Chapter 1
Proprietorship- unincorporated business owned by one
individual. Inexpensive, few govt. regulations, lower
income tax. Bad: unlimited liability, hard to get large
sums of capital, life is life.
Partnership- legal arrangement between two people w
Solutions Manual
Fundamentals of Corporate Finance 9th edition Ross, Westerfield, and Jordan Updated 12-18-2009
B-2 SOLUTIONS
CHAPTER 1 INTRODUCTION TO CORPORATE FINANCE
Answers to Concepts Review and Critical Thinking Questions 1. Capital budgeting (deci
Chapter 9 Review
1. Projects A and B each have an initial cost of $5,000, followed by a series of
positive cash inflows. Project A has total undiscounted cash inflows of $12,000,
while B has total undiscounted inflows of $10,000. Further, at a discount ra
Chapter 2
Non-annual Compounding
You borrow $3,000 on your credit card that
has an 18% APR. You make the minimum
payment of $50 each month. How many
years will it take to pay it off.
5 years
7 years
10 years
13 years
18 years
PV = +3000
PMT = -50
I = 18/1
Chapter 5 and 6
CPN = Coupon Rate x Face Value / # of coupons per year
Fisher Equation = relationship between real int., nominal int., inflation
- Solve for Nominal: R=[(1+r)/(1+i)]-1
- Solver for Real Rate: r = [(1+R)/(1+i)] 1
- (1 + Nom) = (1 + Inflatio
Follow Your Company
Sign up for a Twitter account at twitter.com. Then, follow your assigned company. (If
your company is not on twitter, let your instructor know.) Then choose a tweet or several
tweets that mention something newsworthy about your Company
Chapter 3 Homework Problems
1. Ortiz Lumber Yard has a current accounts receivable balance of $320,000. Credit sales for the year just ended were $1,440,000. (Round your answers to 2 decimal places. (e.g., 32.16). The receivables turnover is times. Days'
Chapter 1 Annuity-series of equal payments at fixed Areas in Finance- money and capital intervals for a specified # of periods markets, investments, financial Ordinary annuity-annuity whose payments management occur at the end of each period Proprietorshi
CHAPTER 2
-Fixed income liabilities most common liability
-Earnings per share = NI/outstanding shares
-Dividends per share = Dividends paid/outstanding shares
-Net working capital = current assets current liabilities
-Net cash flow = net income + deprecia
DuPont Analysis
Professor Susan White
ReturnonEquity
ROE=
NetProfitability
ROE=
ROE
AssetEfficiency
x
Leverage
NetIncome
ShareholdersEquity
Netincome
NetIncome
= NetProfitMargin
/Sales
Equity
x
x
Sales/
TotalAssetTurnover
Assets
x
Assets/
EquityMultiplier
Chapter 2 Review Session
4. At an inflation rate of 9%, the purchasing power
of $1 would be cut in half in just over 8 years.
How long, to the nearest year, would it take for the
purchasing power of $1 to be cut in half if the inflation
rate were only 4%?
Chapter 6 Homework Problems
1. If you deposit $1,300 at the end of each of the next 16 years into an account paying 12.5
percent interest, you will have $ in the account in 16 years. How much will you have if you
make deposits for 32 years? $ (Do not incl
Chapter 5 Homework Problems
1. Assume the total cost of a college education will be $270,000 when your child enters college in 14 years. You presently have $75,782 to invest. You must earn an annual rate of percent on your investment to cover the cost of
Chapter 11 Review Session
2007 Robert H. Smith School of Business University of Maryland
Chapter 11 Review Session
1. Projects A and B each have an initial cost of $5,000, followed by a series of positive cash inflows. Project A has total undiscounted ca
Chapter 4 Homework Problems
1. The most recent financial statements for GPS, Inc., are shown here (Do not include the
dollar sign ($). Round your answer to 2 decimal places. (e.g., 32.16):
Income
Statement
Sales
Costs
Taxable
income
Taxes
(34%)
Net income
Ch. 4 Review
1. Coheed Corp. had equity of $135,000 at the beginning of the year. At the end of
the year, the company had total assets of $250,000. During the year the company
sold no new equity. Net income for the year was $19,000 and dividends were
$2,5
Homework No. 9 - Chapter 10 Homework Problems
1. Winnebagel Corp. currently sells 19,800 motor homes per year at $29,700 each, and 7,920 luxury motor coaches per year at $56,100 each. The company wants to introduce a new portable camper to fill out its pr
Chapter 7 Review Session
2007 Robert H. Smith School of Business
University of Maryland
1.
Chapter 7 Review Session
Which of the following statements is true?
a.
b.
c.
d.
e.
Ignoring interest accrued between payment dates, if the required
rate of return
Name: _ Session: _
BMGT 313
FINANCIAL STATEMENT ANALYSIS
SPRING 2013 MIDTERM
MARCH 13TH, 2013
BASIC GUIDELINES
1. The time allocated for this exam is 75 minutes.
2. The work you submit must be your own. You are not to ask questions or discuss any aspects
Chapter 3 and 4 Review
Session
GDP Corp. has operating income (EBIT) of
$300,000, total assets of $1,500,000 and its capital
structure consists of 40% debt and 60% equity.
Total assets were equal to total operating capital.
The firms after-tax cost of cap
CHAPTER 3 THE TIME VALUE OF MONEY
OVERVIEW
A dollar in the hand today is worth more than a dollar to be received in the future because, if you had it now, you could invest that dollar and earn interest. Of all the techniques used in finance, none is more
BMGT340 SG Fall 2014
ANSWERS:
1._
2._
3._
4. _
5._
6._
7._
8._
9._
10._
11._
12._
13._
14._
15._
16._
17._
18._
19._
20._
21._
Mid-Term 2
Version A
BMGT340 SG Fall 2014
Mid-Term 2
Version A
BMGT340 SG Fall 2014
Mid-Term 2
Version A
Name:_
Section:_
Record
Homework 1 Solutions
2 points
1.
Klingon Widgets, Inc., purchased new cloaking machinery three years ago for
$6.6 million. The machinery can be sold to the Romulans today for $5 million.
Klingon's current balance sheet shows net fixed assets of $3,500,000
Question 1
10 out of 10 points
The primary purpose for developing a business plan is:
Answer
Selected Answer:
to obtain financing for the business.
Question 2
10 out of 10 points
_ is an organization that provides temporary low-cost, shared facilities to
Exam1SP09
Multiple Choice
Identify the choice that best completes the statement or answers the question.
Note that no question is identified as the bonus question. There are a couple of questions that will take a little longer
than average, but no super-l