EFN406: MANAGERIAL FINANCE
2014, 2
Assignment: Part A, Financial Mathematics and Security Valuation
General Information
a) Marks: 10 ten questions each worth one mark. You must have the correct answer and a
correct explanation/working to gain the marks al

CAPM and WACC Workshops
QUESTION 1
The SD of assets A and B are 8% (.08) and 12% (.12) respectively. A portfolio is constructed consisting
of 40% in Asset A and 60% in Asset B. Calculate the portfolio SD if the correlation is;
(a)
(b)
(c)
(d)
1
0.4
0
-1
S

Cost of Asset: 100,000
Life: five years for tax purposes
Salvage Value: 20,000
Depreciation Rate (Prime Cost/Straight line) SLR = 1 / life = 1/5 = 20% (20% of Cos
Diminishing Value/Reducing Value) Rate DVR = SLR x 2 = 20% x 2 = 40% (40% of th
book value f

Final Exam Notice
Hello Everyone the EFN406 Managerial Finance Final Exam is fast approaching.
As such, now is an appropriate time to remind you about the details of the exam and
highlight resources that are available to help you prepare for the exam.
Exa

1
Module Five and Six
15Equation Section 5Modules 5 and 6 Capital
Budgeting
Self-Study Questions for Module Five
Question One
0
(2,500)
(2,500)
Project 1
Project 2
1
1,000
200
2
800
400
3
600
600
4
1000
800
5
6
1,000
1,200
PolyCorp is faced with a choice

Textbook Questions and Problems Module 05and 06
These questions and problems are optional. They are not part of the formal assessment for the
unit. The solutions are available below. You may have covered some of these in your tutorial.
These are solution

Criteria
7
Problem solving - Questions Selects techniques that meet
all context requirements
6
Selects techniques matched to
the key issues
Technical skills - Questions
Consistently performs complex Carries out a range of complex
techniques correctly
tech

EFN406 Managerial Finance Tutorial 08 2012
Tutorial 08 Questions
1.
2.
BF page 476, Questions 4, 6 and 9
BF page 477-478, Problems 1, 3, 5 and 6 (for problem 6 assume g
=5% (it is not given)
(Assume proportion of tax collected that is claimed by sharehold

EFN406 Managerial Finance
Topic 9
Futures and Forwards
Options and Warrants
Forwards and Futures
Reading Ch 17
Study 17.1 to 17.5
Read Lightly 17.6 and 17.11
Learning Objectives
Know the difference between a forward and a future.
Be able to gather informa

PART A: FORWARDS AND FUTURES
Forward Contract
This transaction is called a forward contract if it is performed privately between the two parties. A forward
contract is a contract made today to be performed at some set time in the future at a set price for

EFB210 Finance Workshop CB3 2013 3
1.
Polycorp Limited Steel Division is considering a proposal to purchase a new machine
to manufacture a new product for a potential three year contract. The new machine will
cost $1 million. The machine has an estimated

EFN406: MANAGERIAL FINANCE
2014, 3
Assignment: Part A, Financial Mathematics and Security Valuation
General Information
a) Marks: 10 ten questions each worth one mark. You must have the correct answer and a correct
explanation/working to gain the marks al

EFN406: MANAGERIAL FINANCE
Assignment: Part B, Capital Budgeting
Solution
2015 1
_
Answer the two problems below (P1 and P2). Five marks each. Part marks will be allocated,
but if you have the incorrect answer then you cannot expect to get more than half

EFN406: MANAGERIAL FINANCE
2016, 1
Outline
You should solve the following ten questions showing your full workings and explanations in brief form.
Each question is worth one mark. You must have the correct answer and show your working and correct
explanat

EFN406 MANAGERIAL FINANCE
PRACTICE FINAL EXAMINATION
WORKING
2 Hours
PERUSAL
10 Minutes
WEIGHTING
60%
MARKS
60
Answer all 6 questions
All questions worth 10 marks
1
QUESTION 1
(a) The concept of diversification is flawed, because what you gain on one shar

Example 8.4
What is the after tax weighted average cost of capital given the following information:
Source of Funds
Bank Overdraft (b/t)
Bills (b/t)
Debentures (b/t)
Preference (a/t)
Ordinary (a/t)
tc
Cost %
Market Value $
8
1000000
7
1000000
9
4000000
8

EFN406 MANAGERIAL FINANCE
PRACTICE FINAL EXAMINATION
WORKING 2 Hours
PERUSAL 10 Minutes
WEIGHTING
60%
MARKS 60
Answer all 6 questions
All questions worth 10 marks
QUESTION 1 (a)
The concept of diversification is flawed,
because what you gain on one share

Textbook Questions and Problems Module 10
These questions and problems are optional. They are not part of the formal assessment for the
unit. A link to the solutions is available on the unit Blackboard site. You may have covered
some of these in your tuto

Textbook Questions and Problems Module 08
These questions and problems are optional. They are not part of the formal assessment for the
unit. A link to the solutions is available on the unit Blackboard site. You may have covered
some of these in your tuto

WORKSHOP IN CAPITAL BUDGETING TWO
QUESTION 1 (15 to 20 minutes)
A new photocopier costs $16 000. This cost will be depreciated prime cost to zero over 5 years. The new photocopier is
expected to be worth $3 000 in 5 years time. The new photocopier would s

Workshop in Capital Budgeting One
QUESTION ONE (20 -25 minutes)
PolyCorp is considering an investment in new plant of $3 million. The project will be financed with a
loan of $2,000,000 which will be repaid over the next five years in equal annual end of y

EFN406 Managerial Finance
Module 11
Introduction to International Finance
Reading
Chapter 20 of PBEHP
Study Sections 20.1, 20.2, 20.3, 20.4, 20.6, 20.7.
Concentrate on the topics listed on the next slide and covered in the
notes, slides, tutorials.
Se

Textbook Questions and Problems Module 11(with Solutions)
These questions and problems are optional. They are not part of the formal assessment for the
unit. Solutions provided. You may have covered some of these in your tutorial.
PBEHP
Chapter 20, Self T

Module Nine
1
Module 9 A: Forwards and Futures
Self-Study Questions: Module 9A
Question 1
Explain the following terms:
(a)
(b)
(c)
(d)
(e)
(f)
a futures contract
the Sydney Futures Exchange
an initial deposit
marking to market of a futures contract
margin

E(Ri) = Rf + i[E(Rm) - Rf]
Where
E(Ri)
Rf
E(Rm)
i
= the expected or required return on any asset i
= riskfree rate of return
= Expected return on the market portfolio
= Beta or systematic risk of asset i
WACC
D
E
k d 1 t c
ke
DE
DE
Where:
D
= market val

The basic Black-Scholes model is presented below:
c = S . N ( d 1 ) - X . e- R f T . N ( d 2 )
S
ln + ( R f + 12 2 ) T
X
d1 =
T
d 2 = d1 -
T
Where:
c
S
X
Rf
T
=
=
=
=
=
N(d)
ln
e
=
=
=
the value/premium of the call option
the current share price
exercis