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 Th
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
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
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 f
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 Ho
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 Cri
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 Deprec
Making Capital Investment Decisions
Discounted Cash Flow Examples
1
Agenda
Examples of Discounted Cash Flow Analysis
Cost Cutting Machine Replacement Setting a Bid Price
Choices with Constrained Re
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 c
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
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 Account
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 a
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
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 H
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 multipli
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
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
Fin
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
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 t
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 pa