FI 4000 Fundamentals of Valuation
Formula Sheet for Exam 1
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Time Value of Money
Chapter 4
Returns One by One
Realized return is what you actually
made on the investment
In the previous example you realized a loss of
4.5% per year
Expected return is the rate of return you
expect to earn
Required return is the r
FI 4000
Chapter 6
Optimal Risky Portfolio with a Risk-Free Asset: Section 6.3
In section 6.2, we have discussed the optimal asset allocation problem between two risky
assets. In this section we discuss the asset allocation problem to include a risk free a
FI 4000
Chapter 6
Diversification and Portfolio Risk: Section 6.1
Portfolio
A portfolio is a collection of assets
An assets risk and return is important in how it affects the risk and return of the
portfolio.
The risk-return trade off for a portfolio is m
FI 4000
Capital Allocation Line
Asset Allocation across Risky and Risk-Free Portfolios: Section 5.5
In this section we discuss asset allocation between risk free asset and risky asset. That is
proportion of portfolio investment to place in risk-free money
FI 4000
Risk and Return
Rates of Return Section 5.1
Rates of Return: is defined as dollar earned over the investment period per dollar
invested.
Holding Period Return
The total holding-period return (HPR) of a share of stock depends on the increase (or
de
FI 4000
Class Notes
Time Value of Money
Review
I. Future Value and Present Value
Future Values
How much my investment worth in future?
FV = future value
PV = present value
r = period interest rate, expressed as a decimal
t = number of periods
Future value
Robinson College of Management
Georgia State University
FI 4000 Fundamentals of Valuation
CRN 81041, Section 005
MWF 10:00 am 11:45 am
Location: Aderhold Learning Center 213
Course Syllabus
Fall, 2015
Professor: Rasha Ashraf
Office: 1238 RCB
Email: rashra
Exercises
StatementofCashFlow
Prepare for a cash flow statement
Issued 30,000 shares of capital stock in exchange for $300,000 in cash.
Purchased equipment at a cost of $40,000. $10,000 cash was paid and a note payable was signed
for the balance owed.
Pur
Marketing
Organized as a public corporation and headquartered in Jacksonville, FL, Comfort Zone
(CZ) is a major distributor of heating, air conditioning, and refrigeration equipment,
parts, and supplies with 45 outlets (stores) in Florida, Georgia, Alaba
Exercises
StatementofCashFlow
Prepare for a cash flow statement
Issued 30,000 shares of capital stock in exchange for $300,000 in cash.
Purchased equipment at a cost of $40,000. $10,000 cash was paid and a note payable was signed
for the balance owed.
Pur
Exercises
Revenue Recognition
1
Completed Contract and Percentage-of-Completion Methods
At the beginning of 2011, the Harding Construction Company received a contract to build an office building for
$5 million. The project is estimated to take three years
Exercises
Revenue Recognition
1.
Completed Contract and Percentage-of-Completion Methods
At the beginning of 2011, the Harding Construction Company received a contract to build an office building for
$5 million. The project is estimated to take three year
ch00
1
Student:
36.
is a field of study devoted to understanding, explaining, and ultimately improving the attitudes
and behaviors of individuals and groups in organizations.
A. Organizational behavior
37. Which of the following takes the theories and pri
1. The bonds of Elbow Grease Dishwashing Company have received a rating of "D" by
Moody's. The "D" rating indicates _.
a. the bonds are investment grade
b. the bonds are junk bonds
c. the financial manager of Elbow Grease Dishwashing flunked his Finance c
FI4000 Time Value of Money Review Problems
1.
You plan to deposit $1,000 every month into an account paying 6%
compounded monthly for the next 5 years. How much will you accumulate
over this five year period?
1a.
What is the future value interest factor o
Nnamdi Nnadozie
Excel Report
3/10/16
PROBLEM 1
I used Google financial statement from the year 2014 to evaluate their intrinsic value. Using the FCFF
approach to evaluate their intrinsic value, I computed the firms value to be $666,686,006,939.26. I took
Quiz 10
FI 3300
Summer 2015
Name _
Circle the correct answer.
Use the following to answer 1-8.
Caspian Sea Drinks (CSD) is considering the introduction of a new diet drink, Caspian Seas One.
Your team has given you the following facts.
- $300,000 was spen
Quiz 9
FI 3300
Summer 2015
Name _
Circle the correct answer.
BoeBus Air is considering increasing production of the 525 Airliner at their South Carolina
assembly plant. You have been provided the following pieces of information.
The expansion will require
Quiz 8
FI 3300
Summer 2015
Name _
Circle the correct answer.
Use the following to answer 1-5.
Year
Cash Flow
0
-25,000
1
5,000
2
6,000
3
7,000
4
8,000
5
9,000
1. Assume a discount rate of 8%. What is the NPV of the project?
2. What is the IRR of the proje
Quiz 7
Summer 2015
Name_
1. Caspian Sea Drinks plans to issue preferred stock with a dividend of $3.00. If the
appropriate discount rate is 8%, then the stock should sell for $_.
a. 37.50
b. 38.10
c. 40.00
d. 42.40
2. The price of Caspian Seas preferred s
Quiz 6
FI3300
Summer 2015
Name_
Assume a par value of $1,000 for all bonds on this quiz.
1. Caspian Sea Drinks plans to issue a 15-year, semi-annual pay bond which has a
coupon rate of 8.00%. If the yield-to-maturity is 7.80%, then the price of the bond
w
Quiz 5
FI 3300
Summer 2015
Name _
Balance Sheet
Cash
Accounts receivable
Inventory
Total Current Assets
Net plant and equipment
Total Assets
Notes payable
Accounts payable to suppliers
Accruals
Total current liabilities
Long-term debt
Common stock ($2.00
Quiz 4
FI 3300
February 19, 2015
Name_
Prepare a multi-step income statement and use the following to answer 1-4.
Interest expense
Beginning inventory
Depreciation expense
Management salaries
Advertising expenditures
Ending inventory
Sales
Taxes
Lease pay
Quiz 3
FI 3300
February 5, 2015
Name _
Circle the correct answer.
1. You deposit $1,000 into an account each year for 10 years with the first deposit made
next year. Assuming an interest rate of 5%, the account will have a balance of $_ 10
years from toda
Quiz 2
FI 3300
June 15, 2015
Name _
Circle the correct answer.
1. A money machine that will pay $1,000 per year for 25 years is worth $_ today.
Assume a 5% interest rate and that the first payment is made one year from today.
a. 14,093.94
b. 14,500.25
c.
Quiz 1
FI 3300
Summer 2015
Name _
Please circle the correct answer.
1. An investor will be willing to pay $_ today for a money machine that will produce
$3,000 four years from today. Assume the appropriate interest rate is 9%.
a. 2,125.28
b. 2,255.31
c. 2
Exercises
Cash and Receivables
1 Harwell Company manufactures automobile tires. On July 15,2013, the company sold 1,000
tires to the Nixon Car Company for $50 each. The terms of the sale were 2/10, n/30. Harwell
uses the net method of accounting for cash