LP 6 - Computing Optimal Capital Structure (Cont)
Ch 11A-1
Assume that R = 5 percent and Km = 10.5 percent. Compute Kj for the following betas, using
the formula 11A-2.
a. 0.6
Kj = R + (Km -R)
Substitute the values in the formula to calculate Kj
Kj = R +

Learning Plan 5 Working Capital
Chapter 6
Problem 6-14 page 187
Guardian Inc. is trying to develop an asset-financing plan. The firm has $400,000 in temporary current
assets and $300,000 in permanent currents assets. Guardian also has $500,00 I fixed asse

LP3: Assignment: Cost of Goods Sold and Cash Budgeting
Chapter 4
4-7. Sales Projections page 114
Reference to table 4-1 page 98
Dodge Ball Bearings had sales of 15,000 units at $45 per unit last year. The marketing manager projects a 30 percent
increase i

Chapter 12 Problems 3, 6, 11, 18
3. Assume a firm has earnings before depreciation and
taxes of $200,000 and no depreciation. It is in a 40 percent
tax bracket
Earning before depreciation and taxes
Depreciation
Earnings before taxes
Taxes @ 40%
Earnings a

Convex Mechanical Supplies
Sales
(17,00
0@
$20)
$340,000
Cost
of
goods
sold:
Old
invent
ory:
Quanti
5,000
ty
(units)
Cost
per
unit
Total
New
invent
ory:
$12
#
Quanti
12,000
ty
(units)
Cost
per
unit
Total
$16
#
Total
cost of
goods
sold
$252,000
Gross
profi

LP7 Assignment: Capital Budgeting
Chapter 12: Problems 3, 6, 11 and 18
12-3. Cash Flow
page 411
Table 12-2
page 385
Assume a firm has earnings before depreciation and taxes of $200,00 and no depreciation. It is in a 40
percent tax bracket.
a) Compute its

Discussion 4: Time Value of Money
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Time value of money is an important aspect of money management. Why is it important to know what
interest rates, terms of an agreement, and present value are

LP 4 Assignment- Calculating Time Value of Money
Chapter 9
9-8. Present Value
page 288
Reference to Excel spreadsheet present value formula
Your father offers you a choice of $105,000 in 12 years or $47,000 today.
a. If money is discounted at 8 percent, w

Week 1 FN3000 Discussions
Discussion 1.1: Introductions
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Use the Introductions discussion thread to get to know your classmates.
Describe a personal interest and identify and

Name
Guardian Inc
a. Alternative financing plans
Temporary current assets
$
Permanent current assets
$
Fixed assets
$
Total assets
$
400,000
300,000
500,000
1,200,000
Conservative
Term
Long-term
Short-term
Total Interest Charge
% of Total Asset
Asset Allo

Week 2 FN3000 Discussion
Discussion 2: Analyze Financial Statements
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dec

Discussion 5: Managing Working Capital
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Many times businesses will fail because their method of managing working capital does not focus on the
importance of sustainin

Week 2 FN3000 Discussion
Discussion 2: Analyze Financial Statements
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Why analyze financial statements? As an organization, how do financial statements contribute to the
dec

Week 8 FN3000 Discussion
Discussion 6: Optimal Capital Structure
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Cost of capital is the means by which a business can raise money, either through the issuance of
co

LP3: Assignment: Cost of Goods Sold and Cash Budgeting
Chapter 4
Problem 4-6
page 113
Cybersecurity Systems had sales of 3,500 unites at $75 per unit last year. The marketing manager projects
a 30 percent increase in unit volume sales this year with a 40

FN Week 9 Discussion
LP7
Graded Discussion 9: Capital Budgeting Decisions
Capital budgeting decisions include determining when long term investments, such as an equipment
purchase, are necessary and worth pursuing. One method of capital budgeting process

LP 2 Assignment- Profitability and Ratio Analysis - Problems 2, 8, 22
2. Database Systems is considering expansion into a new product line. Assets to support expansion will
cost $380,000. It is estimated that Database can generate $1,410,000 in annual sal

Chapter 4 Assignment- Financial Forecasting
Chapter 4
4-7. Sales Projections page 114
Dodge Ball Bearings had sales of 15,000 units at $45 per unit last year. The marketing manager projects a 30 percent
increase in unit volume sales this year with a 20 pe

Discussion 3: Financial Forecasts
Why construct financial forecasts? From a planning perspective, is it necessary to forecast the future as it
relates to the organization as well as the industry as a whole? If you were President and CEO of Apple
Corporati

EXTRA CREDIT FN3000
Jacqueline Naylor
Chapter 2 Advanced Problem 27, page 53
Advanced Problem 27
2-27
For December 31, 2012, the balance sheet of Baxter Corporation was as follows:
Currents Assets
Cash.$ 15,000
Accounts receivable 20,000
Inventory 30,000

LP 4 Assignment- Calculating Time Value of Money
Chapter 9
Problem 9-2 Page 287
What is the present value of:
PV= FV 1
(1+i)
a.) $7,900 in 10 years at 11 percent?
FV = $7,900, n = 10 and i = 11%
$ 7,900.00
(1+0.11000)10 = $2,782.26
b.) $16,600 in 5 years

Name Sarah Olo
Speedy Delivery Systems
Old Equipment
Return
Fin w/debt
New Equipment
Return
Fin w/CE
Debt and Common Equity
11%
6%
9%
15%
50%
2a. Weighted average cost of capital
(0.11+0.09)/2
10.00%
2b. Which project should be accepted
The old equipment

Graded Discussion 6: Optimal Capital Structure
Cost of capital is the means by which a business can raise money, either through the issuance of stock, borrowing,
or a combination of the two. Keep in mind that a business must earn money that is equal to, i

Week 10 LP8 Discussion FN3000
Discussion 8: International Finance
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More and more businesses are realizing greater profit potential by selling their products and services

LP 6 - Computing Optimal Capital Structure (Cont)
Ch 11A-1
Assume that R = 5 percent and Km = 10.5 percent. Compute Kj for the following betas, using
the formula 11A-2.
a. 0.6
Kj = R + (Km -R)
Substitute the values in the formula to calculate Kj
Kj = R +

LP 1 Earnings Per Share Chapter 2 Problems 1, 9, and 24
1. Frantic Fast Foods had earnings after taxes of $420,000 in the year of 2012 with 309,000 shares
outstanding. On January 1, 2013, the firm issued 20,000 new shares. Because of the proceeds from the

Week 8 FN3000 Discussion
Discussion 6: Optimal Capital Structure
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co

Chapter 11 Problems 2, 9, 19, and Appendix 11A-1
11-2.
page 365
Speedy Delivery Systems can buy a piece of equipment that is anticipated to provide an 11 percent return
and can be financed at 6 percent with debt. Later in the year, the firm turns down an

Chapter 21 Problems 1, 2, 5, and 7
21-1. Spot and Forward Rates
page 680
Reference to pages 661-662
The Wall Street Journal reported the following spot and forward rates for the Swiss franc (S/SF).
Spot.
$0.8202
30-day forward
$0.8244
90-day forward
$0.82