Principles of Finance I
Summer Semester, 2016
Syllabus Template
Course Number and Section: FIN 3301 / GN
Instructor: Marc A. Zuckerman
Course Name: Principles of Finance
Instructor Email: [email protected]
Financial Statement Analysis Problems Set
1. Vanity Press, Inc., has annual credit sales of $1,600,000 and a gross profit margin of 35
percent.
a. If the firm wishes to maintain an average collection
Capital Budgeting Problems Solutions
1.
NPV = $20,000 + $3,000(PVIFA0.12,10)
=  $20,000 + $3,000(5.650) = $3,050
PI = $3,000(5.650)/$20,000 = 0.85
The project is not acceptable because it has a neg
Valuation of Fixed Income Securities Problems Solutions
1.
n
a. Po = I/(1 + kd)t + M/(1 + kd)n
t=1
I = .0875 X 1000 = $87.50 kd = 0.07
M = $1000
n = 12 years (2022  2010)
12
Po = 87.50/(1 + 0.07)t +
Cost of Capital problems Set
1. Calculate the aftertax cost of a $25 million debt issue that Pullman Manufacturing
Corporation (40 percent marginal tax rate) is planning to place privately with a lar
Capital Budgeting Problems Set
1. Calculate the net present and profitability index of a project with a net investment of
$20,000 and expected net cash inflows of $3,000 a year for 10 years if the pro
Problem Set Solutions for Selected Problems from
Chapter 4  Financial Management by Brigham &
Ehrhardt
43
0 I/YR = ?

PV = 250,000
18

FV18 = 1,000,000
With a financial calculator enter the follow
Time Value of Money Problems Set
1. The mutual Assurance and life Company is offering an insurance policy under either of
the following two terms:
a. Make a series of twelve $1,200 payments at the beg
Stock Valuation Problem Solutions
1.
Po = $25 D1 = $1.25 ke = .12
ke = D1/Po + g
.12 = 1.25/25 + g
g = .07 (or 7%)
2.
Present Value of First 6Years' Dividends:
6
t
1
Year
t
[Do(1 + g1)t/(1 + ke)t]; D
Stock Valuation Problems Set
1. The common stock of General Land Development Company (GLDC) is expected to pay
a dividend of $1.25 next year and currently sells for $25. Assume that the firms future
d