Finance 302Financial Management
Chapter 8 Risk and Rates of Return
Risk: is the chance something unfavorable will occur (an unfavorable event)
Individuals and firms invest funds today with the expectation of receiving
additional funds in the futu
Finance 302 Final Exam Study Guide
1. A set of projects where only one can be accepted are said to be
2. What is the difference between the IRR and the MIRR? Which one is considered to be
more conservative? Why?
3. A portfolios risk can be divid
Chapter 3 Finance 302 Homework Problems
ST-1. NET INCOME AND CASH FLOW
Last year Rattner Robotics has $5 million in operating income (EBIT). Its depreciation
expense was $1 million, its interest expense was $1 million, and its corporate tax rate was
Chapter 11 Homework
Project K costs $52,125, its expected net cash inflows are $12,000 per year for 8 years, and its WACC is 12%.
What is the projects NPV?
Refer to Problem 11-1. What is the projects IRR?
Refer to Problem 11
Chapter 5 Homework
5-5 TIME TO REACH A FINANCIAL GOAL
You have $42,180.53 in a brokerage account, and you plan to deposit an additional $5,000 at the end of every
future year until your account totals $250,000. You expect to earn 12% annually
Chapter 10 The Cost of Capital
I. Cost of Capital:
Cost of Capital:
Firms required rate of return
Hurdle rate for new investment
Firms opportunity cost of funds
Capital long-term funds that will be used to finance long-term projects
Source of Capita
FINC 302 test #2 outline
Know how to find expected return, standard deviation and coefficient of variation
for a single asset
Know how to find expected return and beta for a portfolio; understand and know
how to make calculations using CAPM; b
Final Exam Outline
I. Alternative Forms of Business Organizations:
1. Sole Proprietorship: an unincorporated business owned by one individual
Easy, cheap to start (inexpensively formed)
Easy to manage
Few regulations (gove
Chapter 7 Cash and Receivables
I. What is Cash?
*The most liquid of assets
*The standard medium of exchange
*Basis for measuring and accounting for all other items
*It must be readily available to pay current obligations
*Must be free from any contractual
A market is. . .
1.People or organizations with
2.needs or wants, and with
3.the ability and
4.the willingness to buy.
A group of people that lacks any one of these
characteristics is not a market
Market Segments and Market Segmentation
What keeps companies honest?
Ethical Development Levels
Based on what will be
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Chapter 10 Homework
10-1 AFTER-TAX COST OF DEBT:
The Heuser Companys currently outstanding bonds have a 10% coupon and a 12% yield to maturity. Heuser
believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal
Chapter 9 Stocks and Their Valuation
1. One to one voting system
2. Residual left over
3. The maximum amount someone can lose in stock is the amount of the stock
I. Control of the Firm:
Proxy is a document giving one person the authority t
Chapter 9 Homework Finance 302
9-2 CONSTANT GROWTH VALUATION:
Thomas Brothers is expected to pay a $0.50 share dividend at the end of the year (that is, D1 = $0.50). The
dividend is expected to grow at a constant rate of 7% a year. The required rate of re
Chapter 8 Homework Finance 302
8-3 through 8-5, 8-8 through 8-12
8-3 REQUIRED RATE OF RETURN:
Assume that the risk-free rate is 6% and the expected return on the market is 13%. What is the required rate of
return on a stock with a beta of 0.7?
FINC 302 Test #1
What is the goal of the firm and why? Why are other goals not adequate?
What is it?
Statement of Shar
Chapter 4 Finance 302
Test #1 Outline
Current Assets/Current Liabilities
Average Collection Period (days sales outstanding):
Accounts Receivables/Average Sales Per Day
Accounts Receivables/(Annual Sale
Chapter 3 Finance 302
Test #1 Outline
Balance Sheet is a summary document of the firms financial position at a given point in time (a
snapshot of the firms position as a specific point in time).
Assets = Liabilities + Capital
902 Chapter 17 Investments
The use of some
simpler method that
yields results similar to
the effective-interest _
method is an application
of the materiality cornea"
Schedule of Interest
Revenue and Bond
What is strategic planning
and what is the goal?
Marketing plan a large part
Why write one?
Compare SBU performance to . . .
Provides common goals
How to discover market opportunities:
One must have global vision
Use effective strategies
Awareness of threats
Why use outsourcing?
Why use inshoring?
Effects of a Global Economy
Multinational firms have pros and cons
Spur competition, but can take mo
Define organization structure and organization design.
Organization structure can be defined as the sum of the ways in which it divides its labor
into distinct tasks and then coordinates them. Provides
What are organizational chart
MKTG 300 Chapter 11-15 Exam 3 Study Guide
1. Campbells well known for making soup, has recently developed a series of dry breakfast, and these
cereals are considered _.
A. New product line
2. After the research team at Nabisco had generated more than two
The Function and Creation of Negotiable Instruments
Types of Negotiable Instruments (TQ)
A Negotiable instrument is a signed writing containing an unconditional promise to pay
and exact sum of money.
Most negotiable instruments ar
Liability, Defenses, And Discharge
There are two kinds of liability associated with negotiable instruments:
Signers of negotiable instruments are potentially liable f
Privity of Contract
Only original parties to a contract have rights and liabilities under the contract.
Assignment or delegation.
Third Party Beneficiary Contract.
Transfer of contractual rights is an assignment.
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