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]
Credit Hours: 3
Office Hours: Before and Af
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 period of 50 days, what level of
accounts receivable sh
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 negative NPV and a PI
of less than 1.0.
2.
Year
a. Net Pre
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 large
insurance company. This longterm issue will yield 9
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 projects
required return is 12 percent. Is the project acc
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 following: N = 18, PV = 250000, PMT = 0, and FV
= 1000000. S
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 beginning of each of the next 12
years (the first payment
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]; Do = $5.00; g1 = .07; ke = .12
Dividend
Dt = 5.00(1 + .0
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
dividend payments are expected to grow at a constant rat