Ch. 1 Strive to maximize shareholder wealth through solid profitable growth and effective use of capital. A major advance was the decision-oriented process of allocating financial capital (money) for the purchase of real capital (long term P&E). Day
exam 11- 1 Solution No, each individual project should not be measured against the specific means of financing that project, but rather against the weighted average cost of financing all projects for the firm. This principle recognizes that the avail
Ch. 10 P1 $1,000x.09x20 = $1,800 a. $1,000x.06x20 = $1,200 b. $1,000x.08x20 = $1,600 c. $1,000x.12x20 = $2,400 P27 a. P0 = D1/Ke g = 12/10-5 =2.40 b. = 12/12-5 = 1.71 c. =12/10-7 = 4.00 d. =3.50/10-5 = .70
Christina Citek Mar. 3 Ch. 11 P1
Feb. 18 Ch. 7 P1 10,000 +70,000 -25,000 55,000 15,000 a. initial amt deposits checks balance float
4,000,000 daily collections x 2.5 days speed up = 10,000,000 additional collections 3,000,000 daily disbursements x 1.5 days slow down = 4,500,000
February 13, 2008 Ch.6 I. Working capital management A. Financing and controlling the current assets of a firm. B. Operating Cycle Use cash to purchase inventory, sell inventory and create acct. receivable. Collect receivable and then turns back into
February 25, 2008
Profit margin is net income/sales. 30% dividend is 30% of net income. Fixed assets and other assets are determined at the long term rate.
February 27, 2008 300,000 .10 30,000 9,000 21,000 sales profit margin net income dividends (3
March 5, 2008 Ch. 10 Valuation concept A. The value of an asset is: 1. The present value of the expected cash flow associated with the asset. 2. An investor must know a. The expected cash flows b. Timing of the cash flows c. Characteristics B. Price
Ch. 12 When we're talking capital budgeting, what we're talking about is long term investments. In Ch. 8-11, we learned that there is a cost to the Asset side of the balance sheet. The objective is to make sure, since we have these screening decision
February 27, 2008 Ch. 8 Source of S-T financing I. Trace credit accounts payable A. Largest source of S-T financing B. Spontaneous C. Discount Cost of discount not taken 2% discount > 2/10, net 30 Pay within 10 days 2%/(100%-2%) x (360 days)/(30-10)
Exam 1 Business Finance 50 questions Ch. 1 Pg. 8 The major drawback of a sole proprietorship is that there is unlimited liability to the owner.
Pg. 9 Corporation is unique because it's a legal entity, it may sue or be sued, engage in contracts, an
January 23, 2008 I. Role of financial Management A. Decision making 1. Fixed asset management 2. Efficient utilization of current assets 3. Capital structure 4. Dividend policy B. Emphasis rush return relationship Stock market: higher risk, but high
February 13, 2008
Working capital management
A. Financing and controlling the current assets of a firm.
B. Operating Cycle
Use cash to purchase inventory, sell inventory and create acct.
receivable. Collect receivable and then turns back into cash
March 17, 2008 Solve for bond values - on exam Assets = liabilities + owner equity Long term liabilities & common stock + retained earnings have a common cost associated with them. Chapter 11 Cost of Capital I. Overall concept A. A firm must str
February 18, 2008 Ch. 7 I. Cash management A. Cash is a necessary but low earning asset B. Financial managers attempt to: 1. Minimize cash balances 2. Meet obligations C. Reasons for holding cash 1. Transactions 2. Compensating balances 3. Precaution