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QuickAnswersLong - Selected Answers to Numeric Problems...

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Selected Answers to Numeric Problems
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Note to the student: These Quick Answers are not intended to lead you to the solution to the questions and problems in your textbook. These are only to let you know if you have the correct final answer. In some cases (for long problems), a few key intermediate answers are given. As such, most intermediate answers, and all questions requiring discussion are not included. Note to the instructor: If you want to use the textbook problems as assignments and you have the ability to selectively give students access to the Solutions and these Quick Answers (for example through WebCT), you might give students access to these Quick Answers to reduce anxiety without unduly compromising the value of the assignment. Then, after the assignment is due, you can give them access to the full Solution.
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Chapter 2: Accounting Statements and Cash Flow 2.1 Common stock = 88,000 2.2 Total $212,000,000 2.3 Taxes = 51000 Net income = 99,000 2.4 a. net income 20X1 = -94500; net income 20X2 = -53,200 b. Operating CF 20X2 = $205,500; Operating CF 20X1 = $146,800 2.6 a. Net operating income = $400,000 b. Earnings before taxes = $300,000 c. Net income = $195,000 d. Operating Cash flow = $395,000 2.7 Cash flows from the firm -5000 Cash flows to investors of the firm -5000
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Chapter 3: Long-term Financial Planning and Growth 3.1 Total Assets $16,875,000 $16,875,000 3.2 a. EFN = $3.24 million b. Total liabilities = $525 million c. Total liabilities = 574.26 3.3 a. sustainable growth = 5.26% 3.4 a. EFN = 2,880,000 b. Total liabilities and equity = $38,400,000 c. 3.45%
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Chapter 4: Net Present Value 4.1 a. $1,628.89 b. $1,967.15 c. $2,653.30 4.2 a. $513.16 b. $1,818.18 c. $233.25 4.3 PV(C0) = $1,000 PV(C10) = $926.39 4.4 $92.30 4.5 $187,780.23 4.6 a. PV(Alternative 1) = $10,000,000 PV(Alternative 2) = $20,000,000 b. PV(Alternative 1) = $9,090,909.10 PV(Alternative 2) = $12,418,426.46 c. PV(Alternative 1) = $8,333,333.33 PV(Alternative 2) = $8,037,551.44 d. The two alternatives are equally attractive when discounted at 18.921 percent. 4.7 PV(Smith) = $115,000 PV(Jones) = $112,697.22 4.8 a. $214.55 b. $463.20 c. $680.59 4.9 The most she would be willing to pay for the property is $1,609,866.18. 4.10 a. PV(Investment) = $900,000 PV(Cash Inflows) = $875,865.52 b. NPV = -$24,134.48 c. NPV = -$4,033.18 4.11 NPV @10% = -$2,619.97 NPV @9% = $6,567.93 4.12 a. NPV = -$4,117.08 b. The firm will break even on the item with an 8.447 percent discount rate. 4.13 PV(Aunt) = $3,571.43 PV(Roommate) = $3,500 4.14 The interest rate required is 18.921%. 4.15 The value of the account at the end of seven years will be $6,714.61. 4.16
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This note was uploaded on 03/29/2010 for the course ECON 134a taught by Professor Lim during the Spring '08 term at UCSB.

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QuickAnswersLong - Selected Answers to Numeric Problems...

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