Variable
Initial capital expenditure
Expected sales next year
Expected sales in year 2
Marginal tax rate
Profit margin on sales
Depreciation
Value
$450,000.00
$2,450,000
$2,200,000.00
31%
40%
0
Increased Sales
Profit Margin on sales
Net operating Profit (
Independent Variable: An experiment usually has three kinds of variables:independent, dependent, and
controlled. Theindependent variable is the one that is changed by the scientist. To ensure a fair test, a good
experiment has only one independent variabl
HW 11 Chapter 14
P14-1
(Defining capital structure weights)Templeton Extended Care Facilities, Inc. is considering the
acquisition of a chain of cemeteries for $390 million. Since the primary asset of this business is
real estate, Templeton's management h
Chapter 1
1.1
There are three basic questions that are addressed by the study of finance. They are
How can the firm best manage its cash flows as they arise in its day-to-day
operations (working capital management decisions)?
How should the firm raise mon
Study Plan Chapter 7 Review
Rate of Return=
Cash Return
Ending Price+ DividendsBeginning Price
=
Beginning Price
Beginning Price
P 7-1
(Related to Checkpoint 7.1)(Calculating rates of return)On December 17, 2007, the common
stock of Google Inc. (GOOG) was
HW 8 CH 10
Q1
P10-10
(Measuring growth)Green Gadgets Inc. is trying to decide whether to cut its expected dividend
for next year from $10 per share to $7 per share in order to have more money to invest in new
projects. If it does not cut the dividend, Gre
HW 9 Chapter 11
P11-9
(Related to Checkpoint 11.4)(IRR calculation)Determine the internal rate of return on the
following project: An initial outlay of $10,500 resulting in a cash inflow of $1,800 at the end of year 1,
$5,200 at the end of year 2, and $7,
Portfolio Expected
Return
ERR
Electric Gene
0.4
Buckstar
0.6
ERR
Std Dev
0.16
0.09
0.064
0.054
0.118
Portfolio X Portfolio Y Portfolio Z
9.50%
8.80%
9.50%
4.90%
5.50%
5.50%
Beta of PortfoInvestment % Value
Beta
Stock A
$2,000
0.2
1.5
Stock B
$5,000
0.5
1.
Variable
Initial capital expenditure
Investment in NWC inventory
Intial cash outlay
Life of the new production machine
Salvage value
Depreciation expense
Units sold
Sales price
Variable cost of product
Profit on product
Total Unit profit per year
Fixed Co
Variable
Initial capital expenditure
Investment in NWC inventory
Intial cash outlay
Life of the new production machine
Salvage value
Depreciation expense
Units sold
Sales price
Variable cost of product
Profit on product
Total Unit profit per year
Fixed Co
Common Stock A
Common Stock B
Probability
Return Probability
Return
0.2 10%
0.15
-7%
0.6 16%
0.35
7%
0.2 21%
0.35
15%
0.15
20%
A
Probability
Return
0.2 x
10% =
0.02
0.35 x
16% =
0.056
0.2 x
21% =
0.042
x
=
0
11.80%
Investment Standard Deviation
4.87%
B
Pr
Chapter 8 Homework 5
You are considering buying some stock in Continental Grain. Which of the following is an example of
nondiversifiable risk?
Risk resulting from a general decline in the stock market
You are considering investing in a portfolio consisti
Ver A
A
A
A
C
A
A
C
A
C
D
C
B
C
A
B
C
C
B
A
B
A
A
D
A
D
D
C
C
D
D
A
A
Ver D
A
A
A
C
C
C
A
C
C
D
C
A
D
B
A
A
C
D
D
A
C
A
B
D
A
D
B
D
D
B
A
A
Ver C
D
B
A
C
D
C
A
B
D
A
A
B
A
D
D
B
A
D
B
A
C
D
D
C
A
D
A
D
A
C
A
A
Ver B
B
C
D
A
C
A
C
B
B
D
D
A
C
B
C
B
B
A
D
D
CH 7 Homework
1.
Which of the following best measures an assets risk?
A: The standard deviation
2.
Even though an investor expects a positive rate of return it is possible that the actual return will be
negative.
A: True
3.
Which of the following sequence
HW 7 Chapter 9
P9-3 Q1
(Related to Checkpoint 9.3) (Bond valuation)Calculate the value of a bond that matures in
12 years and has a $ 1,000 par value. The annual coupon interest rate is 15 percent and the
markets required yield to maturity on comparable -
Case 72
Cost of Equity
Estimated Dividend in 1997
4-Year Growth
Growth After 4 Years
Required Rate of Return
$0.20
20.00%
14.90%
16.00%
Years
Estimated Dividends
Estimated Stock Value
Total Estimated Cash
1997
$0.20
Estimated Stock Price Today
$
0.20 $
$2
Case 95
Question #11
Equipment Costs
Installation Costs
Depreciable Expense
Net Salvage Value - Old
Salvage Value - New
Annual Savings
Effective Tax Rate
Required Rate of Return
CHICAGO VALVE COMPANY
$285,000
$18,000
$303,000
$1,500
$15,000
$76,000
36%
12
Title:
Series ID:
Source:
Release:
Seasonal Adjustment:
Frequency:
Units:
Date Range:
Last Updated:
Notes:
Consumer Price Index for All Urban Consumers: All Items
CPIAUCSL
U.S. Department of Labor: Bureau of Labor Statistics
Consumer Price Index
Seasonall
Unit Sales
Unit Price
Unit Variable cost
Fixed Cost
Equipment Cost
Building Lease
Net Working Capital
Depreciable Expense
Equipment Salvage Value
Tax Rate
Required Rate of Return
Price Inflation
Variable Cost Inflation
20,000
$2,000.00
$1,225.00
$5,900,00
CD $ Amount
Annual Nominal Rate
Compounding Per Year
Maturity in Years
Annual
Future Value
Effective Annual Rate
Semi-Annual
Quarterly
Daily
Payments
# Pmts Per Year
# of Years
Annual Nom. Rate
Compounding Periods Per Year
Future Value
Effective Rate
Paym
Unit Sales
Unit Price
Unit Variable cost
Fixed Cost
Equipment Cost
Building Lease
Net Working Capital
Depreciable Expense
Equipment Salvage Value
Tax Rate
Required Rate of Return
Price Inflation
Variable Cost Inflation
20,000
$2,000.00
$1,225.00
$5,900,00