SOS-FINE2000 - York SOS Students Offering Support FINE 2000...

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York SOS: Students Offering Support 1 FINE 2000 Final Exam-AID Review Package Tutor: Felix Thai & Saima Kazi Email: [email protected] ; [email protected] Students Offering Support sponsors:
York SOS: Students Offering Support 2 Preface This document is directed to FINE 2000 students at the Schulich School of Business York University whom are looking for an additional resource to aid them with studying for the course midterm exam. It has been created with regard to the Winter 2009 course and is subject to change for future courses. The focus is primarily on information after the second midterm, Chapter 7-12, 14 References 1. Fundamentals of Corporate Finance: Third Edition 2. Sample questions were provided by Professor Ming Dong Contents General Study Tips……………………………………………………………………………..3 Chapter 7 Overview…………………………………………………………………… ............ 4 Chapter 8 Overview…………………………………………………………………………….5 Chapter 9 Overview.……………………………………………………………………………6 Chapter 10 Overview…………………………………………………………………………...7 Chapter 11 Overview…………………………………………………………………………...8 Chapter 12 Overview…………………………………………………………………………...9 Chapter 14 Overview………………………………………………………………………….10 Sample Problems……………………………………………………………………………...11
York SOS: Students Offering Support 3 General Study Tips Your exam format will be similar to your midterm in terms of organization. As usual, the best thing you can do is practice. You’ll have all your formulas, so don’t waste time trying to learn them by heart; just make sure you know how to use them. And need we mention the banal tips – manage your time wisely, don’t stress, come prepared with a calculator, get lots of sleep…? Format of your final exam: Part 1: Multiple Choice Questions (40 marks) Part 2: Problems/short answers (60 marks)
York SOS: Students Offering Support 4 Chapter 7 Overview – NPV and Other Investment Criteria The following are ways firms determine how to evaluate investment opportunities: NPV Formula: NPV = PV – Required Investment (C0) Take into consideration the opportunity cost of capital, as it is the return you give up by investing in the project. IRR IRR is the rate of return that makes the NPV equal to 0 Formula: NPV = PV of Anticipated Cash Flows – Cost of Asset = 0 o You can determine IRR by trial and error followed by a graph o You can determine IRR by using finance calculator Payback Period Rule Payback period is the time needed to recover the initial investment.

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