ie 305 final exam

ie 305 final exam - IE 305 Exam 3 Chap 2,12,13, 14 Stocks...

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IE 305 Exam 3 Chap 2,12,13, 14 Stocks and Mortgages Review Topics
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Time Value Basics P, F and A Linear and Geometric Gradients Finding (i) (internal rate of return) Finding (n) (how many time periods) Interest rate must be stated in terms of time period Comparing alternatives with same service life (or indefinite life where annual is OK) NO INFLATION problems or nominal/effective interest
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Main Topics Financial Statements Balance Sheet, Income Statement Cash Flow Assets = Liabilities + OE Key Ratios – Ones mentioned in Slides P/E, Earnings, Price and Outstanding Shares Use Diluted shares outstanding Horizontal and Vertical Analysis
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Replacement Analysis (Defender and Challenger) Sunk Costs, Operating Costs, Capital Costs, Salvage Value (Indefinite Service Life) [NO TAX Q’s] Cash Flow Approach Current salvage of defender is subtracted from initial cost of acquiring the challenger Opportunity Cost Approach Current salvage value of defender is treated as an Initial cost of keeping the defender When to Replace the Defender
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This note was uploaded on 04/06/2008 for the course IE 305 taught by Professor Wang during the Spring '08 term at Iowa State.

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ie 305 final exam - IE 305 Exam 3 Chap 2,12,13, 14 Stocks...

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