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

Financial Management Foundations
MID-TERM EXAM
February 1, 2014
NAME_
1.
Which one of the following business types is best suited to raising large amounts of
capital? (37)
A. sole
proprietorship
B. limited liability
company
C. corporati
on
D. general
part