Practice Final Answers

Practice Final Answers - 3. HF C; IB B; PF-D; CB-A 4. False...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Finance 310 Practice Final Answers Professor Keith Jacks Gamble Please use these answers to check your work on the practice final. I will not be providing written solutions to these problems, but I am very happy to discuss solutions to particular problems with you on the practice final discussion board, in office hours, or by email. 1. (examples may vary) Capital budgeting whether or not to build a new factory; Capital structure whether to raise money by selling stocks or bonds 2. Debt taking out a loan, which is more costly if the business tanks since it has to be paid back regardless of the company’s performance; equity – selling ownership, which is more costly if the business takes off since the valuable company must now be shared
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 3. HF C; IB B; PF-D; CB-A 4. False 5. ABCD 6. C 7. False 8. A 9. False 10. ABC 11. $3462.83 12. 36 years 13. Because you can earn interest in the 2 nd half of the month on the first halfs payment 14. 2402.05 15. No interest financing 16. 1,000,000 17. 53,803,578.59 18. 468,132.03 19. 606.94 20. 1,199.10 21. 1,000 interest and 199.10 principal 22. 300 23. Face value of $10,000 on the maturity date 24. 9,188.91 25. .0300 or 3.00% 26. 109.35 27. 25 28. Decrease by 8.33 29. 27.36 30. 13.51 31. Rtgt=.10 and Rcmg=.108 32. .104 33. .1554 34. Diversification 35. 217,250,000,000 36. .14 37. Watch 85.714 million; glasses 100 million 38. Watch .164; glasses .16 39. Both since NPV>0 for both 40. Glasses since it has a higher NPV...
View Full Document

Ask a homework question - tutors are online