LANCASTER UNIVERSITY
Management School
Department of Accounting and Finance
AcF100: Introduction to Accounting and Finance
Business Environment Examination Style Questions
Week 7: To what extent and why does an audit add value to company reporting? What g
Capital Budgeting
Capital Budget A list of planned investment
projects.
10-1
10-1
Capital Budgeting:
The Decision Process
1. Stage 1: The Capital Budget
2. Stage 2: Project Authorization
Outlays required by law or company policy
Maintenance or cost reduct
AcF 214M
Principles of Finance
Efficient Markets Hypothesis (EMH) and
Behavioural Finance
The relationship among a securitys/firms future cash flows,
its cost of capital, and its value.
Asset Value
(e.g., NPV)
Valuation Model
Future
Cash Flows
Discount r
ACF-214 (Principles of Finance)
Coursework Test
03. Mar. 2016
Sample MCQs
1. The net present value (NPV) rule can be best stated as:
a. An investment should be accepted if, and only if, the NPV is exactly equal
to zero.
b. An investment should be rejected
PRINCIPLES OF FINANCE
Project Appraisal - III
INTERNAL RATE OF RETURN
1.The Internal Rate of Return is the
exacted rate of return of the project is
expected to achieve.
2. IRR is the discount rate which exactly
discounts future cash flows to a total
prese
GD GOENKA WORLD INSTITUTE
BACHELOR OF BUSINESS ADMINISTRATION &
BACHELOR OF ARTS IN BUSINESS ECONOMICS
COHORT 2013 2016
SEMESTER - V
Module: ACF302 CORPORATE FINANCE
Mid-term Test 1
Time: 45 minutes (plus 15 minutes reading time)
Instructions to Candidate
ACF214 Workshop (week 05)
ABC Ltd. has a capital structure of 20% Debt and 80% Equity. It pays 10% interest on its
debt.
Currently, common stock in the company is priced at Rs.100, and it should pay Rs. 5.0 per
share in dividends during the coming year.
T
Alpha
Alpha measures the difference between a fund's actual returns and its expected performance,
given its level of risk (as measured by beta). A positive alpha figure indicates the fund has
performed better than its beta would predict. In contrast, a ne
GD GOENKA WORLD INSTITUTE
BACHELOR OF BUSINESS ADMINISTRATION &
BACHELOR OF ARTS IN BUSINESS ECONOMICS
COHORT 2013 2016
SEMESTER - V
Module: ACF302 CORPORATE FINANCE
Mid-term Test 2
Time: 45 minutes (plus 15 minutes reading time)
Instructions to Candidate
Risk
Risk and
and
Return
Return
5-1
Defining
Defining Return
Return
Income received on an investment
plus any change in market price,
price
usually expressed as a percent of
the beginning market price of the
investment.
R=
5-2
Dt + (Pt - Pt-1 )
Pt-1
Retur
ACF214M Principles of Finance
Tutorial Questions 2015-2016
Alexey Akimov
Qiyu Zhang
Tutorial Questions Week 4
1. The following table shows the one-year return distribution of Startup Inc. Calculate the expected
return and standard deviation of the return.
Tutorial Solutions Week 3
1. You are a manager at Percolated Fiber, which is considering expanding its operations in
synthetic fiber manufacturing. Your boss comes into your office, drops a consultants
report on your desk, and complains, We owe these cons
Tutorial Solutions Week 9
1. Hong Kong has an unusual tax system. Dividends and capital gains are not taxable. The
Peng Corporation currently pays a quarterly dividend of HK$5 per share. It has 5 million
shares outstanding at a price of HK$267.
a. What wi
Tutorial Solutions Week 8
1. Markum Enterprises is considering permanently adding $100 million of debt to its capital
structure. Markums corporate tax rate is 35%.
a. Absent personal taxes, what is the value of the interest tax shield from the new debt?
b
Tutorial Solutions Week 7
1. You are an entrepreneur starting a biotechnology firm. If your research is successful, the
technology can be sold for 30 million. If your research is unsuccessful, it will be worth
nothing. To fund your research, you need to r
LANCASTER UNIVERSITY
Management School
Department of Accounting and Finance
AcF 215: Advanced Principles of Finance
Lent Term 2017
Problem Solving Workshop Week 2
Exercise 1
Consider the following lotteries
and three individuals: John, Oscar and Nicholas,
10/01/2017
1
2
Lecture outline
BOND VALUATION
BONDS
Valuation of
bonds
AcF 100
Lecture 11-12
Bonds price
changes
Bonds features
& types
Risk and rating
of bonds
Bonds markets
And quotes
Berk and DeMarzo Chapter 6
3
Bonds - Definitions
4
Bond certificate -
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1
2
Time value of money
TVM
TIME VALUE OF MONEY
AcF 100
Lecture 3-5
Single cash flow
Future value &
Compounding
Present value
& Discounting
Multiple cash flows
Finding
discount rate
Finding time
periods
Berk and DeMarzo Chapter 4
3
Time line of
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1
2
Recap
INVESTMENT
DECISIONS RULES
Time value of money
Future and Present values
Single and multiple cash flow scenarios
AcF 100
Lecture 8-10
Interest rates
Berk and DeMarzo Chapter 7
APR and EAR
Determinants
3
Investment decision crite
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1
2
Previously on AcF100
TVM
INTEREST RATES
Single cash flow
AcF 100
Lecture 6-7
Future value &
Compounding
Multiple cash flows
Present value
& Discounting
Finding
discount rate
Finding time
periods
Berk and DeMarzo Chapter 5
3
Previously on Ac
Department of Accounting and Finance
AcF 100, Lent term: Managerial Finance
Workshop Questions, Week 5
Investment Decision Rules
1. Create an example to illustrate why the internal rate of return can lead to faulty decisions
when deciding which one of two
Department of Accounting and Finance
AcF 100, Lent term: Managerial Finance
Workshop Questions, Week 3
Time Value of money and interest rates
1.
Should lending laws be changed to require lenders to report EARs instead
of APRs? Why or why not?
Yes, they sh
10/01/2017
1
2
Overview
INTRODUCTION TO
MANAGERIAL FINANCE
Administrative Issues
Areas of Finance
Defining Managerial Finance
Finance vs. Accounting
AcF 100 - Lent term
Lecture 1
Four Types of Firms
Ownership versus Control
Course Objectives
Core Te
Department of Accounting and Finance
AcF 100, Lent term: Managerial Finance
Workshop Questions, Week 2
Time Value of Money
1. For each of the following compute the missing value
Present Value
Years
Interest Rate
81550
17
12%
14
22%
PV = 886,073 / (1.22)14
Department of Accounting and Finance
AcF 100, Lent term: Managerial Finance
Workshop Questions, Week 5
Investment Decision Rules
1. Create an example to illustrate why the internal rate of return can lead to faulty decisions when
deciding which one of two
Department of Accounting and Finance
AcF 100, Lent term: Managerial Finance
Workshop Questions, Week 3
Time Value of money and interest rates
1.
Should lending laws be changed to require lenders to report EARs instead
of APRs? Why or why not?
2.
Prepare a
Department of Accounting and Finance
AcF 100, Lent term: Managerial Finance
Workshop Questions, Week 4
Interest rates and NPV
1. Suppose the term structure of interest rates is shown below:
Term
1 year
2 years
Rate (EAR%) 5.00%
4.80%
3 years
4.60%
5 years
Department of Accounting and Finance
AcF 100, Lent term: Managerial Finance
Workshop Questions, Week 4
Interest rates and NPV
1. Suppose the term structure of interest rates is shown below:
Term
1 year
2 years
Rate (EAR%) 5.00%
4.80%
3 years
4.60%
5 years