Practice Problems for Chapter 2
5. To find the book value of current assets, we use: NWC = CA CL. Rearranging to solve for current assets, we get: CA = NWC + CL = $410,000 + 1,300,000 = $1,710,000 The market value of current assets and fixed assets
Problem Set #5 Solutions
6. To find the price of this bond, we need to realize that the maturity of the bond is 10 years. The bond was issued one year ago, with 11 years to maturity, so there are 10 years left on the bond. Also, the coupons are semi
Cost Accounting Traditions and Innovations
Barfield, Raiborn, Kinney
Chapter 8 The Master Budget
Learning Objectives (1 of 2)
Explain why budgeting is important Describe how strategic and tactical planning are related to budgeting Identify the starting p
BUAD 306 FALL 2008
Business Finance
Final - Sample
INSTRUCTIONS You have two hours to complete this exam. There are 22 questions. This exam is closed book and closed notes. You can use two two-sided formula sheets. Calculators are allowed.
IMPORTANT: Prov
THE UNIVERSITY OF SOUTHERN CALIFORNIA Marshall School of Business BUAD 306 Business Finance Fall 2008 Section 14787R TTH 4.00 5.50 p.m. HOH 421
Instructor Professor Ehud Peleg Office HOH 817 Office Hours W 2 4 p.m. Course Description and Objective
Finance
Net Present Value and Other Investment Criteria
1
Investment Criteria
Net Present Value The Payback Rule The Discounted Payback The Internal Rate of Return The Profitability Index
2
Good Decision Criteria
We need to ask ourselves the following questions
Making Capital Investment Decisions
1
Agenda
Relevant Cash Flows Different Types of Costs and Benefits Pro Forma Financial Statements and Project Cash Flows The Role of Net Working Capital and Depreciation Project Valuation Examples
2
Relevant Cash Flows
BUAD 306 FALL 2008
Business Finance
Midterm II - Sample
INSTRUCTIONS You have one hour and fifty minutes to complete this exam. There are 25 questions. This exam is closed book and closed notes. You can use your own two-sided formula sheet. Calculators ar
Problem Set #4 Solutions
3. To solve this problem, we must find the FV of each cash flow and add them. To find the FV of a lump sum, we use: FV = PV(1 + r)t [email protected]% = $700(1.08)3 + $950(1.08)2 + $1,200(1.08) + $1,300 = $4,585.88 [email protected]% [email protected]% = $700(1
Problem Set #3 Solutions
1. The simple interest per year is: $5,000 .06 = $300 So after 10 years you will have: $300 10 = $3,000 in interest. The total balance will be $5,000 + 3,000 = $8,000 With compound interest we use the future value formula:
Problem Set #2 Solutions
16. Assets Current assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment Total assets Liabilities and Owners Equity Current liabilities Accounts payable Notes payable Total Long-term debt Owner
Welcome to BAUD 306
1
VALUE
How do we determine VALUE? How can we create additional VALUE? How is VALUE shared? Can we cooperate in making VALUE?
3
Agenda
Financial Management Decisions and Financial Managers Forms of Business Organizati
Financial Statements, Taxes, and Cash Flows
1
Agenda
The Balance Sheet The Income Statement Taxes Cash Flow
2
Balance Sheet
The balance sheet is a snapshot of the firms assets and liabilities at a given point in time Assets are listed in or
THE UNIVERSITY OF SOUTHERN CALIFORNIA Marshall School of Business BUAD 306 Business Finance Fall 2008 Section 14782R TTH 8.00 9.50 a.m. HOH 1
Instructor Professor Ehud Peleg Office HOH 817 Office Hours W 2 4 p.m. Course Description and Objective
Practice Problems for Chapter 3
7. ROE = (PM)(TAT)(EM) ROE = (.085)(1.30)(1.35) = .1492 or 14.92%
8. This question gives all of the necessary ratios for the DuPont Identity except the equity multiplier, so, using the DuPont Identity: ROE = (PM)(TAT)
Introduction to Valuation: The Time Value of Money
1
Key Concepts and Skills
We will compute
the future value of an investment made today the present value of cash to be received at some future date the return on an investment the number of pe
Discounted Cash Flow Valuation
1
Agenda
Continue Annuities and Perpetuities Growing Annuities and Perpetuities Comparing Rates: The Effect of Compounding Loan Types and Loan Amortization
2
Finding the Rate
Your friend wants to borrow $2,000
Interest Rates and Bond Valuation
1
Agenda
Bonds vs Equity Bond Valuation Bond Features Duration and Interest Rate Risk Bond Ratings
2
Debt
Differences Between Debt and Equity
Equity
Not an ownership interest Creditors do not have votin
Problem Set #1 Solutions
1. To find owners equity, we must construct a balance sheet as follows: CA NFA TA Balance Sheet CL $3,400 LTD 6,800 OE ? $26,500 TL & OE $26,500 $4,000 22,500
We know that total liabilities and owners equity (TL & OE) must
BAUD 306 Midterm I Practice Problems
Chapter 9
You are analyzing a proposed project and have compiled the following information: Year Cash flow 0 -$145,000 1 $ 33,400 2 $ 70,500 3 $ 82,100 Required payback period 3 years Required return 9.50 percent 1. Wh