FINA2360
Ch 3 Practice Problems #1 and Solutions
Problem #1
a) What is the current ratio for 2009?
Current ratio = CA/CL = 7205 / 3550 = 2.03
b) What is the equity multiplier for 2009?
EM = Total Assets / Total Equity = 23,925 / 15,775 = 1.52
1
c) What is
FINA2360 Business Finance I
DECLARATION COVER SHEET FOR ASSIGNMENTS
NAME:
STUDENT NUMBER:
SECTION:
PROFESSOR:
ASSIGNMENT NUMBER:
Willis
#4
University students are expected to have a reasonable measure of self-discipline and maturity. While the Universitys
Finance 2360
Midterm Exam
Winter 2015
Student Name:
Student Number:
Section:
Total Time Allowed: 2 1/2 hours
Instructions:
Please read the questions carefully.
Show all necessary steps and related formulas for math problems. Correct final answers without
FINA2360.2F
Quiz #5
Name:_SOLUTIONS_
March 31, 2015
Student #_
1. The length of time required for an investment's discounted cash flows to equal its initial cost is the:
A. Net present value.
B. Internal rate of return.
C. Payback period.
D. Discounted pa
F
Quiz #4
March 24, 2015
FINA2360.2
Name:_SOLUTIONS_
Student #_
1. A stock's next expected dividend divided by the current stock price is the:
A. Current yield.
B. Total yield.
C. Dividend yield.
D. Capital gains yield.
E. Earnings yield.
2. Equity withou
FINA2360.2F
Quiz #1
Name:_SOLUTIONS_
Jan 22, 2015
Student #_
1. Which of the following statements about the current ratio is accurate?
A. Use of book values in calculation of this ratio is unacceptable because the market values
of these assets and liabili
FIN2360
Capital Budgeting Practice Problems #4
1. The Angell company is evaluating the proposed acquisition of a new milling machine. The
machines base price is $625,000 and it would cost another $25,000 to modify it for special use by
the firm. The produ
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FINA2360 Business Finance I
DECLARATION COVER SHEET FOR ASSIGNMENTS
NAME:
STUDENT NUMBER:
SECTION:
PROFESSOR:
ASSIGNMENT NUMBER:
University students are expected to have a reasonable measure of self-discipline and maturity. While
the Universitys teaching
FINANCE, INFORMATION SYSTEMS, & MANAGEMENT SCIENCE
FINANCE 2360, Winter 2015, ASSIGNMENT #2 - SOLUTIONS
DUE MONDAY, February 23, 2015 AT 12:00 noon.
Total Marks: 100 Marks
Note: For math problems, please show all of your work in your solutions.
Correct an
FINA2360 Business Finance I
DECLARATION COVER SHEET FOR ASSIGNMENTS
NAME:
STUDENT NUMBER:
SECTION:
PROFESSOR:
Willis
ASSIGNMENT NUMBER: 2
University students are expected to have a reasonable measure of self-discipline and maturity. While the
Universitys
Husky Mfg. Ltd.
Husky Mfg. Ltd.
Statement of Financial Position
as at December 31
Statement of Comprehensive Income ($000)
for the year ending December 31, 2012
2012
2011
($000)
($000)
Assets
Current Assets
Cash
Marketable Securities
Accounts Receivable
I
FINANCE, INFORMATION SYSTEMS, & MANAGEMENT SCIENCE
FINANCE 2360, Winter 2015, ASSIGNMENT #1
DUE FRIDAY, January 30, 2015 AT 12:00 noon.
Total Marks: 100 Marks
Note: For math problems, please show all of your work in your
solutions. Correct answers without
Exam # Section
145
E
138
F
52
E
96
F
183
F
15
F
167
E
88
F
176
E
62
E
75
F
90
F
281
F
95
E
67
E
231
F
26
E
32
F
151
F
187
F
9
E
233
F
112
E
160
F
20
E
54
F
253
E
87
F
47
F
140
E
135
E
51
F
212
E
45
F
272
E
107
E
254
E
42
E
121
E
226
E
143
E
238
F
220
E
21
FIN2360
Practice Problems #4
SOLUTIONS
Problem 1
The Angell company is evaluating the proposed acquisition of a new milling machine. The machines base
price is $625,000 and it would cost another $25,000 to modify it for special use by the firm. The
produc
Stock Valuation Practice Problems #4
Problem 1
A preferred share has a par value of $60 and pays a 5% dividend. If the market interest
rates are 6%, what is the market price of these shares?
P0
D
r
3
50.00
.06
If shares are trading at $70, is this a good
Time Value of Money
PRACTICE PROBLEMS #2 - SOLUTIONS
Consider the following cash flows and interest rates:
1.
Period
1
2
3
4
a)
Interest Rate
5%
6%
7%
7%
Cash Flow
5,000
1,000
1,000
1,000
What is the present value of each of the cash flows if the cash flo
FINA2360
Time Value of Money Practice Problems #3
1) The Reno family plans to buy a new house three years from now
for $200,000. Theyll take out a traditional 25-year mortgage at
the time of purchase. Mortgage lenders generally base the amount
theyll lend
Solutions TVM Practice Problems #1
Example 1: John Doe invests $1,000 today at 5% annual simple interest. How much will
he have after three years?
0
1
2
3
$1,000
$1,050
$1,100
$1,150
5%
John only earns interest on the original principal, or present value
1.
FIN2360
TIME VALUE OF MONEY
PRACTICE PROBLEMS #2
Consider the following cash flows and interest rates:
Period
1
2
3
4
Interest Rate
5%
6%
7%
7%
Cash Flow
5,000
1,000
1,000
1,000
a) What is the present value of each of the cash flows if the cash flows o
Time Value of Money Practice Problems #1
Example 1: John Doe invests $1,000 today at 5% annual simple interest. How much will
he have after three years?
Example 2: Jane Doe invests $1,000 today at 5% annual compound interest. How much
will she have after
FIN2360
SOLUTION TO TIME VALUE OF MONEY PRACTICE PROBLEMS #5
#1) The future value of the loan (the amount to be repaid) is $2,500. The amount that can
be borrowed is the present value amount, calculated as:
If the interest rate is 8 percent (compounded mo
FIN2360
TIME VALUE OF MONEY
PRACTICE PROBLEMS #5
#1) David has been awarded a scholarship that will pay $2,500 one year from now. However, he really needs
the money today, and has decided to take out a loan. If the interest rate is 8 percent (compounded m
PRACTICE PROBLEMS #3 & SOLUTIONS Stock Valuation Ch 8
#1) Fill in the missing information in the following table:
Preferred Shares in Canada
Par
Required
Dividend
Dividends
Company
Price
value
return
rate
paid per share
A
$100
8%
5%
$5.00
B
$60
$50
3%
C
$
FIN 2360 Additional Time Value Problems #4 - Solutions
1) Since he is making weekly deposits, we need to determine his weekly payment:
C = (2.25 + 11.00) x7 = $92.75 per week
APR
EPR 1
m
m
f
1=
.05
1
52
52
52
1 .000961538
t = 52x 4 = 208 payments
FINA2360 Additional Time Value of Money Problems #4
1. Tim drinks one cup of cappuccino and smokes one package of
cigarettes every day. His new years resolution is to quit both habits. If
a cup of cappuccino costs $2.25 and a package of cigarettes costs
$
FINA2360 WInter 2015
Practice Problems #2 Stock Valuation
1) Shirley's Cool Treats is expecting their ice cream sales to decline due to
the increased interest in healthy eating. Thus, the company has announced
that they will be reducing their annual divid
Finance 2360
Midterm Exam - SOLUTIONS
Winter 2014
Student Name:
Student Number:
Section:
Professor:
Total Time Allowed: 2 hours
Instructions:
Please read the questions carefully!
Show your methodology
Final answers carry near zero marks.
State any assumpt
Chapter 9
Net Present Value and Other
Investment Criteria
1
Capital Budgeting Process
Capital budgeting refers to the process used to
evaluate a firms long term investment opportunites:
1.
2.
3.
4.
Identifying investment alternatives
Evaluating those alte