Fin 500 Online
Prof. Yi
Solution to Homework Set II
1.
2.
3.
4.
5.
6.
7.
Discount bond: Yield to maturity > Current yield > Coupon rate
Premium bond: Yield to maturity < Current yield < Coupon rate
8.
9.
10.
11.
12.
13.
14.
IRR = 7.03%
15.
Since projects
Fundamentals of Corporate Finance
by Ross, Westerfield, and Jordan, 10th edition
Solutions to Homework Set III
Chapter 10
2.
Sales due solely to the new product line are:
25,000($14,000) = $350,000,000
Increased sales of the motor home line occur because
Fundamentals of Corporate Finance
by Ross, Westerfield, and Jordan, 9th edition
Answers for Homework Set III
Chapter 10
2.
Sales due solely to the new product line are:
19,000($13,000) = $247,000,000
Increased sales of the motor home line occur because of
Fundamentals of Corporate Finance
by Ross, Westerfield, and Jordan, 8th edition
Answers for Homework Set III
Chapter 10
2. Sales due solely to the new product line are:
19,000($12,000) = $228,000,000
Increased sales of the motor home line occur because of
Fundamentals of Corporate Finance
by Ross, Westerfield, and Jordan, 10th edition
Chapter 2
2.
The income statement for the company is:
Income Statement
Sales
$734,000
Costs
315,000
Depreciation
48,000
EBIT
$371,000
Interest
35,000
EBT
$336,000
Taxes (35%)
Fundamentals of Corporate Finance
by Ross, Westerfield, and Jordan, 9th edition
Answers for Homework Set I
Chapter 2
2.
The income statement for the company is:
Income Statement
Sales
$586,000
Costs
247,000
Depreciation
43,000
EBIT
$296,000
Interest
32,00
Fin 500 Online
Prof. Yi
Solution to Homework Set I
1. The accounts on the balance sheet are generally carried at historical cost, not
market values. Although the book value of the current assets and the liabilities
may closely approximate market values, t
Fundamentals of Corporate Finance
by Ross, Westerfield, and Jordan, 8th edition
Answers for Homework Set I
Chapter 2
2. The income statement for the company is:
Income Statement
Sales $634,000
Costs 305,000
Depreciation 46,000
EBIT $283,000
Interest 29,00
Fin 303 Online
Prof. Yi
Homework Set III
The solutions to the questions below should be typed (Word or Excel file) and show all steps of
calculations. (No points will be given without the steps or work to the final answers)
Please submit your file in Mood
Fin 303 Online
Solution to Exercise of Time Value of Money
1. PV = (1,000)/(1.13)^5 = $542.76
2. Work with monthly periods and monthly interest rate:
FV = (1,500)*(1+(.09/12)^36) = $1,962.97
3. 5,000 = 2,000*(1+r)^10
r = (5,000/2,000)^(1/10) 1 = 9.60%
4.
Fin 500 Online
Prof. Yi
Homework Set I
The solutions to the questions below should be typed (Word or Excel file) and show all steps of
calculations. (No points will be given without the steps or work to the final answers)
Please submit your file in Moodle
Fin 500 Online
Prof. Yi
Homework Set II
The solutions to the questions below should be typed (Word or Excel file) and show all steps of
calculations. (No points will be given without the steps or work to the final answers)
Please submit your file in Moodl
Formulas
Financial Ratios
Current ratio = current assets / current liabilities
Quick ratio = (current assets - inventory) / current liabilities
Cash ratio = cash / current liabilities
Total debt ratio = (total assets - total equity) / total assets
Debt-to
Answers to Exercise in Financial Statements
Samuelson Company
1999 and 2000 Balance Sheet
Assets
1999
Current Assets
Cash & Equivalent
Accounts Receivable
Inventory
Total Current Assets
Liabilities
1999
2000
2000
Total Assets
10,500
54,400
42,700
107,600
Chapter 10: Capital Budgeting
Pro Forma Statements and Project cash flows
Pro forma financial statements: Financial statements projecting future years' operations.
[Example]
Constructing a Pro Forma Income Statement to estimate the cash flow for
each year