Problem Set 1- Introduction to Managerial Finance.docx -...

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Matthew MilewskiProblem Set 1: Introduction to Managerial FinanceFIN 504Complete the following problems from Chapters 1 and 2 inPrinciples of Managerial Finance:1.The Role of Managerial Finance: P1-1; P1-3; P1-4; P1-52.The Financial Markets: E2-4; P2-1; P2-2; P2-4Chapter 1P1-1Liability comparisonsMerideth Harper has invested $25,000 in Southwest DevelopmentCompany. The firm has recently declared bankruptcy and has $60,000 inunpaid debts. Explain the nature of payments, if any, by Merideth in each of thefollowing situations.a. Southwest Development Company is a sole proprietorship owned byMs. Harper.
b. Southwest Development Company is a 50–50 partnership of Merideth Harperand Christopher Black.c. Southwest Development Company is a corporation.
P1-3Cash flowsIt is typical for Jane to plan, monitor, and assess her financial positionusing cash flows over a given period, typically a month. Jane has a savings account,and her bank loans money at 6% per year while it offers short-term investment ratesof 5%. Jane’s cash flows during August were as follows:a. Determine Jane’s total cash inflows and cash outflows.
b. Determine the net cash flow for the month of August.c. If there is a shortage, what are a few options open to Jane?

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