#0:. EC. I d R Dimobs n 6.8.3.
3.?" V: H 03.8 On a 8.8. an H v D 3.8
I I. I I
U mg I. a. 1. +u 3.3 +9.2 Fug.
an M. . $38 u 833. 3. 13.2.1
3| 1 a. +o I are; + ob.
Sh gggggcgauonghsu3.8331 :73 Mums V
Chapters 5 & 6 Review
After reading this chapter, students should be able to:
Explain how the time value of money works and discuss why it is such an
important concept in finance.
Calculate the present value and future value of lump sums.
Survey course in finance introducing topics in corporate finance, investments, and financial institutions
Dr. Laura Cardella
Rawls College of Business
Office Hours: by appointment
& Practice Problems
Net Working Capital
If the firm is able to finance some or all of its inventories using trade
credits, this will offset the cash outflow. Thus the net increase is given
Production opportunities are the return that are available within economy from investment in
cash generation assets
Time preferences for consumption are the current consumption as opposed to saving for future
Risk deals with the
A) What is the goal of cash management?
The goal of cash management is to manage the cash balance of an organization to maximize the
availability of cash not invested in fixed assets.
B) Briefly describe float and the following associated cash manage
Find the following values for a lump sum assuming annual compounding:
A) The future value of $500 invested at 8 percent for one year:
FVN = FV1= PV (1 +I) N = $500 x (1 + 0.08) = $500 x 1.08 = $540
B) The future value of $500 invested at 8 percent for
Incremental Cash Flow: is the additional operating cash flow that an organization receives from
taking on a new project
Cash flow versus accounting income: accounting income is the financial figure that we get
after deduction of all business
Give minority shareholders more power to elect board of directors. Cumulative voting. A block trade is a trade involving 10,000 or more shares by a single holder. TRUE. A bond with a Moody's rating of Aaa and S&P rating of AAA will have a higher return th
Lecture 11 Time Value of Money
Investment Value: maximum price an investor is willing to pay for ownership interest in real property
Real estate valuation
o Estimate all future net cash flows
o Convert into estimate of present value
Lecture 1 1/23/17
Two types of property:
Can be real or personal property
Non-physical assets (stocks, bonds, leases, etc.)
Some of the most valuable real estate assets are intangible
CHAPTER 8 PROBLEMS:
BJ Gautney is evaluating a security. One-year Treasury Bills are
currently paying 2.9% and have a standard deviation of 1.81%.
a) The expected return is? (0.15*-0.03)+(0.30*0.02)+etc.
What is Finance?
The study of how people and businesses evaluate investments and raise capital to fund them.
What does the firm need money for?
o Expand or invest.
Where should the firm get money?
o Borrow money (Debt)
o Share the company (s
Jordan De La Garza, Director of Operations
February 27, 2017
SUBJECT: Exposure to Social Media to Broaden our Clientele
As a growing business, Office gadgets express has an opportunity to br
FEE WAIVER A PPLICA T I ON
*WAIVE REGISTRATION FEE FOR CURRENT TEXAS TECH STUDENTS TO ATTEND THE TTU SCHOOL OF BANKING *
All answers must be typed. Please respond to each item. Attach a separate sheet if additional space is needed.
BCOM Chapter 1
Three aspects that make up credibility:
Doesnt have character because she was unethical for not following the rules and
Lacked competence because she couldnt not follow the ru
7805 Slide Road, Lubbock, Texas 79424
(806) 687-8492 - www.LubbockDentistry.com
March 26, 2017
3720 95th Street
Lubbock, Texas 79423
Dear Mr. Taylor
Lubbock Dentistry has enjoyed serving the Lubbock communi
Types of Real Options
1. Option to Expand
2. Option to Wait
3. Option to Shrink or Abandon
4. Option to Vary the Mix of Output or the Production Methods
Option To Expand
Situation 1: Farmer expects to harvest 10,000 bushels of corn in
October, 2017. It is April 6, 2017 and farmer has taken out $20,000 in
loans that mature on October 31,2017. Current price of corn is
Situation 2: IB
Importance to Corporate Finance
The firm can be viewed as a combination of call option (equity
holders position) and a zero coupon bond less the value of a put
option. This recognition provides additional insight into the
The higher the price of the asset, the more valuable the option to buy.
The lower the price that you must pay to exercise a call, the more
valuable the option.
You do not need to pay the exercise price until the option is at expi
FlN 562-0 \n-uaaspmolice', Fall 2010
Chapter 5 ln-Class Practice
Problem (problem category)
1. What is the present value of a security that will pay $30,000 in 20 years if
securities of equal risk pay 5% annually? Assume annual compounding.
(single cash f
'mLVW of as Wuw
x>v= rv ,
*amnual mama/MS: 60m: cfw_w WJ W m
64 on MMM Wand/1&3 smwefw ?\I,l,w w
W = FV WV WW cfw_N M
(\+_1_. m' (j WWWL
* UM/Nm -. emm-/v Px/
100 400 m3 diboowvt
4r Pmno'rzy cfw_yowwe-fw
+910 35? 98.993 +3 :
\Qongwgml I\I\l|\|Vr 52 u 4% 9993 $3
/0 +0 c3 ".3 9:. S Z64 V O QEJ. 4.3.169.
% 25 N. :9 . .635) 13
\ SSkEvom " so: 5533 O
0,63; m. Pach @360, Q
m on . 8*: WEED .393 ~33 kSZbSoKy
5a A o 5 Enid Mv . PT? -
cOm own S mvu " 066
Continuous Compound: EAR = e^(quoted rate) - 1
Ordinary Annuity Payments at end of period
Annuity due Payments at beginning of period
What is the present value of cash
flows of $300 at the end of years 1
through 5, a cash flow of