MGMT 130 Midterm Exam Winter Quarter 2010
Name: _
Section: _
Multiple Choice For each question below, circle the best answer. Each question is worth 2 points.
1) You have $500 to invest. You have two choices: Savings Account A which earns 8% compounded an
Chapter 2: Concept Questions 1, 5, 10; Problems 5, 8, 9, 10, 13, 20
Concept Questions:
1. Liquidity What does liquidity measure? Explain the trade-off a firm faces between high
liquidity and low liquidity levels.
Note: This exam tests on some material that was taught in 2011 but we did not cover
in 2013. The 2013 exam will not cover material that we did not discuss in class.
MGMT 130 Final Exam
Winter Quarter 2011
Name:_
Section: _
Short Answer
1. List three of th
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Chapter 4
Discounted Cash Flow
Prof. Ehud Peleg
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Lump Sum or Annuity Payout?
2
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Outline
Valuation:
The
The One-Period Case
Multi-period Case
Compounding
Repeated
Periods
Cash Flows
Loan Amortization
3
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The One-Period Case
If you were to invest $10,00
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Chapter 10
Risk and Return
Prof. Ehud Peleg
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Outline
Historical Asset Class Returns
Risk Statistics and Risk-Return Trade Off
Equity Risk Premium
Normal Distribution
2
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Historical Returns
A famous
set of studies dealing with rates of returns on
commo
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Chapter 11
Return and Risk: Portfolio Theory and CAPM
Prof. Ehud Peleg
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Outline
Expected Return, Variance, and Covariance
The Return and Risk for Portfolios
The Efficient Frontier
Diversification
Market Equilibrium
Capital Asset Pricing Model (CAPM)
2
Chapter 10: Sample Problems
1. Suppose you observe the following return on a stock over the past 5 years:
What is the arithmetic average return, and what are the variance and standard deviations of
returns?
Year
1
2
3
4
5
Returns
12%
10%
5%
-17%
8%
Soluti
Chapter 11: Sample Problems
1. You own a portfolio that is 25 percent invested in Stock X , 40 percent in Stock Y , and 35
percent in Stock Z . The expected returns on these three stocks are 11 percent, 17 percent, and
14 percent, respectively. What is th
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Chapter 13
Risk, Cost of Capital, and Valuation
Prof. Ehud Peleg
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Outline
Cost of Equity Capital
Weighted Average Cost of Capital (WACC)
Using CAPM to evaluate projects
Determinants of Beta
Estimation of Beta
Financial Leverage and Beta
2
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The Cost of
Factory site
Machinery and equipment
Year 5 machinery sale price
Tax Rate
Drone Price Year 1
Price increase
Quantity Sold Year 1
Growth rate of sales
Drone Cost Year 1
Cost decrease
Initial investment in inventory and cash
Net working capital as percent o
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Risk Analysis, Real Options, and Capital
Budgeting
Prof. Ehud Peleg
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Outline
Sensitivity Analysis
Scenario Analysis
Break-Even Analysis
Real
Options
2
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Sensitivity,
Analysis
Scenario,
and
Break-Even
Each
allows us to look behind the NPV
number to see
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Chapter 8
Interest Rates and Bond Valuation
Prof. Ehud Peleg
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Outline
Bonds and Bond Valuation
Yield To Maturity
Interest Rate Risk and Duration
Government and Corporate Bonds
Bond Yield Determinants
2
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Bonds and Bond Valuation
A bond is a legally bin
Chapter 9: Sample Problems
1. White Wedding Corporation will pay a $2.65 per share dividend next year. The company pledges
to increase its dividend by 4.75 percent per year, indefinitely. If you require a return of 11
percent on your investment, how much
Chapter 8: Sample Problems
1. Even though most corporate bonds in the United States make coupon payments
semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German
company issues a bond with a par value of 1,000, 19 years to
Chapter 7: Sample Problems
1. In each of the following cases, find the unknown variable. Ignore taxes.
Solution:
Accounting break-even means that Net Income is equal to zero. If NI=0 then:
(Revenue Variable Costs Fixed Costs + Depreciation)*(1-Tax Rate) =
Chapter 6: Sample Problems
1. Your firm is contemplating the purchase of a new $670,000 computer-based order entry system.
The system will be depreciated straight-line to zero over its five-year life. It will be worth $50,000
at the end of that time. You
University of California, Los Angeles
Anderson School of Management
Basic Managerial Finance
Syllabus
MGMT 130A
Winter 2017
Section 1: Tue-Thur, 11:00 12:15
Section 2: Tue-Thur, 12:30 1:45
Instructor: Ehud Peleg, email: [email protected]
Office
Chapter 13: Sample Problems
1. Shanken Corp. issued a 30-year, 6.2 percent semiannual bond 7 years ago. The bond currently
sells for 108 percent of its face value. The companys tax rate is 35 percent.
a. What is the pretax cost of debt?
b. What is the aft
1. You need a 30-year, fixed-rate mortgage to buy a new home for $250,000. Your mortgage bank
will lend you the money at a 5.3 percent APR compounded monthly for this 360-month loan.
However, you can only afford monthly payments of $950, so you offer to p
1. Consider a project that costs $75,000 today. The project has an inflow of $155,000 in one year
and an outflow of $65,000 in two years.
a. Prepare a table with the NPV of the project for discount rates between -50% and 50% by
increments of 10%?
b. How m
Question 9 In the most recent yearWholesome Foodsellers reported $7,000 in sales with a 20% prot margin. The rm has $17,000 in assets.
Answers-1" Next yearthe rm plans a 10% increase in sales. Assets and costs are proportional to sales. Debt and equity ar
Question 3
Answersaved
Poinlsout of
1.00
iFha
question
Critter corp. prepared the Following nancial statements forvear-end 2014.
Income
Statement
2014
Revenue $750
Expenses 562
Depreciation 93
Net Income 95
Dividends 75
Balance Sheets - End of Year
2014 2
Question 2 The 2013 balance sheet of Pizzeria Libretto showed long-term debt of $1.4 million. and the 2014 balance sheet showed long-term
Answersaued debt of $1.7 million. The 2014 income statement slwwed an interest expense of $1335 95.What was the rm's
Question 1
Answer saved
Poinisoutof
1.00
1 Flag
question
Carley, Inc. has sales of $427326, costs of $156072, depreciation expenses of $27414, interest expenses of $191.03. and a tax rate
of 35%. Suppose the company paid out $31315 in cash dividends. W'i'
Question 1'0 Given the following nancial ratios, what is the corn panys sustainablegromh rate?
Ansmrsmd Total asset to rmver = 1.5
:33 tm Prot margin = 696
17 Flag Equity multiplier = 1.5
question
Payout ratio = 35%
Select one:
If] ai
(j. moses
f: .1295
3
Question4 A oon'urmrrylI reported $185111 in sales. total assets of $2303, and a debt-equity ratio of 0.5. If its return on equity is 19%. what is
Ansmrsmd the rms net income?
Points outoi
1.00 Seiect one:
I? Flog IT] a. $12331
question (3| b. $3405
-T.-
Question 7 Uberville Drivers Inc. reported $750,000 in sales in the recent year, $650,000 in costs and $10,000 in interest The rm's tax rate is
msmrsmd 34%, and recent year's dividend payment was $34,400.
Points outof The companyr is planning to grow by 2
Question 3
Answer saved
Points out of
1.00
1" Flag
question
The Pelican Corporation provided the following information for 2014. in $ millions:
Proceeds from long-term borrowing
Proceeds from sale ofcommon stock
Net sales afxed assets
Purchases of invento
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Chapter 11
Return and Risk: Portfolio Theory and CAPM
Prof. Ehud Peleg
+
Outline
Expected Return, Variance, and Covariance
The Return and Risk for Portfolios
The Efficient Frontier
Diversification
Market Equilibrium
Capital Asset Pricing Model (CAPM)
11
Economics 101
Problem Set 8
1. (Expected Value and Variance Proofs)
Let X be a random variable taking the value xi with probability pi , for i = 1, . . . , n.
Let Y be a random variable taking the value yj with probability pj , for j = 1, . . . , n.
X and
Long term debt
$ 65,000,000.00
Preferred Stock
$ 4,000,000.00
Common Stock ($1 par value)
$ 15,000,000.00
Accumulated Retained Earnings
$ 135,000,000.00
Capital Surplus
$ 45,000,000.00
During the past year, Information Control issued 10 million shares of
1. Cheryl Colby, CFO of Charming Florist Ltd, has created the firms pro forma balance sheet for the
next year. Sales are projected to grow by 10% to $420 million. Current assets, fixed assets and
short term liabilities are 20%, 75% and 15% of sales, respe