Assume today is August 1, 2006. Natasha Kingery is 30 years old and has a Bachelor of
Science degree in computer science. She is currently employed as a Tier 2 field service
representative for a telephony corporation located in Seattle, Washington, and ea
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #7
Time Value of Money Problems
1. What will a deposit of $4,500 at 10% compounded semiannually be worth if left in the bank
for
six years?
a. $8,020.22
b. $7,959.55
c. $8,081.55
d. $8,181.55
2. What will
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #14
1. You Have Been Considering a New Business Opportunity. Glendale Mall Has Offered to
Pay You $30,000 Per Year at the End of Each of the Next 4 Years to Set up a Photo
Finishing Machine on Their Second
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #17
1.
Last year, Star Corp reported annual revenue of $14 million, CoGS of $9.8 million
and a weighted average cost of capital of 8%. At year end, it had accounts receivable of
$0.6 million and accounts p
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #16
Answer TRUE/FALSE
1.
When analyzing mandatory cost only projects, it is possible to calculate the IRR but it
will always be less than the WACC.
2.
When analyzing mandatory cost only projects, the corre
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #15
1. You have the following cash flow situation:
Year
0
1
2
3
4
Cash Flow
(70,000)
0
0
0
96,500
If the NPV for the cash flows is ($8010), what is the WACC for this calculation?
A.
B.
C.
D.
E.
9.97%
5.46%
1
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #5
1. A US homeowner borrowed $350,000 through a 25 year standard (monthly compounding)
mortgage at a rate of 5.75% fixed exactly 10 years ago. He now wishes to repay the
mortgage early. How much will th
1
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #3
Use the following information to answer the questions:
Maturity
Yield
1 year
6.0%
2 years
6.2
3 years
6.4
4 years
6.5
5 years
6.5
1. If the pure expectations theory holds, what does the market expect
1
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #4
1. What is the present value to an investor today of receiving a lump sum of $10,000 in one
year if one-year rates are 4.75%?
2. How much will $15,000 invested for five years be worth if the fund earn
1
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #2
Use the following information to answer the questions:
Exhibit 1: Operating Statements for the years ending December 31, 2010-2012
(All amounts in thousands)
2010
2011
2012
$2,206
$2,617
$3,502
Beg. I
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #13
Answer TRUE/FALSE
1.
The difference between correlation and covariance is that covariance is a
standardized measure and correlation is a measure of total movement.
2.
It is possible for two assets to a
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #12
1. You have a bond with $10,000 par value, 6.16% coupon, paid semi-annually, 11
years to maturity, selling for $9180.76. What would be the price for an equivalent
zero-coupon bond that would provide th
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #11
Use the following data for Problems 1-6.
Number of Shares
Original cost
Estimated current value
Expected return
Standard deviation
Correlation with Stock A
Correlation with Stock
B
Beta
Stock A
1000
$1
Revenue from contract with customers IFRS
15
9/9/2015
Introduction
Learning outcomes
Understand the following
Why the need for the new standard
Recognition and measurement of
IFRS 15
revenue
Common types of transaction
Presentation and disclosure
Pe
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #12
1. You have a bond with $10,000 par value, 6.16% coupon, paid semi-annually, 11
years to maturity, selling for $9180.76. What would be the price for an equivalent
zero-coupon bond that would provide th
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #9
Answer TRUE/FALSE
1.
It is possible for a firm to have a positive beta, even if the correlation between its
returns and those of another firm is negative.
2.
When a company has more than one issue of de
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #10
1.
Assume that the risk-free rate is 6% and the market risk premium is 5%. Given this
information, what is the required return on the market portfolio?
2.
Stock A has a beta of 1.2 and a standard devia
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #11
Use the following data for Problems 1-6.
Number of Shares
Original cost
Estimated current value
Expected return
Standard deviation
Correlation with Stock A
Correlation with Stock
B
Beta
Stock A
1000
$1
FINA 301 Fall 2013
Dr. Mark D Griffiths
Self Test #13
Answer TRUE/FALSE
1.
The difference between correlation and covariance is that covariance is a
standardized measure and correlation is a measure of total movement.
2.
It is possible for two assets to a
Formula Sheet
Exam 2
Total Return =
Income
+
[Ending Value Beginning Value]
Beginning Value
Beginning Value
Stated, Quoted, Simple Rate = Annualized rate with no consideration of compounding
Periodic Rate = Per. Rate = Simple Rate / # Compounding Periods
Taxation in Financial Statement IAS 12
9/9/2015
Introduction
By the end you should be able to;
Define and account for current tax as
per IAS 12
Distinguish between taxable and
deductable per temporary differences
Explain the tax base of an asset/liabi
8/14/2014
Introduction
Learning objective
Understand how to account for
changes in policies
Understand how to account for
estimates and errors
8/14/2014
PROVISION, CONTINGENT LIABILITIES AND
ASSETS AND EVENTS AFTER THE REPORTING
DATE (IAS 37,1AS 10)
1
A
8/14/2014
Introduction
Learning outcomes
1. Define a construction contract as per
CONSTRUCTION
CONTRACTS
IAS 11
2.
3.
4.
5.
14/08/2014
IAS 11 CONSTRUCTION CONTRACTS
1
IAS11
Calculate contract revenue
Calculate contract costs
Explain how to recognize prof
8/14/2014
Introduction
Learning objective
Distinguish between legal and
constructive obligations
Explain in what circumstances a
provision may be made
Show how provisions are accounted for
8/14/2014
PROVISION, CONTINGENT LIABILITIES AND
ASSETS AND EVEN
Accounting cycle & Presentation of financial
statements(IAS1)
8/14/2014
Introduction
Learning Objectives
Understand the accounting cycle
Prepare an entitys financial statements
in accordance with prescribed structure
and content
Prepare and explain th
Cashflow statement IAS 7
8/14/2014
Introduction
Learning objective
prepare a statement of cash flows using
the direct method
prepare a statement of cash flows using
the indirect method
usefulness of cash flow information
interpret a statement of cash
Regulatory & Conseptual Framework
8/14/2014
Introduction
Learning out come
Explain the Conceptual Framework
for Financial Accounting
Explain the
Regulatory
Framework
Explain the Recogonition and
Measurement
of elements of
financial statements
8/14/201
FIN 301
Chapter 2
Capital Formation Process for Business
1.) Direct transfers of money and securities: when a business sells its stocks or
bonds directly to savers, without going through any type of financial
institution. (Small firms with relatively litt