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10/28/2015
Chapter 4. Mini Case
Situation
Assume that you are nearing graduation and have

Solution
Chapter:
Problem:
7/16/2015
4
35
Time Value of Money
a. Find the FV of $1,000 invested to earn 10% annually 5 years from now. Answer this
question by using a math formula and also by using the Excel function wizard.
Inputs:
Formula:
Wizard (FV):

Solution
Chapter:
Problem:
7/16/2015
3
15
Joshua & White Technologies: December 31 Balance Sheets
(Thousands of Dollars)
Assets
Cash and cash equivalents
Short-term investments
Accounts Receivable
Inventories
Total current assets
Net fixed assets
Total as

Solution
Chapter:
Problem:
11
18
Estimating Cash Flows and Analyzing Risk
Webmasters.com has developed a powerful new server that would be used for corporations Internet activities. It w
million at Year 0 to buy the equipment necessary to manufacture the

BUS 622
Chapter 11
Cash Flow Estimation and Risk Analysis
Problems:
20. Comparing Mutually Exclusive Projects [ LO1] Lang Industrial Systems Company ( LISC) is trying
to decide between two different conveyor belt systems. System A costs $ 240,000, has a f

BUS 622
Chapter 9
Cost of Capital
15. Finding the WACC [ LO3] Given the following information for Lightning Power
Co., find the WACC. Assume the companys tax rate is 35 percent.
Debt:
8,000 6.5 percent coupon bonds outstanding, $ 1,000 par value, 25 years

f. Calculate the price/earnings ratio, price/cash flow ratio, and market/book ratio. Do these ratios indicate th
are expected to have a high or low opinion of the company?
Market Value ratios
Price-to Earnings Ratio
Price-to-Cash Flow Ratio
Market-to-Book

8/3/15
Chapter:
Problem:
12
11
Start with the partial model in the file Ch12 P11 Build a Model.xlsx on the textbooks Web site, which
contains Henley Corporations most recent financial statements. Use the following ratios and other
selected information for

Solution
Chapter:
Problem:
7/16/2015
2
15
a. Using the financial statements shown below, calculate net operating working capital, total net
operating capital, net operating profit after taxes, free cash flow, and return on invested capital for
the most re