FNAN 301/303, Fall 2015, test 4, version D, solutions
1. According to the class overheads and basic ethics, which one of the following assertions about
insider trading, which is against the law, is true?
A. Insider trading is legal and should be considere
FNAN 301/303, Fall 2015, test 2, version D, solutions
1. Bonds issued by DeAngelos Flavors have a par value of $1000, were priced at $1,195 1 year
ago, and are priced at $1,180 today. The bonds pay annual coupons and just made a coupon
payment. If the bon
FNAN 301/303, Fall 2015, test 3, version D, solutions
1. What is the expected after-tax cash flow from selling a piece of equipment if Abuela Pastries
purchases the equipment today for $260,000, the tax rate is 20%, the equipment is sold in 3 years
for $1
(25) 1. What are the economic functions that financial intermediaries perform that benefit society? In your answer, discuss the relationship of
financial intermediaries and financial markets to the savings-investment process within an economy and to each
of money part 1 - 1
FNAN 301/303
Financial Management
Time value of money
Part 1
of money part 1 - 2
Topics Covered
Overview of time value of money
Single cash flows
Timelines
of money part 1 - 3
Time Value of Money
Whats the most you would pay today for
FNAN 301/303, lab on 6/2/2016
Spring 2011, test 3, question 9, version 4, modified by adding IRR & NPV
1. The following table presents information on a potential project with conventional cash flows currently being
evaluated by SDA. Which of the statement
of money part 2 - 1
FNAN 301/303
Financial Management
Time value of money
Part 2
of money part 2 - 2
Topics Covered
Multiple cash flows
The appropriate period and rate
of money part 2 - 3
Present Value with Multiple Cash Flows
The present value of multipl
FNAN 301/303, lab on 6/9/2016
Fall 2010, final, question 15, version 4
1. A stock had returns of 38.00%, -29.00%, and 49.00% in each of the past three years. Over the
past four years, the arithmetic average annual return for the stock was 18.50%. What was
FNAN 301/303
Solutions to test bank problems bonds
Some answers may be slightly different than provided solutions due to rounding
1. Which one of the assertions about statement 1 and statement 2 is true? Statement 1: If a
company performs very well, inves
Solutions to lecture problems bonds and stocks
Yesterday, 45,000 bonds issued by Patriot Theaters were bought by a variety of investors for $1,000
per bond. Patriot Theaters received nothing from the sale of these bonds. Were the 45,000 bonds
more likely
FNAN 301/303
Solutions to test bank problems time value of money, part 2
Some answers may be slightly different than provided solutions due to rounding
1. Rainbow bought a new home entertainment system today from Andres Electronics. She will
pay $720 in 1
and stocks - 1
FNAN 301/303
Financial Management
Bonds and stocks
and stocks - 2
Topics Covered
Bonds
Overview
Value
and yield-to-maturity
Key relationships associated with bond value
Rate of return for a bond
Stocks
Overview
Rate
of return on stock
FNAN 301/303
Solutions to test bank problems time value of money, part 1
Some answers may be slightly different than provided solutions due to rounding
1. Three years ago, Caroline invested $7,500. She has earned and will earn compound interest of 3.2
per
FNAN 301/303
Solutions to test bank problems capital budgeting criteria
Some answers may be slightly different than provided solutions due to rounding
1. The managers of Central Concrete Incorporated are evaluating 5 potential projects (A, B, C, D, and E)
FNAN 301/303
Solutions to test bank problems relevant cash flows and NPV analysis
Some answers may be slightly different than provided solutions due to rounding
1. Kwon Jewelers is evaluating a 1-year project that would involve an initial investment in
eq
FNAN 301/303, lab on 6/8/2016
1. Today, Sooner Company purchased a piece of equipment for $84,000 that will be depreciated to
$18,000 over 12 years using straight-line depreciation. What would the after-tax cash flow be from
the equipment sale if the equi
FNAN 301/303, lab on 6/10/2016
1. Tirico Insurance stock is currently priced at $82.00 per share and is expected to pay its next
dividend, which is expected to be $5.68, in 1 year. The stock has a risk premium of 8.32%, the riskfree rate is 6.27%, and inf
FNAN 301/303, lab on 5/27/2016
Spring 2015, test 2, question 7, version 3
1. The next three annual dividends paid by Mindys Mending stock are expected to be $7.43 in one year, $2.79 in two
years, and $3.05 in three years. The price of the stock is expecte
FNAN 301/303 Formulas and Notes (p. 1 of 6)
Value in t periods with simple interest:
C0 [1 + (simple interest rate per period t)] = C0 + (C0 simple interest rate per period t)
FVt = C0 (1+r)t
Financial calculator: In either BEGIN or END mode, FV is the fu
dgeting criteria - 1
FNAN 301/303
Financial Management
Capital budgeting criteria
dgeting criteria - 2
Topics Covered
Overview of capital budgeting
Evaluating capital budgeting opportunities
Net
present value (NPV)
Internal rate of return (IRR)
Payback
FNAN 301/303, lab on 6/3/2016
Spring 2011, test 4, question 5, version 4- modified by adding a side effect
1. Sliders operates 4 hamburger restaurants, all in malls. The firm is considering the diner project.
This project would involve opening a 5th resta
Solutions to lecture problems time value of money part 2
How much is a building worth that is expected to produce cash flows of $200,000 in 1 year
and $500,000 in 2 years if the cost of capital is 10 percent? Since theres no information on
expected cash f
Solutions to lecture problems time value of money part 1
If Eric invests $500 today in an account that earns 8.00% per year in simple interest, how
much will he have in 15 years?
With simple interest, C0 today becomes the following in t periods:
C0 (1 + (
FNAN 301: Video PowerPoint Lectures
Recorded Lecture (fnan301 channel)
Topic
Link
01 corporate financial management
01.001.01 corporate financial management
http:/www.youtube.com/watch?v=4equfBXllUU
02 time value of money, part 1
02.001.01 piggy banks
htt
Lecture problems relevant cash flows and NPV analysis
Toms Tubas must raise $50,000 in order to be able to buy the equipment needed for the
marching band project. If Toms takes out a 2-year loan for $50,000, then which, if any, of
these cash flows should
FNAN 301/303
Solutions to test bank problems stocks
Some answers may be slightly different than provided solutions due to rounding
1. Which one of the assertions about statement 1 and statement 2 is most likely to be true?
Statement 1: If 1 million shares
FNAN 301/303, lab on 5/26/2016
Spring 2010, test 3, question 2, version 4
1. Bond A and bond B both pay semi-annual coupons, mature in 8 years, have a face value of $1000, pay
their next coupon in 6 months, and have the same yield-to-maturity. Bond A has
Syllabus: FNAN 301/303 (Financial Management), Summer A 2016
Updated May 12, 2016
Professor:
Office:
Email:
Phone:
Office hours:
Dr. Steven Pilloff
Enterprise Hall, Room 229
spilloff@gmu.edu
703-993-5058
M R: 3:40 pm 4:15 pm and by appointment
Class room: