Financial Management (BUSI 640)
Professor Fresard
Ocean Carriers
Case Questions
The purpose of this case is to estimate the relevant financial data necessary to
generate cash flow projections and calculate the Net Present Value (NPV) of an
investment oppo
Financial Management (BUSI 640)
Professor Fresard
Dells Working Capital
Case Questions
The purpose of this case is to practice constructing proformas and to understand
how firm operating and investment activities impact the financial deficit / surplus of
BUSI 640
Sep. 8, 2013
For this case, we would like to evaluate 8 projects which have different cash flows, payback
periods but same initial investments. Since all those projects put same amount of money in the
beginning, we will skip the part considering
Fin 3322
Investment Rules Homework
1.
You are considering the following two mutually exclusive projects that will not be
repeated. The required rate of return is 11.25% for project A and 10.75% for
project B. Which project should you accept and why?
Year
Short report
Critical Evaluation of Arbitrage Pricing Theory
FINC 615 9040
Introduction
Theory of arbitration pricing dates back to 1976, when it was proposed by Stephen Ross. This
theory is the most common in terms of pricing and assets as well as many a
Input Area:
138:
Rwacc = .726 x 17% + .274 x 10% x .65 = 14.12%
Debttoequity ratio
Cost of equity
Cost of debt
Tax rate
45%
17%
10%
35%
Output Area:
WACC
14.12%
1312:
a.
b.
Input Area:
Debttoequity ratio
WACC
Tax rate
Cost of equity
Aftertax cost of
164:
Input Area:
Plan I:
Shares outstanding
a.
b.
240,000
Plan II:
Shares outstanding
Debt outstanding
Interest rate
160,000
$3,100,000
10%
EBIT
EBIT
Plan I
Plan II
EBIT
$750,000.00 $750,000.00
Interest
$0.00
$310,000.00
NI
$750,000.00 $440,000.00
EPS
$3
158:
Input area:
Call price
One year interest rates
$1,250
11.00%
Face value: $1,000
P= .60 * $1,250 + .40 * $1,000 = $1,150
P= 1,000 + 1,000/0.13 = $8,692.30
Probability of rate in one year
Rate in one year
60%
13%
Probability of rate in one year
Rate i
Michael L. Robinson
Dr. Michael G. McMillan
FIN 620 Midterm Exam
Due: 3/4/2012
Answer sheet
1. Average return = 6.59%; Variance = 3.35%
2. Discount rate = .1564 or 15.64%
3. Asset beta = .48
4. Expected return of companys common stock = 11.4%
5. Corporati
Chapter 17
Problems 1, 2, 3, 6, 10
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 Addin" be installed in
Chapter 16
Problems 2, 6, 12, 16
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 Addin" be installed in E
Chapter 15
Problems 6, 9
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 Addin" be installed in Excel.
To
Chapter 13
Problems 2, 5, 7, 11, 14
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 Addin" be installed i
Chapter 10
Problems 4, 6, 10, 18 ,19
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 Addin" be installed
Chapter 20
Question 4
Input Area:
Price
Undervalued IPO
Overvalued IPO
# of shares
1/2 # of shares
$
$
$
40
8
5
1,000
500
Output Area:
If you receive 1000 shares each, the profit
is:
$
3,000
Expected profit
$
(1,000)
This is an example of the winner's cur
Chapter 20
Question 14
Input Area:
Stock price
Shares outstanding
Amount raised
$
$
a. Old shares to new shares
b. Old shares to new shares
27
1,000,000
2,000,000
2
4
Output Area:
a. New shares
Price exright
Subscription price
Value of a right
500,000
$
Financial Analysis and Modeling Using Microsoft Excel
FIN 615

Fall 2014
FIN 615 Practice Problem Solution Set
The Syllabus identifies select optional practice problems that will help you focus your studies. Complete the practice problems and
and selfcheck
Apple, Inc.
DATE
CLOSE
2006
59.77
2007
121.19
2008
188.75
2009
135.81
Financial Analysis and Modeling Using Microsoft Excel
FIN 615

Fall 2014
Dolan Banking Company
Balance Sheet
For the Year Ended January 31, 2010 ($ in millions)
Assets
2010
Current Assets
Cash
2.1
Receivables
0.9
Total Current Assets
$3.0
NonCurrent Assets
Investment Assets
$169.6
Fixed Assets
Property and equipment, net
1.9
Financial Analysis and Modeling Using Microsoft Excel
FIN 615

Fall 2014
January
Collections
Less Disbursements:
Mortgage
Payroll expenses
Insurance
Utilities
Professional Services
Bonus to Desk Manager
Total Disbursements
February
Lazy Inn
Cash Budget
For the Period January to December 2012
March
April
May
June
July
August
Se
Financial Analysis and Modeling Using Microsoft Excel
FIN 615

Fall 2014
Michael L. Robinson
Dr. Sally Hamilton
FIN 615 9020
Rental of banquet facility:
Entertainment for banquet:
Decorations:
Printing costs:
Total Fixed Costs (F) per ticket=
$2,500
$1,200
$400
$500
$4,600
Cost of meal:
Favors per attendee:
Total Variable Cost
Financial Analysis and Modeling Using Microsoft Excel
FIN 615

Fall 2014
Dolan Banking Company
Balance Sheet
As of Jan. 31, 2010 ($ in millions)
Assets
Current Assets
Cash
Receivables
Investment assets
Other assets
Total Current Assets
Fixed Assets
Property and equipment, net
Total Fixed Assets
Total Assets
Liabilities and Own
Financial Analysis and Modeling Using Microsoft Excel
FIN 615

Fall 2014
Michael L. Robinson
Dr. Sally Hamilton
FIN 615 9040
Rental of banquet facility:
Entertainment for banquet:
Decorations:
Printing costs:
Total Fixed Costs (F) per ticket=
$2,500
$1,200
$400
$500
$4,600
Cost of meal:
Favors per attendee:
Total Variable Cost
Financial Analysis and Modeling Using Microsoft Excel
FIN 615

Fall 2014
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.9991430486
R Square
0.9982868315
Adjusted R Square
0.9977157753
Standard Error
35523.076579
Observations
5
ANOVA
df
Regression
Residual
Total
Intercept
Sales
SS
MS
F
Significance F
1 2205960110240 2.20596E
Financial Analysis and Modeling Using Microsoft Excel
FIN 615

Fall 2014
Michael L. Robinson
Dr. Sally Hamilton
FIN 615 9020
Rental of banquet facility:
Entertainment for banquet:
Decorations:
Printing costs:
Total Fixed Costs (F)=
$2,500
$1,200
$400
$500
$4,600
Cost of meal:
Favors per attendee:
Total Variable Costs (V) per t