1. I am taking Form _ of the exam.
*a. A (You are Taking this Form!)
2. My instructors name is
a. Basma Bekdache
b. Trang Doan
c. Matthew Roling
d. John Wagster
e. Ali Hammoud
*f. Chris Sullivan (This is Your Instructor!)
3. I am taking a(n) _ exam.
Management & Information Systems
COURSE: ISM 5860 - Data Communications and Networks
CRN: 15375 SECTION: 001
INSTRUCTOR: Richard Lerman, MBA, M.Ed.
OFFICE: Prentis Bldg, Suite 6
PHONE: (313) 577-1624
EMAIL ADDRESS: [email protected]
FIN 3290 Lecture 14
oTHE ONLY RISK THAT MATTERS IS SYSTEMATIC
OR MARKET OR NON-DIVERSIFIABLE RISK
oWE MEASURE THIS RISK BY BETA, .
oBETA, : SENSITIVITY OF AN ASSETS RETURN
TO MOVEMENTS IN THE MARKET (COMMON
Cov(i, M )
o , BE
1. A good capital budgeting or investment decision is one in which the
benefits are worth more to the firm than the cost of the asset.
2. Privately held corporations are allowed to have stockholders.
Why is finding the P(Bond) important?
- To determine how much to lend
- If owner of the bond, how much should you sell the asset if you need money
- if you want to buy the asset how much should you pay for the asset.
Consider a bond with a coupon rate of
Bonds and Bond Valuation
Maturity and Bond Valuation
Semi-annual Bond Valuation
Some Different Types of Bonds
Interest Rate Risk
Determinants of Bond Yields
A bond is an instrument of debt. The borrower takes a loan with a face (p
Consider a bond with a coupon rate of 10% and semi-annual coupons. The par value is
$1,000 and the bond has 5 years to maturity. The yield to maturity is 11%. What is the
value of the bond?
Frequency of payments:
Interest per period:
i or Yield per period
Consider a bond with a coupon rate of 10% and annual coupons. The par value
is $1,000 and the bond has 5 years to maturity. The yield to maturity is 11%. What is the
value of the bond?
FV = F = -1000
i (YTM) < c%, P(Bond) > $
WAYNE STATE UNIVERSITY
School of Business Administration
Department of Finance
FIN 3290: Business Finance
CRN: 23879, Section: 003, Winter 2015
Instructor: Norkeith Smith, MA
Office: 328.10 Prentis
Class Meetings: Monday 6:00 p.m. - 8:45 p.m., 017 Prentis
21. Suppose a project costs $2,500 and produces cash flows of $400 over
each of the following 3 years. What is the IRR of the project?
A) There is not enough information; a discount rate is required
1.Which of the following statements regarding dividend yields is true?
A) It measures how much the stock's price will increase in a year.
B) It incorporates the par value of the stock into the calculation.
C) It is analogous to the current yield for a bon
1. Suppose that you have just purchased a share of stock for $40. The most
recent dividend was $2 and dividends are expected to grow at a rate of 2%
indefinitely. What must your required return be on the stock?
Annuity Due Defined
Annuity finite series (n) of equal payments (CF) that occur at
If the first payment occurs at the beginning of the period, it is called an
What is the difference between an ordinary annuity and a
Annuities and the Calculator
You will use the following buttons:
Interest per year =
Number of years =
Constant CF per Period =
The sign convention still holds.
If PMT is negative, PV/FV is positive
If PMT is positive, PV/FV is
- to calculate PV and FV of variable CF
Account for CF in every year.
Lump Sum Chapter 5. Third row, Financial Calculator, PMT = 0
Variable Cash Flow Chapter 6. Cash Flow Register, Financial
If your broker asks you to invest $100 today for the investment
opportunity, should you take the investment?
No the broker is charging more ($100) than you would be willing to
Saving For Retirement
You want to receive fiv
Suppose you plan to withdraw $100 from an account in one year and
$300 in three years. How much must there be in the account today if the
annual interest rate is 8%?
Solving for NPV or NFV?
Solution: The calculator method
How many seri
The Fundamentals of Capital
Firm Maximize Shareholder Wealth
Tools Chpts. 5 & 6
Applications Chpts. 8 & 9
Rules Chpt. 10
NET PRESENT VALUE
FIN 3290 Lecture 11
o CHAPTER 11
EVALUATION OF PROJECTS CASH FLOWS
- CAPITAL EXPENDITURE 0 and T
- ANNUAL CASH FLOWS 1 to T
- NET WO
PREVIEW OF CHAPTER
Chapter 9 Main issues
Valuation using relative sales values
Gross profit method
Inventory value at LCM
Retail inventory method
Compare HC to MV at the end of a fiscal year, and use
whichever is lower as
International Standard-Setting Organizations:
International Accounting Standards Board (IASB)
Issues International Financial Reporting Standards
Standards used on most foreign exchanges.
Standards used by foreign companies listing on U.S.
FIN 3290 Lecture 13
Final Exam: Thursday, April 30th 6:00 9:00 PM
oPROJECTS WITH DIFFERENT LIVES.
oREPLACEMENT OF AN ASSET
oCOST OF USING EXISTING ASSET
oHARVESTING AN ASSET
oCOST OF USING EXIST
FIN 3290 Lecture 3
TEXAS INSTRUMENTS BA-II PLUS
FV = future value
PV = present value
I/Y = period interest rate
Interest is entered as number of percent, not a decimal
N = number of periods
PMT = regular payments
If PV is th
FIN 3290 Lecture 5
IF M > 1
- REPLACE I BY I/M
Interest per period
o - REPLACE N BY N*M Number of periods
PVA N *M
m 1 m
Chapter 2 Quiz
Financing a Business or Raising Capital
1. How to obtain financing or raising capital?
a. There are two ways in which get the necessary funds.
i. Bankers loan you the money needed and counts as debt against
BUS 177 - Chapter 7 Quiz
Compare gross working capital and net working capital.
Gross working capital are current assets such as cash, marketable securities,
accounts receivable, and inventory. Net working capital is the difference
between a businesss
BUS 177 Chapter 9 Quiz
You deposit $3,500 into an account at the beginning of every year for 6 years.
The account pays 7% interest. How much will you have at the end of that
You deposit $4,000 at the end of each year i
Chapter 1 Quiz
What is finance?
Finance is the study of how money is managed and the
actual process of acquiring needed funds.
What is a market?
Market refers to all the current and potential consumers or businesses who
would use a comp
CH 11 Quiz
1. Discuss in depth four programs a small business can employ to manage risk?
a. Risk reduction= A decrease in the total amount of uncertainty present in a particular
situation. An example is when a business that installs sprin