320_Final_Exam_Review_Sheet_Spring_2011

320_Final_Exam_Review_Sheet_Spring_2011 - Depreciation...

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BUS 320 Final Exam Chapter # Questions Topics 3 1 Understanding of Financial Statements 4 2 Financial Ratios 7 4 Understanding Bonds and Bond Calculations 8 2 CAPM, Beta, Market vs. Diversifiable Risk, SML 10 3 11 3 IRR, NPV, MIRR, NPV Profile 12 5 15 4 Types of Short-Term Financing, Cash Management, Credit Policy, Types of Float 1 Financial Forecasting 25 ********* Final Exam: Wednesday, May 4 th , 1:00 – 4:00 pm Review Problems 1. Calculate the MIRR for the following cash flows if the cost of capital is 10%. Year: 0 1 2 3 4 CF: -1,000 200 -200 800 500 (Answer = 8.86%) 2. Annual revenues = $200,000 beginning in 2010. Annual costs = $120,000 beginning in 2010. Building purchased in 2009 for $80,000. Equipment purchased in 2009 for $20,000. Initial investment of working capital in 2009 = $8,000 Tax rate = 30% and estimated life of project is 4 years (2010-2013). At end of 4 years, building will be sold for $70,000 and equipment sold for $2,000.
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Unformatted text preview: Depreciation rates: Year: 1 2 3 4 Building: 1.3% 2.6% 2.6% 2.6% Equipment: 20.0% 38.0% 25.0% 17.0% Calculate after-tax cash flows for years 2009 through 2013. Answers: 2009 = $-108,000 2010 = $57,512 2011 = $58,904 2012 = $58,124 2013 = $137,860 3. Balance Sheet (12/31/2010) Current Assets $1,200 A/P $400 Fixed Assets 1,600 S-T Notes Payable 200 Total $2,800 Long Term Debt 500 Common Stock 1,200 Retained Earnings 500 Total $2,800 Income Statement (Year Ending 12/31/2010) Sales $3,000 COGS 2,000 Depreciation 500 EBIT $500 Taxes (34%) 170 NI $330 Added to R/Es $132 Dividends paid $198 COGS for 2011 will remain 2/3 of Sales. Depreciation expense for 2011 is expected to be $650 and the firm expects sales to grow by 40% in 2011. The tax rate will remain at 34% and the Board of Directors has decided to maintain the current payout ratio for 2011. What is the Additional Financing Needed (AFN) for 2011? (Answer: $762.00)...
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This note was uploaded on 12/08/2011 for the course BUS 320 taught by Professor Sloan during the Spring '08 term at N.C. State.

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320_Final_Exam_Review_Sheet_Spring_2011 - Depreciation...

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