Chapter 3 Drill Problems
1. If a firm has a net profit margin of 15% and total asset turnover of 2.5, and if 40% of
its assets are financed by equity, what is the firms return on equity?
Use the following to solve 2 and 3
2. What is NorthEast Airlines FCF
TOPIC 12 Drill Problems
Use the following information to answer questions 1-6
Your friends company, Collins LLC, is Provos newest snow mobile rental shop. Collins is
considering investing in 50 new snowmobiles for the upcoming winter season. If she goes
Chapter 13 Problems: Firm Valuation
1. Define the replacement cost method for valuing a firm.
2. Lurkbook LLC has estimated its free cash flows to be $61.25 million in each of the next three
years and the final terminal value to be $98.65 million in the f
TOPIC 10 Drill Problems
1. In the business world, leverage can best be described as:
A) An increase in a firms variable costs (relative to fixed costs) to improve financial performance
B) the magnification of operating or financial results (whether positi
Chapter 5 Practice Problems
1. Bekki wants to travel to Thailand in 15 years. Today a plane ticket cost $750 and the
average annual inflation rate is 3.22%. How much should Bekki expect to pay for her
plane ticket in 15 years?
2. This past summer Samantha
Chapter 6: Bond Valuation
1. What is the YTM of a $1,000 par value bond with an 8% coupon rate, semi-annual coupon
payments, and 10 years to maturity if the bond currently sells for $950?
2. A bond is sold at $1,050.50 which has a face value of $1,000 and
1. What is the sustainable growth rate if a firm has a net margin of 12%, a total asset turnover of 1.5,
a debt-to-equity ratio of 2 and a retention ratio of 55%?
2. XYZ Company has the following this year:
Total Assets= $18 million
Chapter 7 Problems: Stock Valuation
1. Which type of stock gives the owner the right to vote?
2. Which type of stock can hold dividends in arrears?
3. A preferred stock pays a dividend of $3.48 in perpetuity. If the return required by shareholders
Personal Financial Plan
Business Mgt 200
Where are you in your life now? Describe your current situation temporally,
your concerns and worries. Be specific and complete. Here is your chance to
verbalize exactly where
IV. Credit Management
Personal Financial Plan
Describe in detail your borrowing history and what credit you currently have or
have available to you. Also, address your feelings about credit cards.
Ever since returning
V. Housing Decision
Personal Financial Plan
Bus M 200
What is your current housing situation ?
My current housing situation is living in a house with five of my good friends. We live just
south of campus and it has been a blast.
7th February 2017
Picking a Financial Institution/Cash Management Product
The first step in picking a financial institution is thinking and ponder on the three Cs. Its
important to know what they are and how th
Budget & Debt Reduction
Personal Financial Plan (Smtih Family)
Fin 200 Winter 2017
Begin by discussing your current debt situation. Refer to the Debt Elimination
spreadsheet you completed and summarize your findings.
If you are going to receive $70,000 for 20 years starting 5 years from now, what is the present
value of the cash flows discounted at 12%?
I = 12
PMT = 70,000
N = 20
PV(5) = 522,861.05
I = 12
FV = 522,861.05
PV(0) = 296,685.40
03 Ratio Analysis
3.1 Why Do Ratio Analysis
1. They standardize financial data, making it comparable across firms
a. While one company may have a larger amount of debt than another, when compared to
its assets the ratio of debt to assets may be smaller. T
Chapter 06 Bond Valuationsar
6.1 Why should I care about bonds?
1. The bond market is the most important source of financing in the nation
a. Corporations raise money directly from investors
2. Bonds play a role in the majority of savers personal investme
1.1 The Sub-Specialties within Finance
1. Corporate Finance
a. Also known as managerial finance, financial management, and business finance.
b. Primary goal is to maximize shareholder wealth
c. The finance manager uses a capital budgeting analys
Chapter 04 Financial Forecasting
4.1 Why We Do Financial Forecasting
1. The question that forecasting answers is: Given our expectations for future growth (in sales, in
asset base, etc.), how much financing will we need in the next one, five, or ten years
The Time Value of Money
5.1 The Time Value of Money
1. Would you rather have a dollar now or in the future
a. Risk, Opportunity, and Inflation make a dollar worth more NOW
b. To figure out how much future money is worth now we use a PRESENT VALUE FUNCTION
Practice Multiple-Choice Questions for
Money and Banking
Why Study Money, Banking, and Financial Markets: Chapter 1
Money appears to have a major influence on
b. the business cycle.
c. interest rates.
*d. each of the above.
Appendix A: Example of the Investment Portfolio
Summary of Observations from Investment Portfolios
Prepared by: Richard P. White
On April 11, 1997, I purchased $5,000,000 of U. S. Treasury bills, notes, and bonds. The
maturity of t
Understanding Foreign Exchange
1) FX Online Platform
1) Able to read and understand
the rate sheet
2) How to read Exchange Rate
2) Know the Process
3) Calculating the Exchange Rates?
Final Exam Stub Material. Use the Exam 1 and Exam 2 reviews for that material.
The DuPont Formula
Break down ROE and show the drivers
Measures of FCF
Go over FCFF and FCFE.
Explain intuition on when to use which one and what they a
A 1-year long forward contract on a non-dividend paying stock is entered into when the
stock price is $40 and the risk-free rate of interest is 10% per annum with continuous
(a) What are the forward price and the initial value of the