Chapter 6
Templates for HW Problems
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
NOTE: Some functions used in these spreadsheets may require that
the "Analysis ToolPak" or "Solver Add-in" be installed i
FORMULAS AND CALCULATORS FOR THE FINAL EXAM
Note: This list is not all inclusive. Please make sure to master other calculations, such as taxes
(MACRS, Average, Marginal), collections, etc.
EBIT = Sales - Costs - Depreciation
Taxable Income = EBIT - Intere
Loans and Interest Rates (graded)
What is the difference between the annual percentage rate (APR) and the effective annual rate
(EAR)? Which rate do you believe is more relevant for financial decisions and why?
This section lists options that can be used
4. (TCO 3) Which of the following is not an approach to systems
development?
Prototyping.
Agile Methodologies.
Joint application design.
Re-engineering analysis.
Rapid application development.
5. (TCO 2) Arguably, the most instrumental person to the succe
1. What are the monthly payments for a 30 year traditional mortgage?
What are the payments for a 20 year traditional mortgage?
Monthly payment on a 30 year traditional Loan
PV
N
I/YR
FV
PMT
(1,000,000)
360
0.54%
$6,320.68
Monthly payment on a 20 year trad
Sunset Boards
Sunsets Boards Inc.
Charley Baskett
DeVry University
BUSN 379
Professor Lance Parker
Sunset Boards
Sunset Boards currently pays out 50 percent of net income as dividends to Tad and the other
original investors, and has a 20 percent tax rate.
Chapter 4 do #3,
Calculating Present values:
For each of the following, compute the present value:
Present Value
Years
$10,823.02
$29,411.69
$128,928.43
$72,388.42
Interest Rate
12
4
16
21
Future Value
4%
9%
12%
11%
17,328
41,517
790,382
647,816
PV=FV/(1+
Chapter 5 Tutorial Questions
1. Present Value and Multiple Cash Flows. Rooster Co. has identified an investment project with the
following cash flows. If the discount rate is 10 percent, what is the present value of these cash flows?
What is the present v
Week 2 Homework
Charley Baskett
DeVry University
BUSN 379
Professor Lance Parker
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
$1,3
Sol: (8)
Years to maturity
YTM
Current Price of bond
Type of coupon payments
Number of periods
Semi-annual YTM
Par Value of bond
14.5
6.10%
$1,038
Semi-annual
29
3.05%
$1,000
Current bond price =
Current bond price =
$1,038 =
Present value of coupon payme
Chapter 4 Tutorial Questions
1. Simple Interest versus Compound Interest. First City Bank pays 6 percent simple interest on its
savings account balances, whereas Second City Bank pays 6 percent interest compounded annually. If
you made a deposit of $7,500
26. Zero Coupon Bonds [LO2] Suppose your company needs to raise $ 45 million and you want
to issue 30- year bonds for this purpose. Assume the required return on your bond issue will be 6
percent, and youre evaluating two issue alternatives: a 6 percent s
Charley Baskett
DeVry University
BUSN 379
Professor Lance Parker
Week 1 Homework
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
MGMT 340 WEEK 3 ASSIGNMENTS
Course Project: Petrie's Electronics "No Customer Escapes" Customer Relationship Management
(CRM) System
Objectives
Petrie's Electronics needs to improve its marketing and customer retention by increasing customer loyalty. The
Problem #3,
Lycan, Inc. has 7 percent coupon bonds on the market that have 8 years left to maturity. The
bonds make annual payment. If the YTM on these bonds is 9 percent, what is the current bond
price?
The price any is any bond is the PV of the interest
Question 1
Coupon rate
Time to maturity
YTM
Let the face value of the bonds be $100
Coupn payments
Current bond price
6%
9 years
8%
$6.00
$87.51
Question 2
Time to maturity
Coupon rate
number of coupon payments
(semiannual)
YTM
Let the face value of the b
Case Solutions
Cases 1,2,4,5,7
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
Case #1 - Cash Flows and Financial Statements at Sunset Boards
Input area:
Cost of goods sold
Cash
Depreciation
Interest expen
Chapter 9
Questions and Problems
1. Calculating Payback What is the
payback period for the following set of
cash flows.
To calculate the payback period, we need to find the
time that the project has recovered its initial investment.
After two years, the
Running head: Week 3 discussions
1
Week 3 Discussion Paper
Charley Baskett
DeVry University
Week 3 discussion post
Question 1: What are some of the most important risks associated with bonds?
The most important risks that are associated with bonds would b
Week 4 Case March 26, 2015
CHAPTER5
DiscountedCashFlowEvaluation
S&SAirsMortgage
1.
The 30 year loan payment will be:
PMT = PV x r/ (1-(1+r) ^-n
PMT = $35,000,000 x (.061/12)/(1-(1+.061/12)^-12*30)
PMT = $212,098.17
The 20 year loan payment will be:
PMT =
Cash Flows and Financial Statements at Sunset Boards, Inc.
Income Statement for 2013 & 2014
Net Sales
COGS
Gross Profit
Expenses
Depreciation
EBIT
Interest Paid
Earnings Before Taxes
Income Tax 20%
NET INCOME
2013
333,426
169,969
$163,457
2014
406,427
214
Chapter 2: 8, 14, and 19
#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?
Equation is: Sales