Ryerson University Chang School
CFIN300, Fall 2015 (Currie) Final Exam Preview
Location: TRS1-147 Saturday, Dec. 12th.
Length: 3 hours begins @ 9:00 a.m.
Format: 50 Multiple Choice questions.
Topics: All course outline material is fair game, i.e. what we
Chapter 4
What Is Financial Planning?
Components of the Plan
Percentage of Sales Approach
External Financing and Growth
1
Basic Elements of Financial Planning
Investment in new assets capital budgeting decisions
How much are you going to invest and h
Chapter 10
Making capital investment decisions
Relevant Cash Flows 10.1
In order to implement our capital budgeting tools
like NPV and IRR, we need a cash flow stream.
The cash flows that should be included in a
capital budgeting analysis are those that
Chapter 4 Long term financial
planning and corporate growth
By the end of today, we will have covered
the material for Lab 1 and Lab 2 in Lyryx
2-1
Long-term financial planning and
corporate growth
What is it and why do we do it?
Making financial state
Continue with chapter 6
Section 6.3: Rates
Section 6.4: Loan types and loan
amortizations
4-1
Interest rates
To date, Ive supplied interest rates without elaborating on the
basis or the frequency of the compounding.
Weve been assuming that the rate i
Time Value of Money
Introduction to the time value of money
Chapter 5 (All sections)
Future Value, Present Value, Interest rates
and number of periods
Chapter 6 (Sections 6.1 and 6.2)
Annuities and perpetuities
Remainder of chapter will be covered n
FIN300 Managerial Finance
Welcome!
Instructor: Edward H. Blinder
(D.B.A./ABD, M.B.A., M.A.,M.Sc.,M.Res.)
1-1
Goals of the course
First course in finance
Introduction to the major concepts
Mathematical analysis regarding MONEY
Addresses questions ma
Chapter 13
Return, risk and the security market line
12-1
Expected Returns 13.1
Given a list of historical returns for an investment, the
return and standard deviation can be calculated as per
chapter 12.
The next step is to calculate the expected futur
Chapter 12
Lessons from capital market history
12-1
Defining Return
Holding Period Return is also known as Total Dollar
Return or Percentage Total Return or just return
P0 and P1 are the price at start and end of period and
D is the Cash flow received d
BONDS
Chapter 7
7-1
What are bonds? 7.1
A bond is an interest-only loan.
A firm or a government issues a bond when they
want to borrow money.
They are called the bond-issuing firm or borrower or
debtors.
Investors who agree to lend the money to the
fi
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Lab 10 (Question 4)
Name: lily ngor
Date: 2017-04-09 21:05
Question 4 [12 points]
Your solution to the question was:
Use the data in the table below for the following questions.
Note: Enter your average return and standard deviation
Chapter 10
Capital Budgeting
Relevant Cash Flows
Pro Forma Statements and Cash Flows
Capital Cost Allowance (CCA)
Determine Operational Cash Flows
A Comprehensive Example
Omit Section 10.7
1
Capital Cost Allowance
CCA is _depreciation_ for tax purposes.
CHAPTER1
INTRODUCTIONTOCORPORATEFINANCE
Learning Objectives
LO1
LO2
LO3
LO4
LO5
The basic types of financial management decisions and the role of the financial manager.
The financial implications of the different forms of business organization.
The goal o
FIN300 Managerial Finance I
Ryerson University
Fall 2014
Dr. Yi Feng
Todays Agenda
Motivation
A Key Concept in Finance
My Message
To Create a Learning Environment
Course Outline
Chapter 1
Chapter 2
2
Motivation
What is Finance?
Mathematics + $ = Financ
Initial Cost of New Equipment
Expected Salvage of New Equipment
Incremental Revenues
Incremental Expenses
Starting NWC
Subsequent NWC (% of sales)
Tax Rate
CCA Rate
Discount Rate
Number of periods
Part 1: OCF = (S-C)x(1-t)+Dxt
Part 1a: (S-C)x(1-t)
Year
In
Recap of Last Class
Bond price = PV(coupons) + PV (face value)
C
C
C
F
P
2
t
(1 r ) (1 r )
(1 r ) (1 r ) t
The coupon rate is not the interest rate.
As time goes by, interest rate may change in the
market, but coupon rate does not change.
There is a
Chapter 5 & 6
Introduction
Future Values and Compounding
Present Values and Discounting
Multiple Cash Flows
Annuities and Perpetuities
1
Introduction
Example
Borrow $100 today, return $100 in 10 years Yes / no?
$148 in 10 years, $219 in 20 years, $3
Example
Sorrel Labs
Sorrel was operating at full capacity last year and had sales of $7.5 million. Sorrels
marketing department is forecasting a 20% sales increase for the coming year. Further,
the firm has had a net profit margin of 5% and a 60% payout r
Recap of Last Class
FV PV (1 r )t
(1 r )t 1
FV C
r
1
1 (1 r )t
PV C
r
1
Exercise
Question
Your 40 year aunt wants to start saving for her retirement. She
expects to retire at 65. She thinks that she will have saved
$500,000 by the time she retires
Chapter 9
Net Present Value (NPV) Dominant Criteria
Other Investment Criteria
Internal Rate of Return (IRR)
Payback Rule
Average Accounting Return (AAR)
Profitability Index (PI)
Practice of Capital Budgeting
1
Net Present Value
Capital Budgeting Decision
Chapter 7
Bond Definitions
Bond Valuation
Bond Characteristics
Inflation and Interest Rates
Determinants of Bond Yields
1
Bond Definitions
Definitions
Governments and corporations borrow money for the
long term by issuing securities called bonds.
Bo
Recap of Cash Flow
CF Assets= CF Creditors + CF Shareholders
CF Assets = OCF - Net capital spending - Additions to NWC
OCF = Net Income + Depn + Interest Paid
Net capital spending =
Net fixed assets End Net fixed assets Beg + Depn
Additions to NWC =
Chapter 13 (part 2)
Thinking About Risk
Measuring Market Risk
CAPM and SML
Capital Budgeting
Final Exam Information
Selected Old Final Exam Questions
1
Thinking About Risk
Message 1:
Some risks look big and dangerous but are really
diversifiable.
If a
Question 1 [10 points]
Choose the term that best matches each of the following descriptions:
Marking:
a) Capital
Financial markets where long-term debt and equity securities are bought and
markets
sold.
b) Capital budgeting Creation of new securities or f
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Lab 9 (Question 2)
Name: Sanel Ahmic
Date: 2017-04-02 22:43
Question 2 [4 points]
Your solution to the question was:
A new electronic process monitor costs $895,000. This cost could be depreciated at 30 percent
per year (Class 10).
Final Exam Review
Class 1
Statement of financial position is a snapshot
Statement of comprehensive income is a period of time
Cash flow
Cash flow from assets = operating cash flow net capital spending addition to net working capital
CF to shareholders
CF
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Lab 8 (Question 3)
Name: Sanel Ahmic
Date: 2017-03-26 16:07
Question 3 [6 points]
Your solution to the question was:
An investment project costs $7,000 and has annual cash inflows of $1,500 for 7 years.
Note: Please round your answe
A note on Depreciation.
I hope everyone had a great weekend. Since a couple of depreciation questions were
brought up as we were going through the statement of cash flows, I thought it would be best
to put together a quick note to help further explai
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Lab 11 (Question 2)
Name: Sanel Ahmic
Date: 2017-04-09 22:37
Question 2 [4 points]
Your solution to the question was:
You have $9,000 to invest in a stock portfolio. Your choices are Stock X with an expected return
of 14 percent and
Earnings per common share of Allarco Inc. for the current year are expected to be $3 and grow 8
percent per year over the next 3 years. At the end of 4 years, earnings growth rate is expected to
fall to 7 percent and continue at that rate for the foreseea
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Lab 10 (Question 2)
Name: Sanel Ahmic
Date: 2017-04-09 18:18
Question 2 [8 points]
Your solution to the question was:
You bought one of Velor Inc.'s 13 percent coupon bonds one year ago for $1,000. These bonds
make annual payments a