FIN-310: PRINCIPLES OF FINANCE
Final Project: PowerCo
You are required to submit at the end of the semester a final project in which you will determine whether
PowerCo should construct a new generator to meet an expected rise in demand for power. You will
NGansert
Written 3
Ch 10: 3,4, 5,7
Ch 14:4
CH1O
3. Jersey Mining _earns 9.50 a share, sells for $90, and path $6 per share dividend. The stock is
split td/two for @and a $3 per share cash dividend is declared.
a. What will be the new price of the stock?
o
Nicole Ganseit
FIN301
Written Assignment 5
Ch 13: 1, 2, 4, 9
‘l. A $1,000 bond has a coupon of 6% and matures after 10 years.
a. What would be the bond’s price if comparable debt yields 8%?
b. What would be the price if the comparable debt yields 8% and t
Ch 7211—3, 5—7, 12—13
1.
2.
You invest $1,000 in a certificate of deposit that matures after 10 year and pays 5%
interest, which is compounded annually until the certificate matures.
a. How much interest will you earn if the interest is left to accumulate
N. Gansert
Written 4
Ch 11: 1,2, 3,5
Ch 14: 1,2
1. The dividend growth-model may be used to value a stock.
a. What is the value of a stock if: D(O)= $2, k= 10%, g = 6%?
b , ii - , .
\iﬁ) a(\“‘.OU) ,adom _, owe
,. , _~ : 5
b q pl -.oe> loLi .ou 3
b. Wh
FIN314 WRITTEN 1
1) Write a short essay discussing what finance is and what a market is discussing the different
types of markets and the relationship between those markets that trade economic resources.
In chapter 1, Financial and Economic Concepts, we a
Nicole Gansert
FIN314
Written 2
2
Discuss the importance of financial statements and how they are used by businesses.
Financial statements are the tools used when gauging a companys overall financial health.
These can be used by business owners, investors
Written Assignment 6
Submit solutions to the problems assigned in Week 6 to your mentor.
Chapter 19 Problem Set
Do Problems 2, 3, and 4 on pages 380—381.
TC :TQ’
: BiOOO 1—2.8Q
totw Momma: '43
3000 : L4 5
3000 :l 283362
2500 = Q
5000
5000
3&5
mm
TQf 5053,
N.Gansert
FIN314
Written 3
Discuss the differences between efficiency and effectiveness.
Efficiency and effectiveness vary in that effectiveness is the ability to complete a specific
task whereas efficiency measures how few resources used to accomplish th
Nicole Gansert
FIN314
Written 5
Explain the relationship between the time value of money and inflation.
Per the text, the time value of money is the loss of purchasing power that occurs over time as
a result of inflation. (Adelman other author? Very incon
Nicole Gansert
FIN 314
Written 6
Why is there a need for capital investment and what costs need to be considered when
developing a capital budget?
A capital investment describes any investment made to increase assets and generate additional
revenue. Compa
Nicole Gansert
FIN 314
Written 4
Discuss why forecasting is important to an organization including a brief discussion of
the six steps that an organization should follow when developing its forecasting model.
In terms of a start-up venture, accurate forec
Isabelle Cheridant
12/27/2015
Written Assignment 3
FIN-101-OL009
Chapter 10
3. Market Price of share after stock split = 9,000 / 200 = $45 per share
Minus the $3 that the company is paying per share cash dividend, the adjusted amount of the
stock after th
Isabelle Cheridant
1/2/2016
Written Assignment 4
FIN-301-OL009
Chapter 13
1,2,4,9
1. a. 60 x 1- (1+0.08)-10 /0.08 + 1000 x 1 / (1+0.08)10
60 x (1-.4631/0.08) + 1000 x (1 / 2.158)
402.75 + 463 = $865.75 is the price of the bond
b. 60 x 1- (1+0.08)-5 /0.08
FIN-301: PRINCIPLES OF FINANCE
Study Notes for Chapter 7
Perhaps no concept causes more difficulty for students of finance than the time value of money. Chapter
7 presents and illustrates this concept (i.e., future value and present value). The problems a
I (i) = interest rate cost of capital =7%
N (n) = number of periods, length of investment = 1 year
Interest factor for present value of annuity- Appendix D in textbook
Cash inflow (i, n) cost of investment (cash outflow) = Net present value
Problem 3
Inve
Problem 6:
a. What is the net present value of each investment?
A:
CF0
CF1
CF2
CF3
CF4
I
NPV
-10000
12407
0
0
0
12%
$962.21
B:
CF0
-10000
CF1
0
CF2
0
CF3
0
CF4
19390
I
12%
NPV
$2,073.84
b. What is the internal rate of return of each investment?
In excel u
Chapter 7 Problem SetDo Problems 1, 2, 3, 5, 6, 7, 12, and 13
on pages 128130 of the textbook.
1. a A $1000 invested over 10 years at 5% interest compounded annually will earn $628.89 in
interest.
P(1+i)^n
1000 (1+ .05)^10= $1628.89; 1628.89-1000= $628.8
Chapter 9 Problem SetDo Problems 3, 8, 9, and 11 on pages
208210 of the textbook.
3. Fill in the blanks:
Assets:
Current Assets
Cash
$250,000
Accounts receivable (1340000 less allowances for doubtful accounts of $20,000) 1,320,000
Inventory
1,410,000
Tot
Chapter 10 Problem SetDo Problems 3, 4, 5, and 7 on pages 238239 of the textbook.
Chapter 11 Problem SetDo Problems 1, 2, 3, and 5 on pages 260261 of the textbook.
Chapter 14 Problem SetDo Problems 1, 2, and 4 on pages 304305 of the textbook.
CH10
3.
a.
Chapter 13 Problem SetDo Problems 1, 2, 4, and 9 on pages 291292 of the textbook.
CH13
PB=(PMT/(1+i)^1) + (PMT/(1+i)^2) +(PMT/(1+i)^n) + (FV/(1+i)^n)
1. Given a $1,000 bond has a coupon of 6% and matures in 10 years
a. The bonds price if comparable debt y
Chapter 19 Problem SetDo Problems 2, 3, and 4 on pages 380381 of the textbook.
CH19
2. Given the two scales of output with a selling price of $4 a unit
TC= 3000+2.8Q
TC= 5000+ 2.4Q
a. The breakeven for each scale of operation is 2,500 and 3,125 respective
Chapter 21 Problem SetDo Problems 1, 2, and 3 on pages 423
424 of the textbook.
Chapter 22 Problem SetDo Problems 1, 2, 3, 4, 7, 10, and 11 on
460464 of the textbook.
CH 21
1. Given
Assets $400,000
Debt
$140,000
Preferred Stock 20,000
Common stock 240,00
Chapter 25 Problem SetDo Problems 3, 4, and 14 on pages
553555 of the textbook.
Chapter 26 Problem SetDo Problems 2, 5, 6, 9, and 11 on
pages 579580 of the textbook.
CH 25
3.
a. The EQQ for a firm that sells 5,000 units when the cost of placing an order
Written Assignment 6
Exercise 6.8
Net
Sales
Beginning
inventory
Net
Purchases
Ending
invento
ry
Cost of
goods
sold
Gross
Profit
Expens
es
Net
Income
or Loss
240,0
00
480,0
00
630,0
00
810,0
00
531,0
00
76,000
104,000
35,200
144,800
95,200
72,000
23,200
72