CHAPTER 3 - FINANCIAL STATEMENTS
The Balance Sheet
Chapter 3: Balance Sheet Question 1
Identify the date shown at the top of your selected companys balance sheet.
Current Year
2011
Prior Year
2010
Doe
Practice Problems 8 Risk and Return
1) Suppose you invest in 100 shares of Harley-Davidson at $40 per share and 200 shares of
Yahoo at $25 per share. If the price of Harley-Davidson increases to $50 a
Homework 1 Practice Problems
Time Value of Money Solution
1) Steve is offered an investment where for every $1.00 invested today, he will receive $1. 10 at
the end of each of the next five years. Stev
Practice Problems 5 Investment Decisions
1) A firm has an opportunity to invest $100,000 today that will yield $115,000 in one year. If
interest rates are 6%, what is the net present value (NPV) of th
Practice Problems 3
Bond Valuation
1) An investor holds a Ford bond with a face value of $5000, a coupon rate of 4%, and
semiannual payments that matures on 01/15/2012. How much will the investor rece
Practice Problems 9 WACC
1) A firm incurs $50,000 in interest expenses each year. If the tax rate of the firm is 30%, what is
the effective after-tax interest rate expense for the firm?
A) $27,000
B)
Practice Problems Corporate Bonds
1) Bonds with a high risk of default generally offer high yields.
Answer: TRUE
2) Why are the interest rates of U.S. Treasury notes less than the interest rates of eq
Practice Problems 7 Stock Valuation
1) Matilda Industries pays a dividend of $2.25 per share and is expected to pay this amount
indefinitely. If Matilda's equity cost of capital is 12%, which of the f
1) You are interested in purchasing a new automobile that costs $35,000. The dealership offers
you a special financing rate of 6% APR (0.5%) per month for 48 months. Assuming that you do
not make a do
Practice Problems 6 Capital Budgeting
1) Vernon-Nelson Chemicals is planning to release a new brand of insecticide, Bee -Safe, that
will kill many insect pests but not harm useful pollinators. Buying
Quiz 1
1. Matt and Alicia created a firm that is a separate legal entity and will share
ownership of that firm on a 75/25 basis. Which type of entity did they create if they have no
personal liability
Business Finance-FINC 332
Chapter 3, page 84, problems 1,4,6,9,10
1.)Calculating Liquidity Ratios-SDJ, Inc., has net working capital of $2,710, current
liabilities of $3,950, and inventory of $3,420.
TOPIC I, II
Review and Problems
FINC 332 - Spring 2013
Gupta-Mukherjee
1
Topic II Recap: Formulas
FVt = PV (1 + r )
FVt
Perpetuity Formula:
PV =
t
AnnuityrFormula
(1 + )
[
PV = C
1
r
t
PV =
1
r (1+r
Optionals ch 16
1. Which one of the following commences on the day inventory is purchased and
ends on the day the payment for the sale of that inventory is collected?
Assume all sales and purchases ar
Business Finance
Chapter 5 Homework Problems 1,6,9,10,12
9.17.2012
1.)Simple Interest Versus Compound Interest-First City Bank pays 7 percent simple
interest on its savings account balances, whereas S
CHAPTER 7
INTEREST RATES AND BOND VALUATION
CHAPTER OUTLINE
7.1 Bonds and Bond Valuation
7.2 More about Bond Features
7.3 Bond Ratings
7.4 Some Different Types of Bonds
7.5 Bond Markets
7.6 Inflation
Chapter 8
Zero growth case: the PV of a perpetuity.
P=D/R (price per share = cash flow/required return)
Ex: What is the price of a share of stock if the future dividend is $10 per year,
and the requ
Ch 18 optionals
1. Which of these is defined as an agreement to exchange two securities or two
currencies?
A.
B.
C.
D.
E.
Hedge
Swap
SWIFT
Gilt
Arbitrage
2. Which one of the following is the best univ
1. Which one of the following is a working capital management decision?
A. determining the amount of equipment needed to
complete a job
B. determining whether to pay cash for a purchase or use the cre
Finance: Exam 1
Chapter 1:
Corporate finance is the art and science of addressing three issues: capital
budgeting, capital structure, and working capital management.
Sole proprietorship: unlimited l
Optionals ch 12
1. Katie owns 100 shares of ABC stock. Which one of the following terms is used
to refer to the return that Katie and the other shareholders require on their
investment in ABC?
A.
B.
C
Chapter 5
*Simple interest: interest earned in the course of the investment is not reinvested,
so that the interest is only on the principal amount.
A=P(1+rt)
*Compound interest: interest earned in t
Chapter 7
Know the important bond features and bond types
Bond
Par/Face value
Coupon rate
Coupon payment
Maturity date
Yield or Yield to maturity
The rate implied by the current bond price
Di
Introduction
to Financial
Management
CHAPTER 1
Financial Management
Decisions
Capital budgeting
Capital structure
Working capital management
Forms of Business
Ownership
Sole proprietorship
Partnership
Finance Midterm Notes
Chapter 1
Chapter 1 Introduction to Financial Management
1.1 Finance: A Quick Look
Four basic areas of finance
o Corporate finance
o Investments
o Financial institutions (Banks)
4.1.1 Introduction to Net Present Value and Internal Rate of Return
Net Present Value (NPV) is the difference between the present value of cash inflows and the
present value of cash outflows. NPV comp