Running head: BANKING ISSUES
Finance, Accounting and Banking
Banking Issues
Lakisha Womack
Southern New Hampshire University
0
BANKING ISSUES
1
Banking Issues
Variety of factors is important for the choice of the banking institution as a financial
manager
SHORT-TERM
FINANCIAL
MANAGEMENT
Chapte r 1 - The Role of Working Capital
Prepared by Patricia R. Robertson
Kennesaw State University
2
Textbook Outline
Part I
Part II
Introduction to Liquidity
Management of Working Capital
Part III
Corporate Cash Manageme
Read the article The Design of a Cash Concentration System by Stone and Hill in
the Module Resource Folder. Comment on the major issues involved in the
structuring and implementation of an efficient cash collection system. Comment
on some of the problems
Capital budgeting and financing.
1. TelCo must decide whether to replace a computer system with a new model.
TelCo forecasts net before tax cost savings from the new computer over five years
as given below (in $000). It has a 12 percent cost of capital, a
Read the article The Design of a Cash Concentration System by Stone and Hill in
the Module Resource Folder. Comment on the major issues involved in the
structuring and implementation of an efficient cash collection system. Comment
on some of the problems
Course Syllabus
School of Business
COURSE NUMBER & TITLE:
Short-Term Financial Management (FIN610)
TERM/YEAR:
Fall Term, 2013 (Section # G1018)
CENTER:
Manchester Graduate
INSTRUCTOR: Dr. Gary P. Tripp
E-MAIL: [email protected]
OFFICE: Webster Hall (GSB) 2
What are some indications that investors are risk averse? How would you as a
portfolio manager support these investors? What kind of recommendations
would you make? What would you recommend as a portfolio manager to reduce
the risk for a risk adverse inve
07-02-2015
Problem 1.
a. Use the data given to calculate annual returns for Goodman, Landry, and the Market Index, and then calculate average returns over
the five-year period. (Hint: Remember, returns are calculated by subtracting the beginning price fro
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Graduate School of Business
Fall Term, 2013
FIN610: Handout #1
INSTRUCTOR: Dr. Gary P. Tripp
Chapter 1:
Questions (pg. 21): #1-2, #1-5, #1-6, and #1-8.
Problems (pp. 20 24): #1-1, #1-2, and #1-4.
Chapter 2:
Questions (pp.
2. Lauren has a margin account and deposits $50,000. Assuming the prevailing
margin requirement is 40 percent, commissions are ignored, and The Gentry
Wine Corporation is selling at $35 per share:
a. How many shares can Lauren purchase using the maximum a
Money and Capital Markets
14. If the interest rate is 10%, what is the present value of a security that
pays you $1,100 next year, $1,210 the year after, and $1,331 the year after
that?
PV = FV1 / (1+i) + FV2 / (1+i)2 + FV3 / (1+i)3
PV = $1,100/1.1 + $1,2
Financial Management
1. If you deposit $10,000 in a bank account that pays 10% interest annually, how much will
be in your account after 5 years?
N=5
I = 10%
PV = $10000
10000 * (1+0.1) ^ 5 = 16105.10
FV = 16105.10
3. Your parents will retire in 18 years.
Money and Capital Markets
14. If the interest rate is 10%, what is the present value of a security that pays
you $1,100 next year, $1,210 the year after, and $1,331 the year after that?
PV = FV1 / (1+i) + FV2 / (1+i)2 + FV3 / (1+i)3
PV = $1,100/1.1 + $1,2
10 A project has an initial cost of $40,000, expected net cash inflows of $9,000
per year for 7 years, and a cost of capital of 11%. What is the project s NPV?
(Hint: Begin by constructing a time line.)
10.2 Refer to Problem 10-1. What is the project s IR
Lott manufacturing, Inc. has been ordering parts for its production process in lots of 10,000 units. Each order costs the firm $50
Assumptions
Order Costs (F)
$50.00
Holding Costs per Unit (H)
$3.00
Total period quantity (T)
200,000
Order Quantity (Q)
10,
Based on your reading and other sources, do corporations have any responsibilities to society at large? Is
stock price maximization good or bad for society? Discuss why firms should behave ethically. Define
ethically.
Corporations absolutely have responsi
According to the text, the DuPont method is an alternate method to evaluate a firms ROE by breaking
down the return on equity equation into three component parts: profitability, efficiency, and an equity
multiplier and uses information from both the balan
7.5 Homework
Chapter 5, Question 1
What are the major arguments made by credit and marketing professionals for the
extension of trade credit?
The major arguments made by credit and marketing professionals for the extension of
credit is that it allows cust
A) Estimate the effective cost of the commerical paper assuming that this is the only commerical paper issue planned for the
Par
15,000,000
Discount
3.70%
Dealer Annual Fee
0.10%
Commitment Fee
0.25%
Days to Maturity
30
Discount
$
46,250.00
Discount Cost
Problem 1 Page 416
A) What is the effective rate earned on the investments portfolio?
Yield
1.077
Effective Rate
7.67%
B) What rate of return would have been calculated if one only looked at the ending portfolio value as compared with the begin
Beginning
9-4 Homework: Problem Set
1. How do cash forecasting and short-term borrowing strategies relate?
Cash forecasting can help a treasury department anticipate the ups and downs with the
seasonality of the operating cycle, including shortage of cash flows res
Problem 2 Page 126
Tricia wishes to apply NPV analysis to a newly received order. The company's credit terms are net 45 days. Its opportunity cost
$30,000. She finds out from the cost accounting department that variable costs are approximately 65% of sale
Suppose a firm pays a $50,000 trade credit obligation to a supplier in cash.
2A) What impact does this transition have on the firm's current ratio if the initial current ratio equaled 1?
The repayment of $50,000 in trade credit with cash will not change t
1) For each part below, calculate the amount of cash received by a company from its customers using the following data:
Beginning Receivables
Ending receivables
Sales
A) $
- $
500 $
2,000
B) $
900 $
1,500 $
5,000
C) $
1,000 $
750 $
2,500
A)
B)
C)
Sales
$2
8-4 Homework: Problem Set
1.What is an investment policy? What are the key inputs that a company might use in developing
the policy?
An investment policy defined the companys posture toward risk and return and specific show
the policy should be implemente
Homework 2
Name: HONGYI WANG
Chapter 14, Problem number 9
Investment in common stock:
i= 10%, n=3, FV= $100,000*1.1^3= $133,100 ; using financial calculator we get PV=$100,000
Investment in lease
PV=
$ 15,000 $ 125,000
+
=$ 106,311.0443
2
3
1.1
1.1
The le
2
Suppose a firm pays a $50,000 trade credit obligation to a supplier in cash.
Solution:
a.
What impact does this transition have on the firm's current ratio if the initial current ratio equaled 1?
Current Ratio is 1
Assume Current Assets
100000
Current L