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FIN 370 Cash Flow Problem Sets (4-5,4-7,4-8,4-11,4-13)

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4-5 Multiyear Future Value How much would be in your savings account
in 11 years after depositing $150 today if the bank pays 8 percent per
year? (LG4-3) 4-7 Compounding with Different Interest Rates A deposit
of $350 earns the following interest rates: a. 8 percent in the first year. b.
6 percent in the second year. c. 5.5 percent in the third year. What would
be the third year future value? 4-8 Compounding with Different Interest
Rates A deposit of $750 earns interest rates of 9 percent in the first year
and 12 percent in the second year. What would be the second year future
value? (LG4-3) 4-11 Present Value What is the present value of a $1,500
payment made in nine years when the discount rate is 8 percent? (LG4-
4) 4-13 Present Value with Different Discount Rates Compute the
present value of $1,000 paid in three years using the following discount
rates: 6 percent in the first year, 7 percent in the second year, and 8
percent in the third year. (LG4-4)

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FIN 370 Final Exam Guide (New 2017)


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Which one of the following statements is correct concerning the cash


cycle? Accepting a suppliers discount for early payment decreases the
cash cycle. Increasing the accounts payable period increases the cash
cycle. The longer the cash cycle, the more likely a firm will need
external financing. The cash cycle can exceed the operating cycle if the
payables period is equal to zero. Offering early payment discounts to
customers will tend to increase the cash cycle. Precise Machinery is
analyzing a proposed project. The company expects to sell 2100 units
give or take 5 percent. The expected variable cost per unit is $260 and
the expected fixed costs are $589,000. Cost estimates are considered
accurate within a plus or minus 4 percent range. The depreciation
expense is $129,000. The sales price is estimated at $750 per unit, give
or take 2 percent. The tax rate is 35 percent. The company is conducting
a sensitivity analysis on the sales price using a sales price estimate of
$755. What is the operating cash flow based on this analysis? $86,675
$354,874 $368,015 $293,089 $337,975 You are doing some comparison
shopping. Five stores offer the product you want at basically the same
price but with differing credit terms. Which one of these terms is best-
suited to you if you plan to forgo the discount? 2/10, net 30 2/5, net 30
2/5, net 20 1/10, net 45 1/5, net 15 The plowback ratio is: The dollar
increase in net income divided by the dollar increase in sales. Equal to
net income divided by the change in total equity. Equal to one minus the
retention ratio. The change in retained earnings divided by the dividends
paid. The percentage of net income available to the firm to fund future
growth. Which one of the following is the financial statement that
summarizes a firms revenue and expenses over a period of time?
Statement of cash flows Market value report Tax reconciliation
statement Balance sheet Income statement Kellys Corner Bakery
purchased a lot in Oil City six years ago at a cost of $278000. Today,
that lot has a market value of $264,000. At the time of the purchase, the
company spent $6,000 to level the lot and another $8,000 to install storm
drains. The company now wants to build a new facility on that site. The
building cost is estimated at $1.03 million. What amount should be used
as the initial cash flow for this project? -$1,294,000 -$1,322,000 -
$1,045,000 -$1,308,000 -$1,308,000 Webster United is paying a
dividend of $1.32 per share today. There are 350,000 shares outstanding
with a market price of $22.40 per share prior to the dividend payment.
Ignore taxes. Before the dividend, the company had earnings per share
of $1.68. As a result of this dividend, the: Retained earnings will
decrease by $350,000. Earnings per share will increase to $3. Total firm
value will not change. Price-earnings ratio will be 12.55. Retained
earnings will increase by $462,000. The common stock of Dayton
Repair sells for $43.19 a share. The stock is expected to pay $2.28 per
share next year when the annual dividend is distributed. The firm has
established a pattern of increasing its dividends by 2.15 percent annually
and expects to continue doing so. What is the market rate of return on
this stock? 7.67 percent 7.59 percent 7.43 percent 7.14 percent 7.28
percent Which one of the following should earn the most risk premium
based on CAPM? Diversified portfolio with returns similar to the overall
market. Stock with a beta of 1.38. Portfolio with a beta of 1.01. U.S.
Treasury bill. Stock with a beta of 0.74. Which one of these actions will
increase the operating cycle? Assume all else held constant. Decreasing
the receivables turnover rate. Decreasing the payables period.
Decreasing the average inventory level. Increasing the payables period.
Increasing the inventory turnover rate. Oil Wells offers 6.5 percent
coupon bonds with semiannual payments and a yield to maturity of 6.94
percent. The bonds mature in seven years. What is the market price per
bond if the face value is $1,000? $902.60 $996.48 $913.48 $989.70
$975.93 Three Corners Markets paid an annual dividend of $1.37 a share
last month. Today, the company announced that future dividends will be
increasing by 2.8 percent annually. If you require a return of 11.6
percent, how much are you willing to pay to purchase one share of this
stock today? $16.67 $16.00 $18.23 $17.68 $15.57 Which one of the
following is a source of cash? Granting credit to a customer Purchase of
inventory Acquisition of debt Payment to a supplier Repurchase of
common stock Nadines Home Fashions has $2.12 million in net
working capital. The firm has fixed assets with a book value of $31.64
million and a market value of $33.9 million. The firm has no long-term
debt. The Home Centre is buying Nadines for $37.5 million in cash.
The acquisition will be recorded using the purchase accounting method.
What is the amount of goodwill that The Home Centre will record on its
balance sheet as a result of this acquisition? $5.86 million $3.34 million
$4.14 million $1.48 million $3.74 million Chelsea Fashions is expected
to pay an annual dividend of $1.10 a share next year. The market price of
the stock is $21.80 and the growth rate is 4.5 percent. What is the firms
cost of equity? 9.55 percent 10.54 percent 9.24 percent 7.91 percent 9.77
percent Operating leverage is the degree of dependence a firm places on
its: Depreciation tax shield. Variable costs. Fixed costs. Operating cash
flows. Sales. Phillips Equipment has 75,000 bonds outstanding that are
selling at par. Bonds with similar characteristics are yielding 7.5 percent.
The company also has 750,000 shares of 6 percent preferred stock and
2.5 million shares of common stock outstanding. The preferred stock
sells for $64 a share. The common stock has a beta of 1.21 and sells for
$44 a share. The U.S. Treasury bill is yielding 2.3 percent and the return
on the market is 11.2 percent. The corporate tax rate is 34 percent. What
is the firms weighted average cost of capital? 11.56 percent 11.30
percent 11.18 percent 10.64 percent 9.69 percent Andy deposited $3,000
this morning into an account that pays 5 percent interest, compounded
annually. Barb also deposited $3,000 this morning into an account that
pays 5 percent interest, compounded annually. Andy will withdraw his
interest earnings and spend it as soon as possible. Barb will reinvest her
interest earnings into her account. Given this, which one of the following
statements is true? Barb will earn more interest the second year than
Andy. Barb will earn more interest the first year than Andy will. Andy
will earn compound interest. Andy will earn more interest in year three
than Barb will. After five years, Andy and Barb will both have earned
the same amount of interest. When utilizing the percentage of sales
approach, managers: 1. Estimate company sales based on a desired
level of net income and the current profit margin. 2. Consider only
those assets that vary directly with sales. III. Consider the current
production capacity level. 1. Can project both net income and net
cash flows. III and IV only I, III, and IV only II and III only II, III, and
IV only I and II only You are comparing two investment options that
each pay 6 percent interest compounded annually. Both options will
provide you with $12000 of income. Option A pays $2,000 the first year
followed by two annual payments of $5,000 each. Option B pays three
annual payments of $4,000 each. Which one of the following statements
is correct given these two investment options? Assume a positive
discount rate. Option B is a perpetuity. Option B has a higher present
value at time zero. Both options are of equal value since they both
provide $12,000 of income. Option A has the higher future value at the
end of year three. Option A is an annuity. The condition stating that the
interest rate differential between two countries is equal to the percentage
difference between the forward exchange rate and the spot exchange rate
is called: Uncovered interest rate parity. The unbiased forward rates
condition. Purchasing power parity. Interest rate parity. The international
Fisher effect. The Dry Dock is considering a project with an initial cost
of $118400. The projects cash inflows for years 1 through 3 are $37200,
$54600 and $46900, respectively. What is the IRR of this project? 8.42
percent 7.48 percent 8.56 percent 8.04 percent 8.22 percent The 7
percent bonds issued by Modern Kitchens pay interest semiannually
mature in eight years and have a $1000 face value. Currently, the bonds
sell for $1,032. What is the yield to maturity? 7.20 percent 6.87 percent
6.48 percent 6.92 percent 6.08 percent Al invested $7200 in an account
that pays 4 percent simple interest. How much money will he have at the
end of five years? $8,678 $8,710 $8,299 $8,056 $8,640 All of the
following represent potential gains from an acquisition except the: Use
of surplus funds. Tax loss carryovers acquired in the acquisition.
Obtainment of a beachhead. Diseconomies of scale related to increased
labor demand. Lower costs per unit realized. Fresno Salads has current
sales of $6000 and a profit margin of 6.5 percent. The firm estimates that
sales will increase by 4 percent next year and that all costs will vary in
direct relationship to sales. What is the pro forma net income? $438.70
$327.18 $405.60 $303.33 $441.10 A news flash just appeared that
caused about a dozen stocks to suddenly drop in value by 20 percent.
What type of risk does this news flash best represent? Market
Unsystematic Portfolio Total Non-diversifiable Which one of the
following terms is defined as the mixture of a firms debt and equity
financing? Cash management Cost analysis Working Capital
Management Capital Structure Capital budgeting George and Pat just
made an agreement to exchange currencies based on todays exchange
rate. Settlement will occur tomorrow. Which one of the following is the
exchange rate that applies to this agreement? Forward exchange rate
Triangle rate Cross rate Current rate Spot exchange rate

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FIN 370 Final Exam Guide (New)


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Which financial statement reports the amounts of cash that the firm
generated and distributed during a particular time period? statement of
retained earnings Income statement Statement of cash flows Balance
sheet Which of these provide a forum in which demanders of funds raise
funds by issuing new financial instruments, such as stocks and bonds?
Money markets Investment banks Primary markets Secondary markets
The top part of Mars, Inc.s 2013 balance sheet is listed as follows (in
millions of dollars). What are Mars, Inc.s current ratio, quick ratio, and
cash ratio for 2013? 4.2, 1.0, 0.2 2.3333, 0.5556, 0.1111 10.5, 6.0, 1.0
0.1111, 0.5556, 0.2 Which of these ratios show the combined effects of
liquidity, asset management, and debt management on the overall
operation results of the firm? Financial Profitability Coverage Liquidity
As new capital budgeting projects arise, we must estimate__________.
the cost of the stock being sold for the specific project when such
projects will require cash flows the cost of the loan for the specific
project the float costs for financing the project Whats the current yield
of a 6 percent coupon corporate bond quoted at a price of 101.70? 6.1
percent 10.2 percent 6.0 percent 5.9 percent We call the process of
earning interest on both the original deposit and on the earlier interest
payments: computing. multiplying. compounding. discounting. Which
financial statement reports a firms assets, liabilities, and equity at a
particular point in time? Balance sheet Income statement Statement of
retained earnings Statement of cash flows You are trying to pick the
least-expensive machine for your company. You have two choices:
machine A, which will cost $50,000 to purchase and which will have
OCF of -$3,500 annually throughout the machines expected life of three
years; and machine B, which will cost $75,000 to purchase and which
will have OCF of -$4,900 annually throughout that machines four-year
life. Both machines will be worthless at the end of their life. If you
intend to replace whichever type of machine you choose with the same
thing when its life runs out, again and again out into the foreseeable
future, and if your business has a cost of capital of 14 percent, which one
should you choose? Machine A Machine B Neither machine A nor B
Both machines A and B When firms use multiple sources of capital, they
need to calculate the appropriate discount rate for valuing their firms
cash flows as__________. a simple average of the capital components
costs a weighted average of the capital components costs a sum of the
capital components costs they apply to each asset as they are purchased
with their respective forms of debt or equity Which of these is used as a
measure of the total amount of available cash flow from a project?
Operating cash flow Investment in operating capital Free cash flow Sunk
cash flow Which of these does NOT perform vital functions to securities
markets of all sorts by channeling funds from those with surplus funds to
those with shortages of funds? Secondary markets Mutual funds
Insurance companies Commercial banks Wills Wheels, Inc. reported a
debt-to-equity ratio of 0.65 times at the end of 2013. If the firms total
debt at year-end was $5 million, how much equity does Wills Wheels
have? $7.69 million $5 million $0.65 million $3.25 million Which of
these is the term for portfolios with the highest return possible for each
risk level? Total portfolios Modern portfolios Optimal portfolios
Efficient portfolios What are the tools available for the manager in
financial planning? Delaying disbursement of cash, reducing collection
period, cash management, and Increasing inventory turnover Reducing
collection period and delaying disbursement of cash Increasing
inventory turnover and reducing collection period Delaying
disbursement of cash and cash management Suppose that Model Nails,
Inc.s capital structure features 60 percent equity, 40 percent debt, and
that its before-tax cost of debt is 6 percent, while its cost of equity is 10
percent. If the appropriate weighted average tax rate is 28 percent, what
will be Model Nails WACC? 7.73 percent 8.40 percent 8.00 percent
16.00 percent We commonly measure the risk-return relationship using
which of the following? Coefficient of variation Standard deviation
Expected returns Correlation coefficient Financial plans include which
of the following? Schedule of Sales, Expenses, and Capital Expenditure
All of the above Short Term and Long Term Plan Pro forma Income
Statement, Balance Sheet Which of the following terms means that
during periods when interest rates change substantially, bondholders
experience distinct gains and losses in their bond investments? Interest
rate risk Credit quality risk Reinvestment rate risk Liquidity rate risk
What are reasons for the firm to go abroad? Access to raw materials
Diversification Lower production cost All of the above Which of these
statements is true regarding divisional WACC? Using a simple firmwide
WACC to evaluate new projects would give an unfair advantage to
projects that present more risk than the firms average beta. Using a
divisional WACC versus a WACC for the firms current operations will
result in quite a few incorrect decisions. Using a firmwide WACC to
evaluate new projects would have no impact on projects that present less
risk than the firms average beta. Using a simple firmwide WACC to
evaluate new projects would give an unfair advantage to projects that
present less risk than the firms average beta. The Rule of 72 is a simple
mathematical approximation for__________. the number of years
required to double an investment the payments required to double an
investment the present value required to double an investment the
number of years required to double an investment the future value
required to double an investment We can estimate a stocks value
by__________. using the book value of the total stockholder equity
section using the book value of the total assets divided by the number of
shares outstanding discounting the future dividends and future stock
price appreciation compounding the past dividends and past stock price
appreciation Which of these is the process of estimating expected future
cash flows of a project using only the relevant parts of the balance sheet
and income statements? Substitutionary analysis Incremental cash flows
Cash flow analysis Pro forma analysis Five years ago, Jane invested
$5,000 and locked in an 8 percent annual interest rate for 25 years
(ending 20 years from now). James can make a 20-year investment
today and lock in a 10 percent interest rate. How much money should he
invest now in order to have the same amount of money in 20 years as
Jane? $7,346.64 $5,089.91 $3,160.43 $3,464.11 The overall goal of the
financial manager is to__________. maximize net income maximize
earnings per share maximize shareholder wealth minimize total costs
Which of the following can create ethical dilemmas between corporate
managers and stockholders? Auditors Board of directors Agency
relationship Venture Capitalist A firm is expected to pay a dividend of
$2.00 next year and $2.14 the following year. Financial analysts believe
the stock will be at their target price of $75.00 in two years. Compute the
value of this stock with a required return of 10 percent. $79.14 $65.40
$65.57 $66.67 Which financial statement shows the total revenues that a
firm earns and the total expenses the firm incurs to generate those
revenues over a specific period of time generally one year? Statement
of cash flows Statement of retained earnings Balance sheet Income
statement Which of the following is a true statement? If interest rates
fall, all bonds will enjoy rising values. If interest rates fall, corporate
bonds will have decreasing values. If interest rates fall, no bonds will
enjoy rising values. If interest rates fall, U.S. Treasury bonds will have
decreasing values.

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FIN 370 Week 1 Calculating Ratios Worksheet (2 Set)


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This Tutorial contains 2 Set of Answers FIN 370 Week 1 Calculating


Ratios Worksheet 1. What is agency theory? How can setting the
appropriate goals for the firm minimize the agency problem? 2.
Differentiate between profit maximization and wealth
maximization. 3.Why must organizations focus on both shareholder
wealth and the stakeholders? 4. Differentiate between the three
financial statements with which managers should be familiar. How are
they linked?

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FIN 370 Week 1 Calculating Ratios Worksheet (2 Set)


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This Tutorial contains 2 Set of Answers FIN 370 Week 1 Calculating


Ratios Worksheet 1. What is agency theory? How can setting the
appropriate goals for the firm minimize the agency problem? 2.
Differentiate between profit maximization and wealth
maximization. 3.Why must organizations focus on both shareholder
wealth and the stakeholders? 4. Differentiate between the three
financial statements with which managers should be familiar. How are
they linked?

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FIN 370 Week 1 Question and Problem Sets (Ch 1: Q


3,11 Ch 2: Q4,9, CH 3: Q4,7, Ch 4: Q 1,6)
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Question-and-Problem-Sets--(Ch-1:-Q-3,11--Ch-2:-Q4,9,-
CH-3:-Q4,7,-Ch-4:-Q-1,6)
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Purpose of Assignment Complete the following Questions and Problems


(Concepts and Critical Thinking Questions for Ch. 1 Only) from each
chapter as indicated. Show all work and analysis. Prepare in Microsoft
Excel or Word. Ch. 1: Questions 3 & 11 (Concepts Review and
Critical Thinking Questions section) Ch. 2: Questions 4 & 9
(Questions and Problems section): Microsoft Excel template
provided for Problem 4. Ch. 3: Questions 4 & 7 (Question and
Problems section) Ch. 4: Questions 1 & 6 (Questions and Problems
section): Microsoft Excel template provided for Problem 6. Format
your assignment consistent with APA guidelines if submitting in
Microsoft Word. Click the Assignment Files tab to submit your
assignment. Ch. 1: Questions 3 & 11 (Concepts Review and Critical
Thinking Questions section) 3. Corporations [LO3] What is the primary
disadvantage of the corporate form of organization? Name at least two
advantages of corporate organization. 11. Goal of the Firm [LO2]
Evaluate the following statement: Managers should not focus on the
current stock value because doing so will lead to an overemphasis on
short-term profits at the expense of long-term profits. Ch. 2: Questions 4
& 9 (Questions and Problems section): Microsoft Excel template
provided for Problem 4. Building an Income Statement [LO1] Billys
Exterminators, Inc., has sales of $817,000, costs of $343,000,
depreciation expense of $51,000, interest expense of $38,000, and a tax
rate of 35 percent. What is the net income for this firm? 3. Dividends
and Retained Earnings [LO1] Suppose the firm in Problem 2 paid out
$95,000 in cash dividends. What is the addition to retained earnings? 4.
Per-Share Earnings and Dividends [LO1] Suppose the firm in Problem 3
had 90,000 shares of common stock outstanding. What is the earnings
per share, or EPS, figure? What is the dividends per share figure? 9.
Calculating Additions to NWC [LO4] The 2014 balance sheet of Steelo,
Inc., showed current assets of $4,630 and current liabilities of $2,190.
The 2015 balance sheet showed current assets of $5,180 and current
liabilities of $2,830. What was the companys 2015 change in net
working capital, or NWC? Ch. 3: Questions 4 & 7 (Question and
Problems section) 4. Calculating Inventory Turnover [LO2] The Green
Corporation has ending inventory of $417,381, and cost of goods sold
for the year just ended was $4,682,715. What is the inventory turnover?
The days sales in inventory? How long on average did a unit of
inventory sit on the shelf before it was sold? 7. DuPont Identity [LO4] If
Roten Rooters, Inc., has an equity multiplier of 1.15, total asset turnover
of 2.10, and a profit margin of 6.1 percent, what is its ROE? Ch. 4:
Questions 1 & 6 (Questions and Problems section): Microsoft Excel
template provided for Problem 6. 1. Pro Forma Statements [LO1]
Consider the following simplified financial statements for the Yoo
Corporation (assuming no income taxes): 6. Calculating Internal Growth
[LO3] The most recent financial statements for Schenkel Co. are shown
here: Assets and costs are proportional to sales. Debt and equity are not.
The company maintains a constant 30 percent dividend payout ratio.
What is the internal growth rate?

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FIN 370 Week 2 Cash Flow Problem Sets (5-1,5-3,5-5,5-


7,5-12,5-15,5-39)
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39)
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FIN 370 Week 2 Cash Flow Problem Sets Complete the following
problem sets from Chapter 5 in Microsoft Excel: 5-1 5-3 5-5
5-7 5-12 5-15 5-39 (Calculate monthly payment
only) 5-1FutureValue Compute the future value in year 9 of a $2,000
deposit in year 1 and another $1,500 deposit at the end of year 3 using a
10 percent interest rate. 5-3 Future Value of an Annuity What is the
future value of a $900 annuity payment over five years if interest rates
are 8 percent? 5-5 Present Value Compute the present value of a $2,000
deposit in year 1 and another $1,500 deposit at the end of year 3 if
interest rates are 10 percent. 5-7 Present Value of an Annuity Whats the
present value of a $900 annuity payment over five years if interest rates
are 8 percent? 5-12 Present Value of an Annuity Due If the present value
of an ordinary, 6-year annuity is $8,500 and interest rates are 9.5
percent, whats the present value of the same annuity due? 5-15Effective
Annual Rate A loan is offered with monthly payments and a 10 percent
APR. Whats the loans effective annual rate (EAR)? 5-39 Loan
Payments You wish to buy a $25,000 car. The dealer offers you a 4-year
loan with a 9 percent APR. What are the monthly payments? How would
the payment differ if you paid interest only? What would the
consequences of such a decision be?

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FIN 370 Week 2 Financial Markets and Institutions


Report (2 Papers)
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This Tutorial contains 2 Papers FIN 370 Week 2 Financial Markets and
Institutions Report Create a 1,050-word report, and include the
following: Describe the role of the financial institutions and
financial markets in our economy Differentiate between primary
and secondary markets. Differentiate between money and capital
markets. Format your assignment consistent with APA guidelines.

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FIN 370 Week 2 Question and Problem Sets (Ch 5:


Q3,Q4 Ch 6: Q2, Q20, Ch 7 : Q3,Q11 Ch 8: Q1,Q6)
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Question-and-Problem-Sets--(Ch-5:-Q3,Q4--Ch-6:-Q2,-
Q20,-Ch-7-:-Q3,Q11--Ch-8:-Q1,Q6)
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Prepare in Microsoft Excel or Word. Ch. 5: Questions 3 & 4


(Question and Problems section): Microsoft Excel templates
provided for Problems 3 and 4 Ch. 6: Questions 2 & 20
(Questions and Problems section) Ch. 7: Questions 3 &11
(Questions and Problems section) Ch. 8: Questions 1 & 6
(Questions and Problems section): Microsoft Excel template
provided for Problem 6 Format your assignment consistent with APA
guidelines if submitting in Microsoft Word. Click the Assignment Files
tab to submit your assignment. Ch. 5: Questions 3 & 4 (Question and
Problems section): 3. Calculating Present Values [LO2] For each of the
following, compute the present value: 4. Calculating Interest Rates
[LO3] Solve for the unknown interest rate in each of the following: Ch.
6: Questions 2 & 20 (Questions and Problems section) 2. Present Value
and Multiple Cash Flows [LO1] Investment X offers to pay you $4,700
per year for eight years, whereas Investment Y offers to pay you $6,700
per year for five years. Which of these cash flow streams has the higher
present value if the discount rate is 5 percent? If the discount rate is 15
percent? 20. Calculating Loan Payments [LO2, 4] You want to buy a
new sports coupe for $79,500, and the finance office at the dealership
has quoted you an APR of 5.8 percent for a 60-month loan to buy the
car. What will your monthly payments be? What is the effective annual
rate on this loan? Ch. 7: Questions 3 &11 (Questions and Problems
section) 3. Valuing Bonds [LO2] Even though most corporate bonds in
the United States make coupon payments semiannually, bonds issued
elsewhere often have annual coupon payments. Suppose a German
company issues a bond with a par value of 1,000, 23 years to maturity,
and a coupon rate of 5.8 percent paid annually. If the yield to maturity is
4.7 percent, what is the current price of the bond? Excel Sheet 11.
Valuing Bonds [LO2] Union Local School District has a bond
outstanding with a coupon rate of 3.7 percent paid semiannually and 16
years to maturity. The yield to maturity on this bond is 3.9 percent, and
the bond has a par value of $5,000. What is the price of the bond? Ch.
8: Questions 1 & 6 (Questions and Problems section): Microsoft
Excel template provided for Problem 6 1. Stock Values [LO1] The
JacksonTimberlake Wardrobe Co. just paid a dividend of $1.95 per
share on its stock. The dividends are expected to grow at a constant rate
of 4 percent per year indefinitely. If investors require a return of 10.5
percent on The JacksonTimberlake Wardrobe Co. stock, what is the
current price? What will the price be in three years? In 15 years? 6.
Stock Valuation [LO1] Suppose you know that a companys stock
currently sells for $63 per share and the required return on the stock is
10.5 percent. You also know that the total return on the stock is evenly
divided between a capital gains yield and a dividend yield. If its the
companys policy to always maintain a constant growth rate in its
dividends, what is the current dividend per share?

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FIN 370 Week 3 Assignment Financial Ratio analysis


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Purpose of Assignment Students should understand how to use the


financial information and tools learned in the class on a public company,
obtain public company SEC reports, and use that data to calculate a
company's financial ratios and their comparison to industry or
competitor standards. Assignment Steps Resources: Tutorial help on
Excel and Word functions can be found on the MicrosoftOffice
website. There are also additional tutorials via the web that offer support
for office products. Select one of the publicly traded corporations listed
below and obtain the most current SEC Form 10-K (annual financial
report) from the company's web site (Do not use the Annual Report that
is sent to shareholders): Lowes Corporation Kroger Corporation
Harley Davidson Corporation Apple Corporation Intel
Corporation Marriott Corporation Berkshire Hathaway
Corporation PepsiCo Corporation Procter and Gamble
Corporation General Electric Corporation Calculate and analyze the
following ratios for your selected company for the last two years from
the SEC Form 10-K: Current Ratio Inventory Turnover Debt Ratio
Time Interest Earned Gross Profit Margin Equity
Multiplier Return on Assets Net Profit Margin Return on
Equity (Use three ratio DuPont method) Compare and contrast your
company's ratios to industry and competitor standard ratios obtained
from Yahoo Finance, Morningstar, MotleyFool, Macroaxis or other
Internet sources, and provide a detailed answer and analysis as to why
your company's ratios are different than the industry/competitor
standard. Prepare your analysis in a minimum of 875 words in
Microsoft Word. The use of MicrosoftWord tables is encouraged.
Cite the source of the industry/competitor ratio information. Format your
assignment consistent with APA guidelines. Click the Assignment Files
tab to submit your assignment. Note: Grades are awarded based upon
individual contributions to the Learning Team assignment. Each
Learning Team member receives a grade based upon his/her
contributions to the team assignment. Not all students may receive the
same grade for the team assignment.

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FIN 370 Week 3 Individual AssingmentRisk and Return


Analysis Report (2 Papers)
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This tutorial contains 2 Papers FIN 370 Week 3 Risk and Return
Analysis Create a 1,050-word report, and include the following:
Explain the relationship between risk and return Identify an
example of risk and return. Explain which is more risky bonds or
common stocks. Explain how understanding risk and return will
help you in future business ventures. Format your assignment consistent
with APA guidelines. Click the Assignment Files tab to submit your
assignment.

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FIN 370 Week 3 Question and Problem Sets (Ch 9: Q7 &


Q8, Ch 10: Q3& Q13, Ch 11: Q 1 & Q7)
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Question-and-Problem-Sets--(Ch-9:-Q7-,-Q8,-Ch-10:-
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repare in Microsoft Excel or Word. Ch. 9: Questions 7 & 8


(Questions and Problems section) Ch. 10: Questions 3 & 13 (Questions
and Problems section) Ch. 11: Questions 1 & 7 (Questions and
Problems section) Format your assignment consistent with APA
guidelines if submitting in Microsoft Word. Click the Assignment Files
tab to submit your assignment. Ch. 9: Questions 7 & 8 (Questions and
Problems section) 7. Calculating IRR [LO5] A firm evaluates all of its
projects by applying the IRR rule. If the required return is 14 percent,
should the firm accept the following project? 8. Calculating NPV [LO1]
For the cash flows in the previous problem, suppose the firm uses the
NPV decision rule. At a required return of 11 percent, should the firm
accept this project? What if the required return is 24 percent? Ch. 10:
Questions 3 & 13 (Questions and Problems section) 3. Calculating
Projected Net Income [LO1] A proposed new investment has projected
sales of $635,000. Variable costs are 44 percent of sales, and fixed costs
are $193,000; depreciation is $54,000. Prepare a pro forma income
statement assuming a tax rate of 35 percent. What is the projected net
income? 13. Project Evaluation [LO1] Dog Up! Franks is looking at a
new sausage system with an installed cost of $540,000. This cost will be
depreciated straight-line to zero over the projects five-year life, at the
end of which the sausage system can be scrapped for $80,000. The
sausage system will save the firm $170,000 per year in pretax operating
costs, and the system requires an initial investment in net working
capital of $29,000. If the tax rate is 34 percent and the discount rate is 10
percent, what is the NPV of this project? Ch. 11: Questions 1 & 7
(Questions and Problems section) 1. Calculating Costs and Break-Even
[LO3] Night Shades, Inc. (NSI), manufactures biotech sunglasses. The
variable materials cost is $9.64 per unit, and the variable labor cost is
$8.63 per unit. a. What is the variable cost per unit? b. Suppose NSI
incurs fixed costs of $915,000 during a year in which total production is
215,000 units. What are the total costs for the year? c. If the selling price
is $39.99 per unit, does NSI break even on a cash basis? If depreciation
is $465,000 per year, what is the accounting break-even point? 7.
Calculating Break-Even [LO3] In each of the following cases, calculate
the accounting break-even and the cash break-even points. Ignore any
tax effects in calculating the cash break-even.

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FIN 370 Week 3 Risk and Return Problem Sets (7-21,7-


27,8-19,8-21,9-33)
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Risk-and-Return-Problem-Sets-(7-21,7-27,8-19,8-21,9-
33)
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FIN 370 Week 3 Risk and Return Problem Sets Complete the following
problem sets from Chapter 7 in Microsoft Excel: 7-21 7-27
Complete the following problem sets from Chapter 8 in Microsoft
Excel: 8-19 8-21 Complete the following problem sets from
Chapter 9 in Microsoft Excel: 9-33 Click the Assignment Files
tab to submit your assignment. Complete the following problem sets
from Chapter 7 in Microsoft Excel: 7-21 Compute Bond Price
Compute the price of a 3.8 percent coupon bond with 15 years left to
maturity and a market interest rate of 6.8 percent. (Assume interest
payments are semiannual.) Is this a discount or premium bond? 7-27
Yield to Maturity A 5.65 percent coupon bond with 18 years left to
maturity is offered for sale at $1,035.25. What yield to maturity is the
bond offering? (Assume interest payments are semiannual.) Complete
the following problem sets from Chapter 8 in Microsoft Excel:
8-19 Value a Constant Growth Stock Financial analysts forecast
Safeco Corp.s (SAF) growth rate for the future to be 8 percent. Safecos
recent dividend was $0.88. What is the value of Safeco stock when the
required return is 12 percent? 8-21 Expected Return Ecolap Inc.
(ECL) recently paid a $0.46 dividend. The dividend is expected to grow
at a 14.5 percent rate. At a current stock price of $44.12, what is the
return shareholders are expecting? Complete the following problem sets
from Chapter 9 in Microsoft Excel: 9-33 Risk, Return, and
Their Relationship Consider the following annual returns of Estee
Lauder and Lowes Companies (Table Attached)

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FIN 370 Week 3 Team Assignment Precision Machines


Part 1 (annotated bibliography and excel calculation)
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Team-Assignment-Precision-Machines-Part-1--
(annotated-bibliography-and-excel-calculation)
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This Tutorial contains both annonated bibliography and excel file FIN
370 Week 3 Team Assignment Precision Machines Part 1 Precision
Machines is preparing a financial plan for the next six months to
determine the financial needs of the company. The historical analysis of
the companys sales shows that the companys total sales are 30% cash
sales and 70% credit sales. Further analysis of credit sales shows that the
company receives 50% of the credit sales one month after the sale and
the remaining 50% in the second month after the sale. This means the
cash collections from sales are 30% in the first month of the sale, 35% in
the second month, and 35% in the third month. The materials purchased
by the company amounts to 50% of the sales for the month. The
company pays for the purchases one month after the initial purchase.
The company likes to maintain a cash balance of $5,000. The cost of
borrowing is 10%. The company plans to pay off the loan whenever
there is a surplus and borrow when there is a deficit. The attached
spreadsheet shows revenues (sales), expenses, capital expenditures, and
other expenses for Precision Machines next six months. Using the
information given on the spreadsheet, prepare a cash budget for January
through June and determine the cash surplus, deficit, and the financing
needs of the company. Note: There are two parts to this learning team
assignment; Part 2 will be completed in Week 5. Review the Learning
Team Assignment due in Week 5. Create an outline for the essay.
Develop a 700-word annotated bibliography using at least 3 resources.
Format your paper consistent with APA guidelines. Click the Assignment
Files tab to submit your assignment.

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FIN 370 Week 4 Cash Flow AnalysisFrank Smith


Plumbing (calculation and 2 Papers)
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This tutorial includes both calculation and 2 Papers FIN 370 Week 4
Cash Flow Analysis Analyze the case study, Frank Smith Plumbing.
Analyze the Frank Smith Plumbings Financial Statement spreadsheet.
Compare the cost of the truck to the cash flow records Compile your
calculations in a Microsoft Excel document Develop a 1,050-word
analysis and include the following: Explain why limited leverage is
good for business.Show the profitability of the project so that Stephanie
can convince her father to purchase the truck by borrowing money.
Explain how Stephanie should convince her mother that it is
inappropriate to call the bank manager and his wife for assistance in
getting the loan approval? Analyze whether the investment in the truck
is profitable. Explain whether it is more beneficial for Frank to close
his business. Explain what you would do in this same situation. Format
your assignment consistent with APA guidelines. Click the Assignment
Files tab to submit your assignments.

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FIN 370 Week 5 Team Assignment Precision Machines


Part 2 (Cash Budget and Strategic Analysis)
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Team-Assignment-Precision-Machines-Part-2--(Cash-
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FIN 370 Week 5 Precision Machines Part 2 Note: There are two parts to
this learning team assignment; Part 1 was completed in Week 3. Review
the Precision Machines document and spreadsheet. Prepare a cash
budget for Precision Machines in Microsoft Excel. Create a 1,225-
word strategic analysis and include the following: Recommend a
cash management strategy for the company that will minimize the
financing cost and increase the cash flows for the company. Explain
two economic and market forces that will impact the financial plan of
this company. Format your documents consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment. Review
the "Precision Machines" document and spreadsheet. Prepare a cash
budget for Precision Machines in Microsoft Excel. Precision
Machines

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