Chapter 2 Case
Cash Flows and Financial Statements at Sunset Boards, Inc.
Sunset Boards is a small company that manufactures and sells surfboards in Malibu. Tad Marks, the
founder of the company, is in charge of the design and sale of the surfboards, but
Week 4. Chapter 8: 3, 4, 5, and 6.
3. Calculating Payback. Global Toys Inc., imposes a payback cutoff of three years for its
international investment projects. If the company has the following two projects available,
should it accept either of them?
Year
Mark Sexton and Todd Story, the owners of S&S Air, Inc., were impressed by the work Chris had
done on financial planning. Using Chriss analysis, and looking at the demand for light aircraft, they have
decided that their existing fabrication equipment is s
8. Calculating OCF. Hammett, Inc., has sales of $34,630, costs of $10,340, depreciation expense
of $2,520, and interest expense of $1,750. If the tax rate is 35 percent, what is the operating cash
flow, or OCF?
Income Statement
Sales
$34,630
Costs
-10,340
4. Portfolio Expected Return. You have $10,000 to invest in a stock portfolio. Your choices are Stock X with an
expected return of 14 percent and Stock Y with an expected return of 11 percent. If your goal is to create a
portfolio with an expected return
1.
How would you describe Sunset Boards cash flows for 2014? Write a brief description.
Based on his operating cash flows, Sunset Boards appears to be operating successfully. However,
when we drill down to look more closely at his payouts to creditors and
memo
S&S Air, Inc.
To:
Mark Sexton & Todd Story
From:
Christie Vaughan
CC:
Chris
Date:
20 November 2016
Re:
Mortgage payments for manufacturing facility
To summarize our findings, we begin with the 30-year traditional mortgage. Payments for that mortgage
Maureen Primosch
Week 6 Homework
Chapter 12
3. Calculating Cost of Equity. Stock in CDB Industries has a beta of .90. The market risk premium is 7
percent, and T-bills are currently yielding 3.5 percent. CDBs most recent dividend was $1.80 per share,
and
CHAPTER CASE
BULLOCK GOLD MINING
Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold mine in South Dakota. Dan
Dority, the companys geologist, has just finished his analysis of the mine site. He has estimated that the
mine would be pr
1. Construct a spreadsheet to calculate the payback period, internal rate of return, modified internal rate of return, and net present v
According to the cash flows, cumulative cash flows are easy to calculate.
Year
Cash Flows
0
($650,000,000)
1
$80,000,0
6. Bond Prices. App Store Co. issued 20-year bonds one year ago at a coupon rate
of 6.1 percent. The bonds make semiannual payments. If the YTM on these bonds is
5.3 percent, what is the current bond price?
Nper = 19*2 = 38 (indicates the number of time t
Chapter 4 (4, 8, 17, 18)
4. Calculate Interest Rates. Solve for the unknown interest rate in each of the following:
Present Value
Years
Interest Rates
Future Value
$ 715
$1,381/(1+0.09)^
905
9
7.59 %
$ 1,381
6
11.27%
1,718
15,000
21
11.29%
141,832
70,300
Week 6 Homework
3. Calculating Cost of Equity. Stock in CDB Industries has a beta of .90. The market risk premium is 7
percent, and T-bills are currently yielding 3.5 percent. CDBs most recent dividend was $1.80 per share, and
dividends are expected to gr
Maureen Primosch
Ch 8 Homework
Chapter 8
3. Global Toys Inc. imposes a payback cutoff of three years for its international investments projects. If
the company has the following two projects available, should it accept either of them?
Year
Cash Flow (A)
C
Maureen Primosch
Week 7 Homework
Chapter 17
6. Calculating Net Float. Each business day, on average, a company writes checks totaling $19,500 to
pay its suppliers. The usual clearing time for the checks is four days. Meanwhile, the company is
receiving pa
date
name
Finance
Professor
Course Project Part I
Introduction
The Course Project is an opportunity for you to apply concepts learned to a real-life simulation
experience. Throughout the Course Project, you will assume that you work as a financial analyst
NAME
DATE
Professor
Finance
Course Project Part II
Introduction
You will assume that you still work as a financial analyst for AirJet Best Parts, Inc. The company
is considering a capital investment in a new machine and you are in charge of making a
recom
12/9/12
Professor
Finance
Course Project Part II
Introduction
You will assume that you still work as a financial analyst for AirJet Best Parts, Inc. The company
is considering a capital investment in a new machine and you are in charge of making a
recomme
Maureen Primosch
Ch 11 Homework
Chapter 11
4. You have $10,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of
14% and Stock Y with an expected return of 11%. If your goal is to create a portfolio with an expected
retur
Maureen Primosch
Ch 4 & 5 Homework
Chapter 4
8. Calculating Rates of Return. In 2011, an 1880-O Morgan silver dollar sold for $13,113. What was the
rate of return on this investment?
t= 2011-1880 = 131
PV = $1
FV = $13,113
r=?
PV = FV/(1+r)^2
1 = 13,113/(
Maureen Primosch
Ch 6 & 7 Homework
Chapter 6
Both Bond Bill and Bond Ted have 7 percent coupons, make semiannual payments and are priced at par
value. Bond Bill has 3 years to maturity, whereas Bond Ted has 20 years to maturity. If interest rates
suddenly
11/17/12
name
Finance
Professor
Course Project Part I
Introduction
The Course Project is an opportunity for you to apply concepts learned to a real-life simulation
experience. Throughout the Course Project, you will assume that you work as a financial ana