11 (Concepts Review and Critical Thinking Questions section) • Ch. 2: Questions 4 & 9 (Questions and Problems section): Microsoft® Excel® template provided for Problem 4. • Ch. 3: Questions 4 & 7 (Question and Problems section) • Ch. 4: Questions 1 & 6 (Questions and Problems section): Microsoft® Excel® template provided for Problem 6. Format your assignment consistent with APA guidelines if submitting in Microsoft® Word. Click the Assignment Files tab to submit your assignment. Ch. 1: Questions 3 & 11 (Concepts Review
and Critical Thinking Questions section) 3. Corporations [LO3] What is the primary disadvantage of the corporate form of organization? Name at least two advantages of corporate organization. 11. Goal of the Firm [LO2] Evaluate the following statement: Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long-term profits. Ch. 2: Questions 4 & 9 (Questions and Problems section): Microsoft® Excel® template provided for Problem 4. Building an Income Statement [LO1] Billy’s Exterminators, Inc., has sales of $817,000, costs of $343,000, depreciation expense of $51,000, interest expense of $38,000, and a tax rate of 35 percent. What is the net income for this firm? 3. Dividends and Retained Earnings [LO1] Suppose the firm in Problem 2 paid out $95,000 in cash dividends. What is the addition to retained earnings? 4. Per-Share Earnings and Dividends [LO1] Suppose the firm in Problem 3 had 90,000 shares of common stock outstanding. What is the earnings per share, or EPS, figure? What is the dividends per share figure? 9. Calculating Additions to NWC [LO4] The 2014 balance sheet of Steelo, Inc., showed current assets of $4,630 and current liabilities of $2,190. The 2015 balance sheet showed current assets of $5,180 and current liabilities of $2,830. What was the company’s 2015 change in net working capital, or NWC? • Ch. 3: Questions 4 & 7 (Question and Problems section) 4. Calculating Inventory Turnover [LO2] The Green Corporation has ending inventory of $417,381, and cost of goods sold for the year just ended was $4,682,715. What is the inventory turnover? The days’ sales in inventory? How long on average did a unit of inventory sit on the shelf before it was sold? 7. DuPont Identity [LO4] If Roten Rooters, Inc., has an equity multiplier of 1.15, total asset turnover of 2.10, and a profit margin of 6.1 percent, what is its ROE? Ch. 4: Questions 1 & 6 (Questions and Problems section): Microsoft® Excel® template provided for Problem 6. 1. Pro Forma Statements [LO1] Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes): 6. Calculating Internal Growth [LO3] The most recent financial statements for Schenkel Co. are shown here: Assets and costs are proportional to sales. Debt and equity are not. The company
maintains a constant 30 percent dividend payout ratio. What is the internal growth rate? =========================================
FIN 370 Week 2 Cash Flow Problem Sets (5-1,5-3,5-5,5-7,512,5-15,5-39) FOR MORE CLASSES VISIT www.fin370homework.com FIN 370 Week 2 Cash Flow Problem Sets Complete the following problem sets from Chapter 5 in Microsoft® Excel®: • 5-1 • 5-3 • 55 • 5-7 • 5-12 • 5-15 • 5-39 (Calculate monthly payment only) 5-1FutureValue Compute the future value in year 9 of a $2,000 deposit in year 1 and another $1,500 deposit at the end of year 3 using a 10 percent interest rate. 5-3 Future Value of an Annuity What is the future value of a $900 annuity payment over five years if interest rates are 8 percent? 5-5 Present Value Compute the present value of a $2,000 deposit in year 1 and another $1,500 deposit at the end of year 3 if interest rates are 10 percent. 5-7 Present Value of an Annuity What’s the present value of a $900 annuity payment over five years if interest rates are 8 percent? 5-12 Present Value of an Annuity Due If the present value of an ordinary, 6-year annuity is $8,500 and interest rates are 9.5 percent, what’s the present value of the same annuity due? 5-15Effective Annual Rate A loan is offered with monthly payments and a 10 percent APR. What’s the loan’s effective annual rate (EAR)? 5-39 Loan Payments You wish to buy a $25,000 car. The dealer offers you a 4-year loan with a 9 percent APR. What are the monthly payments? How would the payment differ if you paid interest only? What would the consequences of such a decision be? =========================================
FIN 370 Week 2 Financial Markets and Institutions Report (2 Papers)
FOR MORE CLASSES VISIT www.fin370homework.com 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. =========================================
FIN 370 Week 2 Question and Problem Sets (Ch 5: Q3,Q4 Ch 6: Q2, Q20, Ch 7 : Q3,Q11 Ch 8: Q1,Q6) FOR MORE CLASSES VISIT www.fin370homework.com Prepare in Microsoft® Excel® or Word. • Ch. 5: Questions 3 & 4 (Question and Problems section): Microsoft® Excel® templates provided for Problems 3 and 4 • • Ch. 6: Questions 2 & 20 (Questions and Problems section) • • Ch. 7: Questions 3 &11 (Questions and Problems section) • • Ch. 8: Questions 1 & 6 (Questions and Problems section): Microsoft® Excel® template provided for Problem 6 Format your assignment consistent with APA guidelines if submitting in Microsoft® Word. Click the Assignment Files tab to submit your assignment. Ch. 5: Questions 3 & 4 (Question and Problems section): 3. Calculating Present Values [LO2] For each of the following, compute the present value: 4. Calculating Interest Rates [LO3] Solve for the unknown interest rate in each of the following: Ch. 6: Questions 2 & 20 (Questions and Problems section) 2. Present Value and Multiple Cash Flows [LO1] Investment X offers to pay you $4,700 per year for eight years, whereas Investment Y offers to pay you $6,700 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5
percent? If the discount rate is 15 percent? 20. Calculating Loan Payments [LO2, 4] You want to buy a new sports coupe for $79,500, and the finance office at the dealership has quoted you an APR of 5.8 percent for a 60-month loan to buy the car. What will your monthly payments be? What is the effective annual rate on this loan? • Ch. 7: Questions 3 &11 (Questions and Problems section) 3. Valuing Bonds [LO2] Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 23 years to maturity, and a coupon rate of 5.8 percent paid annually. If the yield to maturity is 4.7 percent, what is the current price of the bond? Excel Sheet 11. Valuing Bonds [LO2] Union Local School District has a bond outstanding with a coupon rate of 3.7 percent paid semiannually and 16 years to maturity. The yield to maturity on this bond is 3.9 percent, and the bond has a par value of $5,000. What is the price of the bond? • Ch. 8: Questions 1 & 6 (Questions and Problems section): Microsoft® Excel® template provided for Problem 6 1. Stock Values [LO1] The Jackson–Timberlake Wardrobe Co. just paid a dividend of $1.95 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. If investors require a return of 10.5 percent on The Jackson–Timberlake Wardrobe Co. stock, what is the current price? What will the price be in three years? In 15 years? 6. Stock Valuation [LO1] Suppose you know that a company’s stock currently sells for $63 per share and the required return on the stock is 10.5 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it’s the company’s policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? =========================================
FIN 370 Week 3 Assignment Financial Ratio analysis FOR MORE CLASSES VISIT www.fin370homework.com
Purpose of Assignment Students should understand how to use the financial information and tools learned in the class on a public company, obtain public company SEC reports, and use that data to calculate a company's financial ratios and their comparison to industry or competitor standards. Assignment Steps Resources: Tutorial help on Excel® and Word functions can be found on the Microsoft®Office® website. There are also additional tutorials via the web that offer support for office products. Select one of the publicly traded corporations listed below and obtain the most current SEC Form 10-K (annual financial report) from the company's web site (Do not use the Annual Report that is sent to shareholders): • Lowes Corporation • Kroger Corporation • Harley Davidson Corporation • Apple Corporation • Intel Corporation • Marriott Corporation • Berkshire Hathaway Corporation • PepsiCo Corporation • Procter and Gamble Corporation • General Electric Corporation Calculate and analyze the following ratios for your selected company for the last two years from the SEC Form 10-K: • Current Ratio • Inventory Turnover • Debt Ratio • Time Interest Earned • Gross Profit Margin • Equity Multiplier • Return on Assets • Net Profit Margin • Return on Equity (Use three ratio DuPont method) Compare and contrast your company's ratios to industry and competitor standard ratios obtained from Yahoo Finance, Morningstar, MotleyFool, Macroaxis or other Internet sources, and provide a detailed answer and analysis as to why your company's ratios are different than the industry/competitor standard. Prepare your analysis in a minimum of 875 words in Microsoft® Word. The use of Microsoft®Word tables is encouraged. Cite the source of the industry/competitor ratio information. Format your assignment consistent with APA guidelines. Click the Assignment Files tab to submit your assignment. Note: Grades are awarded based upon individual contributions to the Learning Team assignment. Each Learning Team member receives a grade based upon his/her contributions to the team assignment. Not all students may receive the same grade for the team assignment. =========================================
FIN 370 Week 3 Individual AssingmentRisk and Return Analysis Report (2 Papers) FOR MORE CLASSES VISIT www.fin370homework.com 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. =========================================
FIN 370 Week 3 Question and Problem Sets (Ch 9: Q7 & Q8, Ch 10: Q3& Q13, Ch 11: Q 1 & Q7) FOR MORE CLASSES VISIT www.fin370homework.com Prepare in Microsoft® Excel® or Word. • Ch. 9: Questions 7 & 8 (Questions and Problems section) • Ch. 10: Questions 3 & 13 (Questions and Problems section) • Ch. 11: Questions 1 & 7 (Questions and Problems section) Format your assignment consistent with APA guidelines if submitting in Microsoft® Word. Click the Assignment Files tab to submit your assignment. • Ch. 9: Questions 7 & 8 (Questions and Problems section) 7. Calculating IRR [LO5] A firm evaluates all of its projects by applying the IRR rule. If the required return is 14 percent, should the firm accept the following project? 8. Calculating NPV [LO1] For the cash flows in the previous problem, suppose the firm uses the NPV decision rule. At a required return of 11 percent, should the firm accept this project? What if the
required return is 24 percent? • Ch. 10: Questions 3 & 13 (Questions and Problems section) 3. Calculating Projected Net Income [LO1] A proposed new investment has projected sales of $635,000. Variable costs are 44 percent of sales, and fixed costs are $193,000; depreciation is $54,000. Prepare a pro forma income statement assuming a tax rate of 35 percent. What is the projected net income? 13. Project Evaluation [LO1] Dog Up! Franks is looking at a new sausage system with an installed cost of $540,000. This cost will be depreciated straight-line to zero over the project’s five-year life, at the end of which the sausage system can be scrapped for $80,000. The sausage system will save the firm $170,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $29,000. If the tax rate is 34 percent and the discount rate is 10 percent, what is the NPV of this project? • Ch. 11: Questions 1 & 7 (Questions and Problems section) 1. Calculating Costs and Break-Even [LO3] Night Shades, Inc. (NSI), manufactures biotech sunglasses. The variable materials cost is $9.64 per unit, and the variable labor cost is $8.63 per unit. a. What is the variable cost per unit? b. Suppose NSI incurs fixed costs of $915,000 during a year in which total production is 215,000 units. What are the total costs for the year? c. If the selling price is $39.99 per unit, does NSI break even on a cash basis? If depreciation is $465,000 per year, what is the accounting break-even point? 7. Calculating Break-Even [LO3] In each of the following cases, calculate the accounting break-even and the cash break-even points. Ignore any tax effects in calculating the cash break-even. =========================================
FIN 370 Week 3 Risk and Return Problem Sets (7-21,7-27,819,8-21,9-33) FOR MORE CLASSES VISIT www.fin370homework.com 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®: • 721 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. Safeco’s 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 Lowe’s Companies (Table Attached) =========================================
FIN 370 Week 3 Team Assignment Precision Machines Part 1 (annotated bibliography and excel calculation) FOR MORE CLASSES VISIT www.fin370homework.com This Tutorial contains both annonated bibliography and excel file FIN 370 Week 3 Team Assignment Precision Machines Part 1 Precision Machines is preparing a financial plan for the next six months to determine the financial needs of the company. The historical analysis of the company’s sales shows that the company’s total sales are 30%
cash sales and 70% credit sales. Further analysis of credit sales shows that the company receives 50% of the credit sales one month after the sale and the remaining 50% in the second month after the sale. This means the cash collections from sales are 30% in the first month of the sale, 35% in the second month, and 35% in the third month. The materials purchased by the company amounts to 50% of the sales for the month. The company pays for the purchases one month after the initial purchase. The company likes to maintain a cash balance of $5,000. The cost of borrowing is 10%. The company plans to pay off the loan whenever there is a surplus and borrow when there is a deficit. The attached spreadsheet shows revenues (sales), expenses, capital expenditures, and other expenses for Precision Machines’ next six months. Using the information given on the spreadsheet, prepare a cash budget for January through June and determine the cash surplus, deficit, and the financing needs of the company. Note: There are two parts to this learning team assignment; Part 2 will be completed in Week 5. Review the Learning Team Assignment due in Week 5. Create an outline for the essay. Develop a 700-word annotated bibliography using at least 3 resources. Format your paper consistent with APA guidelines. Click the Assignment Files tab to submit your assignment. =========================================
FIN 370 Week 4 Cash Flow AnalysisFrank Smith Plumbing (calculation and 2 Papers) FOR MORE CLASSES VISIT www.fin370homework.com 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 Plumbing’s 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. =========================================
FIN 370 Week 4 Individual WACC and Corporate Investment Decisions FOR MORE CLASSES VISIT www.fin370homework.com
Purpose of Assignment Students should understand corporate risk and be able to use the financial models learned in the class to evaluate and calculate a company's weighted average cost of capital and use the analysis to make company investment decisions. About Your Signature Assignment This signature assignment is 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. The signature assignments may be graded with an automated rubric that allows the University to collect data that can be aggregated across a location or college/school and
used for program improvements. Assignment Steps Resources: Tutorial help on Excel® and Word functions can be found on the Microsoft®Office website. There are also additional tutorials via the web that offer support for office products. Scenario: Wilson Corporation (not real) has a targeted capital structure of 40% long term debt and 60% common stock. The debt is yielding 6% and the corporate tax rate is 35%. The common stock is trading at $50 per share and next year's dividend is $2.50 per share that is growing by 4% per year. Prepare a minimum 700-word analysis including the following: • Calculate the company's weighted average cost of capital. Use the dividend discount model. Show calculations in Microsoft® Word. • The company's CEO has stated if the company increases the amount of long term debt so the capital structure will be 60% debt and 40% equity, this will lower its WACC. Explain and defend why you agree or disagree. Report how would you advise the CEO. Format your paper consistent with APA guidelines. Click the Assignment Files tab to submit your assignment.
============================================== FIN 370 Week 4 Team Weighted Average Cost of Capital FOR MORE CLASSES VISIT www.fin370homework.com
Purpose of Assignment Students should understand the mechanics in calculating a company's weighted average cost of capital using the capital asset pricing model (CAPM) and its use in making financial investments. Assignment Steps Resources: Tutorial help on Excel® and Word functions can be found on the Microsoft®Office website.
There are also additional tutorials via the web that offer support for office products. Scenario: You work for an investment banking firm and have been asked by management of Vestor Corporation (not real), a software development company, to calculate its weighted average cost of capital, to use in evaluating a new company investment. The firm is considering a new investment in a warehousing facility, which it believes will generate an internal rate of return of 11.5%. The market value of Vestor's capital structure is as follows: Source of Capital Market Value Bonds $10,000,000 Preferred Stock $2,000,000 Common Stock $8,000,000 To finance the investment, Vestor has issued 20 year bonds with a $1,000 par value, 6% coupon rate and at a market price of $950. Preferred stock paying a $2.50 annual dividend was sold for $25 per share. Common stock of Vestor is currently selling for $50 per share and has a Beta of 1.2. The firm's tax rate is 34%. The expected market return of the S&P 500 is 13% and the 10-Year Treasury note is currently yielding 3.5%. Determine what discount rate (WACC) Vestor should use to evaluate the warehousing facility project. Assess whether Vestor should make the warehouse investment. Prepare your analysis in a minimum of 700 words in MicrosoftÂŽ Word. Use MicrosoftÂŽ Word tables in the presentation if you choose. Show all calculations and analysis in the presentation. Format your assignment consistent with APA guidelines. Click the Assignment Files tab to submit your assignment. Note: Grades are awarded based upon individual contributions to the Learning Team assignment. Each Learning Team member receives a grade based upon his/her contributions to the team assignment. Not all students may receive the same grade for the team assignment.
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FIN 370 Week 5 Question and Problem Set (Ch18-Q3, Ch18Q11, Ch20-Q8, Ch20-Q14, Ch21-Q4, Ch21-Q7, Ch26-Q1, Ch26-Q2) FOR MORE CLASSES VISIT www.fin370homework.com
Purpose of Assignment Students should understand the operating and cash cycles of a company, the mechanics in preparing a cash budget, the use of exchange rates and interest rate parity in international finance and valuation of a company in a merger and acquisition. Assignment Steps Resources: Tutorial help on Excel® and Word® functions can be found on the Microsoft®Office website. There are also additional tutorials via the web that offer support for office products. Complete the following Questions and Problems from each chapter as indicated. Show all work and analysis. Prepare in Microsoft® Excel® or Word. • Ch. 18: Questions 3 & 11 (Questions and Problems section) • Ch. 20: Questions 8 & 14 (Questions and Problems section) • Ch. 21: Questions 4 & 7 (Questions and Problems section) • Ch. 26: Questions 1 & 2 (Questions and Problems section): Microsoft® Excel® template provided for Problem 2 Format your assignment consistent with APA guidelines if submitting in Microsoft® Word. Click the Assignment Files tab to submit your assignment. Ch. 18: Questions 3 & 11 (Questions and Problems section) 3. Changes in the Operating Cycle [LO1] Indicate the effect that the following will have on the operating cycle. Use the letter I to indicate an increase, the letter D for a decrease, and the letter N for no change: a. Average receivables goes up. b. Credit
repayment times for customers are increased. c. Inventory turnover goes from 3 times to 6 times. d. Payables turnover goes from 6 times to 11 times. e. Receivables turnover goes from 7 times to 9 times. f. Payments to suppliers are accelerated. 11. Calculating the Cash Budget [LO3] Here are some important figures from the budget of Nashville Nougats, Inc., for the second quarter of 2015: The company predicts that 5 percent of its credit sales will never be collected, 35 percent of its sales will be collected in the month of the sale, and the remaining 60 percent will be collected in the following month. Credit purchases will be paid in the month following the purchase. In March 2015, credit sales were $235,000 and credit purchases were $161,300. Using this information, complete the following cash budget: Ch. 20: Questions 8 & 14 (Questions and Problems section) 8. Size of Accounts Receivable [LO1] The Arizona Bay Corporation sells on credit terms of net 30. Its accounts are, on average, four days past due. If annual credit sales are $9.75 million, what is the company’s balance sheet amount in accounts receivable? 14. Credit Policy Evaluation [LO2] The Snedecker Corporation is considering a change in its cash-only policy. The new terms would be net one period. Based on the following information, determine if the company should proceed or not. Therequired return is 2.5 percent per period. Ch. 21: Questions 4 & 7 (Questions and Problems section) 4. Using Spot and Forward Exchange Rates [LO1] Suppose the spot exchange rate for the Canadian dollar is Can$1.09 and the six-month forward rate is Can$1.11. a. Which is worth more, a U.S. dollar or a Canadian dollar? b. Assuming absolute PPP holds, what is the cost in the United States of an Elkhead beer if the price in Canada is Can$2.50? Why might the beer actually sell at a different price in the United States? c. Is the U.S. dollar selling at a premium or a discount relative to the Canadian dollar? d. Which currency is expected to appreciate in value? e. Which country do you think has higher
interest rates—the United States or Canada? Explain. 7. Interest Rates and Arbitrage [LO2] The treasurer of a major U.S. firm has $30 million to invest for three months. The interest rate in the United States is .31 percent per month. The interest rate in Great Britain is .34 percent per month. The spot exchange rate is £.573, and the three-month forward rate is £.575. Ignoring transaction costs, in which country would the treasurer want to invest the company’s funds? Why? Ch. 26: Questions 1 & 2 (Questions and Problems section): 1. Calculating Synergy [LO3] Pearl, Inc., has offered $357 million cash for all of the common stock in Jam Corporation. Based on recent market information, Jam is worth $319 million as an independent operation. If the merger makes economic sense for Pearl, what is the minimum estimated value of the synergistic benefits from the merger? 2. Balance Sheets for Mergers [LO2] Consider the following premerger information about Firm X and Firm Y: Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $6 per share. Assuming that neither firm has any debt before or after the merger, construct the postmerger balance sheet for Firm X assuming the use of purchase accounting.
============================================== FIN 370 Week 5 Team Assignment Precision Machines Part 2 (Cash Budget and Strategic Analysis) FOR MORE CLASSES VISIT www.fin370homework.com 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 =========================================