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FIN 571 Final Exam Guide (3 Set with Excel File)
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This Tutorial also contains 2 other sets This tutorial contains 3 set of final along with excel file which can be used to solve question in case value changes 1.Which one of the following parties is considered a stakeholder of a firm? 2.The process of planning and managing a firm’s long-term assets is called: 3. Which one of the following actions by a financial manager creates an agency problem? 4. Which one of these is a cash outflow from a corporation? 5. For each of the following, compute the present value (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.): 6. Gerold invested $115 in an account that pays 5 percent simple interest. How much money will he have at the end of 5 years? 7. What is the future value of $920 a year for 5 years at a 6 percent interest? 8. You bought 360 shares of stock at a total cost of $7,754.40. You received a total of $403.20 in dividends and sold your shares for $19.98 a share. What was your total rate of return? 9. A year ago, you purchased 500 shares of New Tech stock at a price of $49.03 per share. The stock pays an annual dividend of $.10 per share. Today, you sold all of your shares for $58.14 per share. What is your total dollar return on this investment? 10.The financial statement summarizing a firm’s accounting performance over a period of time is the: 11.Which one of these accounts is classified as a current asset on the balance sheet? 12.Net working capital is defined as: 13.Which one of these equations is an accurate expression of the balance sheet? 14. The Purple Martin has annual sales of $4,900, total debt of $1,280, total equity of $2,300, and a profit margin of 5 percent. What is the return on assets? Galaxy United, Inc. 2009 Income Statement What is the return on equity for 2009? 15. A firm has a debt-equity ratio of .35. What is the total debt ratio? 16. Galaxy United, Inc. 2009 Income Statement What is the quick ratio for 2009? 17. Reliable Cars has sales of $3,700, total assets of $3,050, and a profit margin of 5 percent. The firm has a total debt ratio of 41 percent. What is the return on equity? 18. A firm has total debt of $1,480 and a debt-equity ratio of .29. What is the value of the total assets? 19. The sustainable growth rate: 20. If a firm bases its growth projection on the rate of sustainable growth, shows positive net income, and has a dividend payout ratio of 30 percent, then the: 21.Which account is least apt to vary directly with sales? 22. If the Hunter Corp. has an ROE of 14 and a payout ratio of 17 percent, what is its sustainable growth rate?(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 13.15 23. The Wintergrass Company has an ROE of 13.2 percent and a payout ratio of 30 percent. What is the company’s sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 24. The most common means of financing a temporary cash deficit is a: 25.The length of time between the acquisition of inventory by a firm and the payment by the firm for that inventory is called the: 26. Here are the most recent balance sheets for Country Kettles, Inc. Excluding accumulated depreciation, determine whether each item is a source or a use of cash, and the amount. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32
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FIN 571 Final Exam Guide (New)
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1.A proxy fight occurs when: the board of directors disagree on the members of the management team. 2. A stakeholder is any person or entity: 3.Which one of the following is least apt to help convince managers to work in the best interest of the stockholders? threat of a proxy fight pay raises based on length of service implementation of a stock option plan 4.Financial managers primarily create firm value by: maximizing current sales. investing in assets that generate cash in excess of their cost. 5.First City Bank pays 7 percent simple interest on its savings account balances, whereas Second City Bank pays 7 percent interest compounded annually. If you made a $59,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 9 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 12299.09 6.What is the future value of $3,136 invested for 12 years at 6.50 percent compounded annually? 7.What is the present value of $12,750 to be received 3 years from today if the discount rate is 5.50 percent? use this website: http://www.moneychimp.com/calculator/present_value_calculator.htm 8. Six months ago, you purchased 1,200 shares of ABC stock for $21.20 a share and have received total dividend payments of $.60 a share. Today, you sold all of your shares for $22.20 a share. What is your total dollar return on this investment? 9.Six months ago, you purchased 100 shares of stock in ABC Co. at a price of $43.89 a share. ABC stock pays a quarterly dividend of $.10 a share. Today, you sold all of your shares for $45.13 per share. What is the total amount of your capital gains on this investment? 10.Which one of these accounts is classified as a current asset on the balance sheet? 11.Shelton, Inc., has sales of $395,000, costs of $183,000, depreciation expense of $48,000, interest expense of $29,000, and a tax rate of 40 percent. (Do not round intermediate calculations.) What is the net income for the firm? 12.On a balance sheet, deferred taxes are classified as: 13. Which one of these equations is an accurate expression of the balance sheet? 14.Galaxy United, Inc. 2009 Income Statement 15. The Purple Martin has annual sales of $4,600, total debt of $1,230, total equity of $2,500, and a profit margin of 6 percent. What is the return on assets? 16.Galaxy United, Inc. 2009 Income Statement 17.Reliable Cars has sales of $3,850, total assets of $3,350, and a profit margin of 5 percent. The firm has a total debt ratio of 41 percent. What is the return on equity? 18. A firm has net working capital of $344, net fixed assets of $2,292, sales of $6,000, and current liabilities of $800. How many dollars worth of sales are generated from every $1 in total assets? 19.One of the primary weaknesses of many financial planning models is that they: ignore the goals and objectives of senior management. ignore the size, risk, and timing of cash flows. are iterative in nature. rely too much on financial relationships and too little on accounting relationships. ignore cash payouts to stockholders. 20.The external funds needed (EFN) equation projects the addition to retained earnings as: 21.Which account is least apt to vary directly with sales? accounts payable inventory accounts receivable notes payable cost of goods sold 22. The Wintergrass Company has an ROE of 15.1 percent and a payout ratio of 40 percent. What is the company’s sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 23. If the Hunter Corp. has an ROE of 7 and a payout ratio of 15 percent, what is its sustainable growth rate?(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 24.
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FIN 571 Final Exam Guide Set 2 (NEW)
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1. Financial managers should primarily strive to: 2. The process of planning and managing a firm’s long-term assets is called: 3. Which one of the following actions by a financial manager creates an agency problem? 4. Which one of these is a cash outflow from a corporation? 5. For each of the following, compute the present value 6. Gerold invested $115 in an account that pays 5 percent simple interest. How much money will he have at the end of 5 years? 7. What is the future value of $920 a year for 5 years at a 6 percent interest? 8. You bought 360 shares of stock at a total cost of $7,754.40. You received a total of $403.20 in dividends and sold your shares for $19.98 a share. What was your total rate of return? 9. A year ago, you purchased 500 shares of New Tech stock at a price of $49.03 per share. The stock pays an annual dividend of $.10 per share. Today, you sold all of your shares for $58.14 per share. What is your total dollar return on this investment? 10. The financial statement summarizing a firm’s accounting performance over a period of time is the: 11. Which one of these accounts is classified as a current asset on the balance sheet? 12. Net working capital is defined as: 13. Which one of these equations is an accurate expression of the balance sheet? 14. The Purple Martin has annual sales of $4,900, total debt of $1,280, total equity of $2,300, and a profit margin of 5 percent. What is the return on assets? 15. A firm has a debt-equity ratio of .35. What is the total debt ratio? 16. Galaxy United, Inc. 2009 Income Statement ($ in millions) What is the quick ratio for 2009? 17. Reliable Cars has sales of $3,700, total assets of $3,050, and a profit margin of 5 percent. The firm has a total debt ratio of 41 percent. What is the return on equity? 18. A firm has total debt of $1,480 and a debt-equity ratio of .29. What is the value of the total assets? 19. The sustainable growth rate: 20. If a firm bases its growth projection on the rate of sustainable growth, shows positive net income, and has a dividend payout ratio of 30 percent, then the: 21. Which account is least apt to vary directly with sales? 22. If the Hunter Corp. has an ROE of 14 and a payout ratio of 17 percent, what is its sustainable growth rate? 23. The Wintergrass Company has an ROE of 13.2 percent and a payout ratio of 30 percent. What is the company’s sustainable growth rate? 24. The most common means of financing a temporary cash deficit is a: 25. The length of time between the acquisition of inventory and its sale is called the: 26. Here are the most recent balance sheets for Country Kettles, Inc. Excluding accumulated depreciation, determine whether each item is a source or a use of cash, and the amount. 27. Consider the following financial statement information for the Rivers Corporation: Calculate the operating and cash cycles. 28. The nominal rate of return on a bond is 7.28 percent while the real rate is 3.09 percent. What is the rate of inflation? 29. Unique Stores common stock pays a constant annual dividend of $1.75 a share. What is the value of this stock at a discount rate of 13.25 percent? 30. How much are you willing to pay for one share of stock if the company just paid an annual dividend of $1.03, the dividends increase by 3 percent annually, and you require a rate of return of 15 percent? 31. The relationship between nominal rates, real rates, and inflation is known as the: 32.
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FIN 571 Week 1 Connect Problems (Math and Accounting Review)
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FIN 571 Week 1 Connect Problems (Math & Accounting Review) 1. Functions Excel will make your life as a finance student much easier. This section will show how to use various functions in Excel. Once you understand the how and why of a particular financial equation, you can make 1. Which Excel cell entry will calculate the square root of 165? 2. Which statements about Excel’s FV function are correct? 3. Which fields are required to calculate net present value (NPV) in Excel? 4. Which Excel function is used to calculate the amount of each annuity payment? 5. Which fields are required to calculate the rate of return (RATE) for a present value calculation in Excel? 2. The Balance Sheet This lesson will help you refresh your knowledge on the basics of the balance sheet. Brushing up on these concepts now will help you tackle your finance coursework later. General Ledger for XYZ Company. The following is a portion of the general ledger for XYZ Company as of December 31, 20X1, and the statement of stockholders’ equity for XYZ Company for the year ended December 31, 20X1. Use this information to answer questions (1) through (5). 1. What is the total amount of current assets to be reported on XYZ Company’s 12/31/X1 classified balance sheet? 2. What is the total amount of long-term assets to be reported on XYZ Company’s 12/31/X1 classified balance sheet? 3. What is the total amount of current liabilities to be reported on XYZ Company’s 12/31/X1 classified balance sheet? 4. What is the ending balance in retained earnings to be reported on XYZ Company’s 12/31/X1 classified balance sheet? 5. What is the total amount of stockholders’ equity to be reported on XYZ Company’s 12/31/X1 classified balance sheet? 3. Calculating Interest This lesson will help fill in the basics on how to calculate interest when tackling financial problems. 1. What is the amount of interest earned after two years on a $100 deposit paying 4 percent simple interest annually? 2. What is the amount of compound interest earned after three years on a $100 deposit paying 8 percent interest annually? 3. A business just took out a loan for $100,000 at 10% interest. If the business pays the loan off in three months, how much did the business pay in interest? 4. What is the annual percentage yield (APY) for a deposit paying 5 percent interest with monthly compounding? 4.The Income Statement This lesson will help you refresh your knowledge on the basics of the income statement. Brushing up on these concepts now will help you tackle your finance coursework later. General Ledger for ABC Company. The following is the general ledger for ABC Company as of December 31, 20X1. Use this information to answer questions (1) through (4). 1. What is the amount of gross profit to be reported on ABC Company’s 12/31/X1 income statement? 2. What is the amount of operating income (EBIT) to be reported on ABC Company’s 12/31/X1 income statement? 3. What is the amount of earnings before taxes (EBT) to be reported on ABC Company’s 12/31/X1 income statement? 4. What is the amount of net income to be reported on ABC Company’s 12/31/X1 income statement? 5. Fractions and Decimals This lesson will help you review fractions and decimals: calculating, converting, and recognizing how to use them in a financial setting. 1. 54/32 converted to a mixed number is ________. 2. The product of one and four thirty-seconds and twenty thirty-seconds is ________. 3. One and eight thirty-seconds divided by twelve thirty-seconds is ________. the________. 4. In what order are the four primary financial statements prepared? 5. The difference between net income and dividends paid is known as what?
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FIN 571 Week 1 Connect Problems (Week 1 Problem Set)
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FIN 571 Week 1 Connect Problems (Week 1 Problem Set) 1.The ultimate control of a corporation lies in the hands of the corporate: president. board of directors. chairman of the board. chief executive officer. stockholders. 1. (Set 2) If a firm is currently profitable, then: it will always have sufficient cash to pay its bills in a timely manner. the timing of the cash flows on proposed projects is irrelevant. its current cash inflows must exceed its current cash outflows. its cash flows are known with certainty. its reported sales exceed its costs. 2.Which one of these is a cash outflow from a corporation? sale of an asset dividend payment profit retained by the firm sale of common stock issuance of debt 2.(Set 2) Short-term finance deals with: acquiring and selling fixed assets. financing long-term projects. capital budgeting. 3.For a firm to create value it must: avoid the issuance of debt securities. have a greater cash inflow from its stockholders than its outflow to them. avoid payments to the government so dividends can be increased. 3.(Set 2) A stakeholder is any person or entity: owning shares of stock of a corporation. to whom the firm currently owes money. that initially started a firm and currently has management control over that firm. owning bonds or other long-term debt issued by a corporation. other than a stockholder or creditor who potentially has a financial interest in the firm. 4.If a firm is currently profitable, then: its cash flows are known with certainty. its reported sales exceed its costs. the timing of the cash flows on proposed projects is irrelevant. it will always have sufficient cash to pay its bills in a timely manner. its current cash inflows must exceed its current cash outflows. 4.(Set 2)Which one of these best fits the description of an agency cost? increasing the dividend payments per share the benefits received from reducing production costs per unit the payment of interest on a firm’s debts the payment of corporate income taxes the payment required for an outside audit of the firm 5.The primary goal of financial management is to: maximize current dividends per share of the existing stock. avoid financial distress. minimize operational costs and maximize firm efficiency. maximize the current value per share of the existing stock. maintain steady growth in both sales and net earnings. 6.Which one of the following business types is best suited to raising large amounts of capital? limited partnership corporation sole proprietorship limited liability company general partnership 7.Accounting profits and cash flows are generally: the same since accounting profits reflect when cash flows occur. different because of GAAP rules regarding the recognition of income. different because cash inflows must occur before revenue recognition. the same since they reflect current laws and accounting standards. the same due to the requirements of GAAP. 8.One year ago, you invested $2,690. Today it is worth $3,800.50. What rate of interest did you earn? 8. (Set 2) Your credit card company charges you 1.00 percent per month. What is the annual percentage rate on your account? 9. (Set 1) What is the future value of $920 a year for 5 years at a 6 percent interest? 9. (Set 2) Your credit card company charges you 1.00 percent per month. What is the annual percentage rate on your account? 10.You just paid $361,000 for an annuity that will pay you and your heirs $12,300 a year forever.
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What is ethics? If you follow all applicable rules and regulations, are you an ethical person?
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Assume that interest rates have increased substantially. Would this tend to increase or decrease
the market value (meaning the price an investor in the firm’s paper is willing to pay) of a firm’s liabilities (relative to the book value of liabilities)?
This question is referring to a firm’s liability such as a bond or debenture that has been issued in the markets. What happens to the price an investor who is looking to purchase that bond or debenture is willing to pay if the market interest rate increases above the rate that the bond or debenture pays.
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FIN 571 Week 1 Financial Ratio Analysis
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Purpose of Assignment The purpose of this assignment is to help students gain a better understanding of the financial statements used for corporate financial reporting and the key ratios used to make business decisions. Assignment Steps Select a Fortune 500 Company from one of the following industries: • Pharmaceutical • Energy • Retail • Automotive • Computer Hardware Review the balance sheet and income statement in the company’s 2015 Annual Report. Calculate the following ratios using Microsoft® Excel®: • Current Ratio • Quick Ratio • Debt Equity Ratio • Inventory Turnover Ratio • Receivables Turnover Ratio • Total Assets Turnover Ratio • Profit Margin (Net Margin) Ratio • Return on Assets Ratio Analyze in 1,050 words why each ratio is important for financial decision making. Submit your analysis as well as your calculations. Click the Assignment Files tab to submit your assignment.
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FIN 571 Week 1 Individual Assignment Business Structures
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Watch the “Your Business Structure” and “Corporate Business Structures” videos on the Electronics Reserve Readings page.
Identify the different business structures.
Write a 350 to 700 word explanation of how each business structure might and might not be advantageous.
Click the Assignment Files tab to submit your assignment.
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FIN 571 Week 2 Connect Problems
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FIN 571 Week 2 Connect Problems 1.Sankey, Inc., has current assets of $4,230, net fixed assets of $25,700, current liabilities of $3,500, and long-term debt of $14,400. What is the value of the shareholders’ equity account for this firm? 2.Which one of the following assets is generally the most liquid? 3.Which one of the following accounts is included in stockholders’ equity? 4.It is easier to evaluate a firm using its financial statements when the firm: 5.Which one of these accounts is classified as a current asset on the balance sheet? 6.Sankey, Inc., has current assets of $4,500, net fixed assets of $23,500, current liabilities of $2,750, and long-term debt of $12,900. What is the value of the shareholders’ equity account for this firm? 7.Shelton, Inc., has sales of $396,000, costs of $184,000, depreciation expense of $49,000, interest expense of $30,000, and a tax rate of 35 percent. What is the net income for the firm? 8.During the year, the Senbet Discount Tire Company had gross sales of $1.12 million. The firm’s cost of goods sold and selling expenses were $531,000 and $221,000, respectively. The firm also had notes payable of $860,000. These notes carried an interest rate of 6 percent. Depreciation was $136,000. The firm’s tax rate was 40 percent. a. What was the firm’s net income? b. What was the firm’s operating cash flow? 9.Use the following information for Ingersoll, Inc., (assume the tax rate is 35 percent): a. Prepare an income statement for this company for 2014 and 2015. b. Prepare the balance sheet for this company for 2014 and 2015. 10.Jessica’s Boutique has cash of $54, accounts receivable of $52, accounts payable of $220, and inventory of $160. What is the value of the quick ratio? 11.Al’s Sport Store has sales of $3,020, costs of goods sold of $2,020, inventory of $523, and accounts receivable of $448. How many days, on average, does it take the firm to sell its inventory assuming that all sales are on credit? 12.Which statement expresses all accounts as a percentage of total assets? 13.The inventory turnover ratio is measured as: 14.The total asset turnover ratio measures the amount of: 15.A firm has a debt-equity ratio of .44. What is the total debt ratio? 16.A firm has total debt of $1,340 and a debt-equity ratio of .27. What is the value of the total assets? 17.A firm has a total debt ratio of .47. This means the firm has 47 cents in debt for every: 18.Which one of the following sets of ratios would generally be of the most interest to stockholders? 19.Ratios that measure how efficiently a firm’s management uses its assets and equity to generate bottom line net income are known as _______ ratios. 20.The higher the inventory turnover, the: 21.The debt-equity ratio is measured as: 22.The Purple Martin has annual sales of $4,600, total debt of $1,220, total equity of $2,300, and a profit margin of 6 percent. What is the return on assets? 23.Galaxy United, Inc. 2009 Income Statement($ in millions). What is the return on equity for 2009? 24.If Wilkinson, Inc., has an equity multiplier of 1.57, total asset turnover of 1.7, and a profit margin of 6.7 percent, what is its ROE? 25.The financial ratio measured as net income divided by sales is known as the firm’s: 26.The financial ratio that measures the accounting profit per dollar of book equity is referred to as the: 27.Puffy’s Pastries generates five cents of net income for every $1 in equity. Thus, Puffy’s has _______ of 5 percent. 28.If stockholders want to know how much profit the firm is making on their entire investment in that firm, the stockholders should refer to the: 29.The most effective method of directly evaluating the financial performance of a firm is to compare the financial ratios of the firm to: 30.Which one of these equations is an accurate expression of the balance sheet? 31.The financial statement summarizing a firm’s accounting performance over a period of time is the:
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In order to receive proper credit, please reply to this message when posting your answers to WK2 DQ1.
Suppose you own $1 million worth of 30-year Treasury bonds. Is this asset riskless?·
You own $1 million worth of 90-day Treasury bills. You “roll over” this investment every 90 days by reinvesting the proceeds in another issue of 90-day Treasury bills. Is this investment riskless?·
- Can you think of an asset that is truly riskless?
· ====================================================FIN 571 Week 2 DQ 2
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Suppose rf is 5% and rM is 10%. According to the SML and the CAPM, an asset with a beta of −2.0
has a required return of negative 5% [= 5 − 2(10 − 5)]. Can this be possible? Does this mean that
the asset has negative risk? Why would anyone ever invest in an asset that has an expected and
required return that is negative? Explain
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FIN 571 Week 2 Individual Assignment Business Structure Advice
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Write a 350 to 700 word response to the following e-mail:
Dear Consultant,
I am currently starting a business and developing my business plan. I’m in need of some advice on how to start forming my business. I am not sure exactly how it will be financed and whether or not I want to take on partners. I am interested and willing to learn the intricacies of my options to determine how to best proceed with my plan.
Please advise on what my options are, the advantages and disadvantages of each, and possible tax consequences for each scenario?
Respectfully,
John Owner
Click the Assignment Files tab to submit your assignment.
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FIN 571 Week 2 Individual Assignment Ethics and Finance
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The Sarbanes-Oxley Act of 2002 (SOX) was passed as the result of the Enron scandal and other instances of accounting fraud. This act was passed to strengthen the role of the Securities and Exchange Commission (SEC). Research a case of corporate financial abuse related to the Sarbanes-Oxley Act of 2002 and apply this to your current work or desired place of employment. Create a 1,400-word analysis of the application of SOX in which you include the following: Discuss the mistakes made by the company and their leadership. Discuss the steps leadership could have taken to prevent or mitigate the repercussions. Explain the role of market pressures on unethical behavior. Examine the influence of the basics of finance and how the Sarbanes-Oxley Act of 2002 changed things. Evaluate the influence of Sarbanes-Oxley Act on ethical behavior. Are businesses more ethical since the enactment? Explain the changes companies needed to make in how they use and present financial statements. Discuss how SOX has affected your current place of employment if at all, and if not, how it has affected others in the same industry. Cite a minimum of 2 scholarly sources. Format your paper consistent with APA guidelines. Click the Assignment Files tab to submit your assignment.
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FIN 571 Week 2 Individual Assignment Ratio Analysis Problems
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Ratio Analysis
(Individual Assignment)
You may use excel or word.doc format for this assignment.
Please post your homework as a word.doc or excel file in the class discussion section below by the due date.
1. Analysis of cost of goods sold problem.
1992 1993 1994
Gross Profit Margin 60% 55% 51%
What is happening to cost of goods sold? As was done in the week 2 online lecture on ratio analysis, please assume sales of 1 dollar each year as you do your analysis. This problem follows the process shown in the Week 2 Ratio Analysis online lecture section titled: “Another Income Statement Analytical Approach: Percent of Sales”
(5 points)
2. Overhead (or Sales, General and Administrative Expense) problem.
1992 1993 1994
Gross Profit Margin 40% 39% 41%
Operating Margin (NOI/Sales) 15% 10% 5%
What is happening to S,G and A (or overhead expenses)? Please set up an illustration assuming sales of 1.00 dollar each year just as you did in problem number one.
(5 points)
3. Balance Sheet Problem
1992 1993 1994
Annual Sales Growth (over prior yr) + 1% 0% +1%
Current Ratio 3.5X 2X 1.2X
Average Collection Period 25 days 30 days 55 days
What is happening to liquidity? Why? What are some follow-up questions your would ask? (5 points)
4. Using the data provided below, which is the better managed company? Why? Please support your answers by calculating appropriate ratios. (5 points)
Company A Company B
Sales 10 million dollars 20 million dollars
Net Income 1 million dollars 2 million dollars
Total Assets 10 million dollars 15 million dollars
Click the Assignment Files tab to submit your assignment.
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FIN 571 Week 2 Learning Team Reflection
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Read the Ethics case, “A Sad Tale: The Demise of Arthur Anderson” located in the WileyPLUS Week Fundamentals of Corporate Finance Chapter readings.
Discuss the mistakes made by Arthur Anderson and potential actions that leadership could have taken to prevent the organizational failure.
Write a 350- to 700-word summary of your discussion.
Click the Assignment Files tab to submit your assignment.
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FIN 571 Week 2 Stock Valuation and Analysis
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Assignment Steps Resources: Yahoo Finance Select a Fortune 500 Company from one of the following industries: • Pharmaceutical • Energy • Retail • Automotive • Computer Hardware • Manufacturing • Mining Access Yahoo Finance and enter the company name. Review the financial information and statistics provided for the stock you selected and answer the following: • What is the ticker symbol of the company you chose? • What is the Current Stock Price? • What is the Market Cap for the stock you chose? • What is the Price to Earnings Ratio? • What is the Dividend and Yield? • What is the Enterprise Value? • What is the Beta? • Was there a Stock Split, and if so, when? • What was the closing stock price for the last 5 days? • What was the 52 Week High for this stock? • What is the Book Value per Share? • What type of rating are analysts recommending (i.e. buy, hold, etc.)? • What is the target price analysts are predicting for this stock? • What is the analyst’s average revenue estimate for next year? • What are some of the significant news items and press releases made by the company over the last year? Explain in 700 words why you would or would not recommend investing in this stock. • Describe the relationship between the value of the stock and the price to earnings ratio. • What information does the Market Capitalization (Market Cap) and Beta provide to the investor?
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FIN 571 Week 3 Connect Problems
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FIN 571 Week 3 Connect Problems If the Garnett Corp. has a 15 percent ROE and a 25 percent payout ratio, what is its sustainable growth rate? 1.If the Hunter Corp. has an ROE of 15 and a payout ratio of 18 percent, what is its sustainable growth rate 2.The most recent financial statements for Williamson, Inc., are shown here Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year’s sales are projected to be $8,418. What is the external financing needed? 3.The maximum rate at which a firm can grow while maintaining a constant debt-equity ratio is best defined by its: 4.Financial planning, when properly executed: 5.Projected future financial statements are called: 6.Which account is least apt to vary directly with sales? 7.Which one of the following depicts a correct relationship? 8.One of the primary weaknesses of many financial planning models is that they: 9.In the financial planning model, the external financing needed (EFN) as shown on a pro forma balance sheet is equal to the changes in assets: 10.The external funds needed (EFN) equation projects the addition to retained earnings as: 11.Marcie’s Mercantile wants to maintain its current dividend policy, which is a payout ratio of 35 percent. The firm does not want to increase its equity financing but is willing to maintain its current debt-equity ratio. Given these requirements, the maximum rate at which Marcie’s can grow is equal to: 12.The sustainable growth rate will be equivalent to the internal growth rate when, and only when,: 13.The minimum level of inventory that a firm wants to keep on hand at all times is referred to as: 14.The operating cycle can be decreased by: 15.The cash cycle is defined as the time between: 16.Selling goods and services on credit is: 17.The three components of credit policy are: 18.Given a fixed level of sales and a constant profit margin, an increase in the accounts payable period can result from: 19.On September 1, a firm grants credit with terms of 2/10 net 30. The creditor: 20.The credit period begins on the: 21.When credit is granted to another firm this gives rise to a(n): 22.Since the credit decision usually includes riskier customers, the decision should adjust for this by: 23.Jordan and Sons has an inventory period of 48.6 days, an accounts payable period of 36.2 days, and an accounts receivable period of 29.3 days. Management is considering offering a 5 percent discount if its credit customers pay for their purchases within 10 days. This discount is expected to reduce the receivables period by 17 days. If the discount is offered, the operating cycle will decrease from ___ days to ___ days. 24.Brown’s Market currently has an operating cycle of 76.8 days. It is planning some operational changes that are expected to decrease the accounts receivable period by 2.8 days and decrease the inventory period by 3.1 days. The accounts payable turnover rate is expected to increase from 9 to 11.5 times per year. If all of these changes are adopted, what will be the firm’s new operating cycle? 25.On average, D & M sells its inventory in 37 days, collects on its receivables in 3.4 days, and takes 35 days to pay for its purchases. What is the length of the firm’s operating cycle? 26.A firm has an inventory turnover rate of 15.7, a receivables turnover rate of 20.2, and a payables turnover rate of 14.6. How long is the cash cycle?
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FIN 571 Week 3 Individual Assignment Interpreting Financial Results
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Resource: Financial Statements for the company assigned by your instructor in Week 2.
Review the assigned company’s financial statements from the past three years.
Calculate the financial ratios for the assigned company’s financial statements, and then interpret those results against company historical data as well as industry benchmarks:
- Compare the financial ratios with each of the preceding three (3) years (e.g. 2014 with 2013; 2013 with 2012; and 2012 with 2011).
- Compare the calculated financial ratios against the industry benchmarks for the industry of your assigned company.
Write a 500 to 750 word summary of your analysis.
Show financial calculations where appropriate.
Click the Assignment Files tab to submit your assignment.
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FIN 571 Week 3 Learning Team Reflection
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Watch the “Concept Review Video: Working Capital Management” video located in theWileyPLUS Assignment: Week 3 Videos Activity.
Discuss strategies these business owners used to manage their working capital.
Write a 350–700 word summary of your discussion.
Click the Assignment Files tab to submit your assignment.
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FIN 571 Week 3 Researching Industry Financial Statistics
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Purpose of Assignment The purpose of this assignment is to allow the students an opportunity to complete their financial evaluation of a company using the financial research database Plunkett Research Online. Plunkett Research Online provides in-depth analysis of a company’s financials, comparisons to industry averages, a list of top executives, how the company compares to other competitors in terms of revenue, number of employees, market capitalization and other key financial metrics. Assignment Steps Resources: Plunket Research Online located in the Week 3 Electronic Reserve Readings; Microsoft® Excel® Access the the Plunkett Research database in the University Library by following these steps: 1. Click on the University Library link. 2. Click “Company Directories and Financials” under Library Resources. 3. Click “Plunkett Research Online” under Company Directory and Financials. 4. Review the following “HOW TO USE” videos: o Plunkett Research Online Overview o How to Export Company and Exec. Lists o How to Build-a-Report o How to Use Industry Analytics o How to Research an Industry o How to Use Company Profiles 5. Click “Research A Company.” 6. Select a company (i.e. Walmart) and input into the Search Box. 7. Scroll through the search results to choose the correct company. 8. Click the link to the company profile (in blue). Review the Company Profile and answer the following questions in Microsoft® Word: • What is the Ticker Symbol for the company you have selected? • When was the company established? • How many employees does it have? • What is the NAICS Code? • Who is the CEO? • Where does the company rank in terms of Total Revenue when compared to its competitors? • Where does the company rank in terms of Net Income when compared to its competitors? • Where does the company rank in terms of Return on Assets when compared to its competitors? • What is the Revenue in 2014 and 2015? • What was the Gross Margin in 2014 and 2015? • What was the Earnings per Share in 2014 and 2015? Save the Company Profile as a PDF document. Compare the 2015 Company Financials to the Industry Averages and export the results into a Microsoft® Excel® document. Add a new column in your Microsoft® Excel® document titled “Change” and calculate the difference between the company’s 2015 financial results and the industry averages. Explain in 1,050 words how the company you selected compares to the industry averages in terms of financial profitability, liquidity and solvency, and why the difference is important. Also review the financial statements over the last three years, and discuss any positive and negative trends would you report to the company’s management. Submit the calculations as well as the explanation. 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 571 Week 3 Team Assignment Financial Statement Interpretation
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Select three publicly traded companies. Choose one each from the following sectors: manufacturing, service, and retail. At least one of the three companies should be foreign. If possible, choose from among the team members’ places of business or similar industries. Calculate the following: • Current ratio • Quick ratio • Net profit margin • Asset utilization • Financial leverage Analyze the Return on Equity (ROE) for the last 2 years using the DuPont method. Develop a 2,100-word comparison of your three companies in which you include the following: • Discuss the differences in the industries • Discuss the different measurement conventions and how this affects presentations. • Contrast IASB basis for accounting (IFRS) and FASB/GAAP accounting. • Compare the three companies and their strategies for managing their working capital. • Discuss the financial ratios and analyses and what they indicate about the companies and their financial forecast. Incorporate the calculated ratios and analysis into the paper. Include the financial statements for the 3 companies as an appendix to the paper. Cite at least 3 scholarly sources. Format the paper consistent with APA guidelines. Click the Assignment Files tab to submit your assignment.
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FIN 571 Week 3 Using the Payback Method, IRR, and NPV
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The purpose of this assignment is to allow the student to calculate the project cash flow using net present value (NPV), internal rate of return (IRR), and the payback methods. Assignment Steps Resources: Corporate Finance Create a 350-word memo to management including the following: • Describe the use of internal rate of return (IRR), net present value (NPV), and the payback method in evaluating project cash flows. • Describe the advantages and disadvantages of each method. Calculate the following time value of money problems: 1. If you want to accumulate $500,000 in 20 years, how much do you need to deposit today that pays an interest rate of 15%? 2. What is the future value if you plan to invest $200,000 for 5 years and the interest rate is 5%? 3. What is the interest rate for an initial investment of $100,000 to grow to $300,000 in 10 years? 4. If your company purchases an annuity that will pay $50,000/year for 10 years at a 11% discount rate, what is the value of the annuity on the purchase date if the first annuity payment is made on the date of purchase? 5. What is the rate of return required to accumulate $400,000 if you invest $10,000 per year for 20 years. Assume all payments are made at the end of the period. Calculate the project cash flow generated for Project A and Project B using the NPV method. • Which project would you select, and why? • Which project would you select under the payback method? The discount rate is 10% for both projects. • Use Microsoft®Excel®to prepare your answer. • Note that a similar problem is in the textbook in Section 5.1. Sample Template for Project A and Project B: Show all work. Submit the memo and all calculations
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FIN 571 Week 4 Assignment Rate of Return for Stocks and Bonds
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The purpose of this assignment is to allow the student an opportunity to calculate the rate of return of equity and debt instruments. It allows the student to understand the effects of dividends; capital gains; inflation rates; and how the nominal rate of return affects valuation and pricing. The assignment also allows the student to apply concepts related to CAPM, WACC, and Flotation Costs to understand the influence of debt and equity on the company’s capital structure. Assignment Steps Resources: Corporate Finance Calculate the following problems and provide an overall summary of how companies make financial decisions in no more than 700 words, based on your answers: 1. 1) Stock Valuation: A stock has an initial price of $100 per share, paid a dividend of $2.00 per share during the year, and had an ending share price of $125. Compute the percentage total return, capital gains yield, and dividend yield. 2. 3. 2) Total Return: You bought a share of 4% preferred stock for $100 last year. The market price for your stock is now $120. What was your total return for last year? 4. 5. 3) CAPM: A stock has a beta of 1.20, the expected market rate of return is 12%, and a risk-free rate of 5 percent. What is the expected rate of return of the stock? 6. 7. 4) WACC: The Corporation has a targeted capital structure of 80% common stock and 20% debt. The cost of equity is 12% and the cost of debt is 7%. The tax rate is 30%. What is the company’s weighted average cost of capital (WACC)? 8. 9. 5) Flotation Costs: Medina Corp. has a debt-equity ratio of .75. The company is considering a new plant that will cost $125 million to build. When the company issues new equity, it incurs a flotation cost of 10%. The flotation cost on new debt is 4%. What is the initial cost of the plant if the company raises all equity externally? 10. Secondly: he purpose of this assignment is to allow the student an opportunity to explain what it means to have an efficient capital market. Students will gain an understanding of the different levels of market efficiency and how behavioral finance can inhibit reaching market transparency. Assignment Steps Resources: Microsoft® Word Explain in 525 words what it means to have efficient capital market, including: • Describe the behavioral challenges in achieving efficiency. • Discuss the three forms of market efficiency. • What are the implications to corporate finance? • Would you consider the real estate market an efficient capital market? Please explain why or why not.
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FIN 571 Week 4 Connect Problems
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FIN 571 Week 4 Connect Problems Q-1 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, 20 years to maturity, and a coupon rate of 7 percent paid annually. If the yield to maturity is 8.1 percent, what is the current price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Q-1 (Set 2) Watters Umbrella Corp. issued 30-year bonds 2 years ago at a coupon rate of 7.4 percent. The bonds make semiannual payments. If these bonds currently sell for 83 percent of par value, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 2.Microhard has issued a bond with the following characteristics: Par: $1,000 Time to maturity: 15 years Coupon rate: 11 percent Semiannual payments Calculate the price of this bond if the YTM is (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.): Q-2 (Set 2) Union Local School District has bonds outstanding with a coupon rate of 3.7 percent paid semiannually and 15 years to maturity. The yield to maturity on these bonds is 4.3 percent and the bonds have a par value of $5,000. What is the dollar price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Q-3 (Set 1) Yan Yan Corp. has a $2,000 par value bond outstanding with a coupon rate of 5.5 percent paid semiannually and 16 years to maturity. The yield to maturity of the bond is 5.8 percent. What is the dollar price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Q-3 (Set 2) A Japanese company has a bond outstanding that sells for 90 percent of its ¥100,000 par value. The bond has a coupon rate of 5.7 percent paid annually and matures in 19 years. What is the yield to maturity of this bond? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Q-3(Set 3) 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 ? 1000, 25 years to maturity, and a coupon rate of 6.4 percent paid annually. If the yield to maturity is 7.5 percent, what is the current price of the bond? Q-4 (Set 1) The next dividend payment by ECY, Inc., will be $1.96 per share. The dividends are anticipated to maintain a growth rate of 4 percent, forever. The stock currently sells for $39 per share. What is the dividend yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Dividend yield % What is the expected capital gains yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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FIN 571 Week 4 Individual Assignment Analyzing Pro Forma Statements
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Decide upon an initiative you want to implement that would increase sales over the next five years, (for example, market another product, corporate expansion, and so on).
Using the sample financial statements, create pro forma statements of five year projections that are clear, concise, and easy to read. Be sure to double check the calculations in your pro forma statements. Make assumptions that support each line item increase or decrease for your forecasted statements.
Discuss and interpret the financials in relation to the initiative. Make recommendations on potential discretionary financing needs.
Write a 350–700 word analysis of the company’s short term and long term financing needs and determine strategies for the company to manage working capital.
Click the Assignment Files tab to submit your assignment.
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FIN 571 Week 4 Learning Team Reflection
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Watch the “Concept Review Video: Stock Valuation” video located in the WileyPLUS Assignment: Week 4 Videos Activity.
Discuss how markets and investors value a stock.
Write a 350–700 word summary of your discussion.
Click the Assignment Files tab to submit your assignment.
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FIN 571 Week 4 Team Assignment Operating Leverage and Forecasting
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Operating Leverage and Forecasting Problems Team Assignment
Please complete the following problems. When calculating earnings per share and PE ratios, please show your work. This problem is similar to the examples shown in the lecture.
1. You manufacture hunting pack systems in China for 80 dollars each, including shipping. The manufacturing costs only include variable costs. Variable costs are not calculated as a percentage of sales in this case. Sales are a function of the number of packs sold and the price per pack. Likewise, variable costs are a function of the number of packs sold and the cost to produce each pack. You sell these packs to retailers for 200 dollars each. In the current year you will sell 100,000 packs. Your fixed costs including such items as insurance, marketing, travel, shows, office supplies, warehouse rentals etc. totals 5 million dollars this year and are not part of the 80 dollars per pack manufacturing cost. The federal income tax rate for your company is 40 percent.
Your company is publicly traded on the NASDAQ with 1,000,000 shares outstanding.
1. Please create a current income statement using the same format as found in the lecture. (5 points)
2. Please calculate earnings per share. (2 points)
3. Please calculate the price/earnings multiple assuming that the current stock price is 10 dollars per share. (2 points)
2. Create a two-year forecast of the income statement from the information provided in problem number one. Please create three columns of data: current year, year 2, and year 3. Assume that sales increase ten percent per year for year’s two and three. Please show the earnings per share for each of the three years. (10 points)
3. Please estimate the stock price for year’s two and three, assuming that the current PE multiple remains constant for each of the two forecasted years. (6 points)
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FIN 571 Week 5 Assignment Capital Market Efficiency Paper
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Purpose of Assignment The purpose of this assignment is to allow the student an opportunity to explain what it means to have an efficient capital market. Students will gain an understanding of the different levels of market efficiency and how behavioral finance can inhibit reaching market transparency. Assignment Steps Resources: Microsoft® Word Explain in 525 words what it means to have efficient capital market, including: • Describe the behavioral challenges in achieving efficiency. • Discuss the three forms of market efficiency. • What are the implications to corporate finance? • Would you consider the real estate market an efficient capital market? Please explain why or why not.
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FIN 571 Week 5 Assignment Effect of Debt Issuance on Stock Valuation
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Purpose of Assignment The purpose of this assignment is to demonstrate to students how the issuance of debt to purchase outstanding common stock could affect the value of the company’s equity and redefine the capital structure. The problem will also allow students to explore the effect of corporate taxes through debt financing. Assignment Steps Resources:Corporate Finance Scenario: Hightower, Inc. plans to announce it will issue $2.0 million of perpetual debt and use the proceeds to repurchase common stock. The bonds will sell at par with a coupon rate of 5%. Hightower, Inc. is currently an all-equity company worth $7.5 million with 400,000 shares of common stock outstanding. After the sale of the bonds, the company will maintain the new capital structure indefinitely. The company currently generates annual pretax earnings of $1.5 million. This level of earnings is expected to remain constant in perpetuity. The tax rate is 35%. Prepare a 1,050-word memo advising the management of Hightower, Inc. on the financial impact, including the following: • What is the expected return on the company’s equity before the announcement of the debt issue? • Construct the company’s market value balance sheet before the announcement of the debt issue. What is the price per share of the firm’s equity? • Construct the company’s market value balance sheet immediately after the announcement of the debt issue. • What is the company’s stock price per share immediately after the repurchase announcement? • How many shares will the company repurchase as a result of the debt issue? How many shares of common stock will remain after the repurchase? • What is the required return on the company’s equity after the restructuring? • Discuss the advantages and disadvantages of debt financing over equity financing.
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FIN 571 Week 5 Connect Problems
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1.The difference between the present value of an investment’s future cash flows and its initial cost is the: payback period. internal rate of return. profitability index. discounted payback period. net present value. 2.Which statement concerning the net present value (NPV) of an investment or a financing project is correct? An investment project that has positive cash flows for every time period after the initial investment should be accepted. Any type of project should be accepted if the NPV is positive and rejected if it is negative. A financing project should be accepted if, and only if, the NPV is exactly equal to zero. Any type of project with greater total cash inflows than total cash outflows, should always be accepted. An investment project should be accepted only if the NPV is equal to the initial cash flow. 3.The primary reason that company projects with positive net present values are considered acceptable is that: they create value for the owners of the firm. the investment’s cost exceeds the present value of the cash inflows. the project’s rate of return exceeds the rate of inflation. the required cash inflows exceed the actual cash inflows. they return the initial cash outlay within three years or less. 4.Accepting a positive net present value (NPV) project: indicates the project will pay back within the required period of time. is expected to increase the stockholders’ value by the amount of the NPV. ignores the inherent risks within the project. guarantees all cash flow assumptions will be realized. means the present value of the expected cash flows is equal to the project’s cost. 5.The net present value method of capital budgeting analysis does all of the following except: use all of a project’s cash flows. discount all future cash flows. consider all relevant cash flow information. incorporate risk into the analysis. provide a specific anticipated rate of return. 6.What is the net present value of a project with an initial cost of $36,900 and cash inflows of $13,400, $21,600, and $10,000 for Years 1 to 3, respectively? The discount rate is 13 percent. 7.Maxwell Software, Inc., has the following mutually exclusive projects. a-1. Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Payback period Project A 1.938 years Project B 2.063 years ________________________________________ a-2. Which, if either, of these projects should be chosen? b-1. What is the NPV for each project if the appropriate discount rate is 15 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b-2. Which, if either, of these projects should be chosen if the appropriate discount rate is 15 percent? 8.Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.82 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which it will be worthless. The project is estimated to generate $2,120,000 in annual sales, with costs of $815,000. The tax rate is 30 percent and the required return is 12 percent. What is the project’s NPV? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 9.The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 35 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project.
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FIN 571 Week 5 Individual Assignment DCF and WACC Problems
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Discounted Cash Flows and WACC Homework Problems
Please post the answers (and show your work) in the assignments section by midnight the last day of the week assigned.
1. Calculate the future value of 1,535 invested today for 8 years at 6 percent.
(5 points)
2. What is the total present value of the following cash stream, discounted at 8 percent? (5 points)
Year Amount
1 400
2 750
3 945
4 145
5 78
3. If you invested $2,000 per year into an IRA for 30 years and received 6 percent return each year, what would the account balance be in 30 years? (5 points)
4. A friend gives you a proposition. If you give him 1,500 dollars today, he will guarantee your receive 12 percent a year for the next 5 years. How much money will you receive from him at the end of 5 years? (5 points)
5. You want to buy a new Computer Aided Design (CAD) system for your business. The cost of the system is $150,000 and you expect to save over $40,000 per year in reduced labor costs. Please calculate the net present value of the CAD if your required return is 10 percent and the life of the system is expected to be 5 years. (10 points)
6. Your company is considering converting its heating system in the main office from coal to heating oil. The initial cost of removing the coal fired furnace and installing an new oil fired unit is $60,000. The life of the analysis is 7 years. In the past you spent $25,000 per year on coal. The new company says you will spend no more than $15,000 per year on heating oil. If your required return is 12 percent, should you make this investment? Please calculate the net present value of this project. (10 points)
7. You have collected the following information:
a. the yield on your company’s preferred stock 8%
b. the yield on your company’s debt 10%
c. the required return on your company’s common stock and internal equity 12%
d. debt total $5,000,000
e. preferred stock current market value $10,000,000
f. common stock and retained earnings total value $20,000,000
Please calculate the pre-tax weighted average cost of capital (WACC) for your company.
(10 points)
8. Your company’s marginal income tax rate is 40%. Please calculate the post tax WACC from the information provided in problem 7. (10 points)
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FIN 571 Week 5 Learning Team Reflection
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Watch the “Concept Review Video: Cost of Capital” video located in the WileyPLUS Assignment: Week 5 Videos Activity.
Discuss some of the corporate finance challenges faced by this company.
Write a 350–700 word summary of your discussion.
Click the Assignment Files tab to submit your assignment.
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FIN 571 Week 5 Team Assignment Capital Budgeting Assignment, Part 1 (New Heritage Doll)
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Acting as the executive team for a small company, your team will apply the principles of capital budgeting to invest in growth and cash flow improvement opportunities in three phases over 10 simulated years. Each opportunity has a unique financial profile and you must analyze the effects on working capital. Examples of opportunities include taking on new customers, capitalizing on supplier discounts, and reducing inventory. The team must understand how the income statement, balance sheet, and statement of cash flows are interconnected and be able to analyze forecasted financial information to consider possible effects of each opportunity on the firm’s financial position. The company operates on thin margins with a constrained cash position and limited available credit. You must optimize use of internal and external credit as you balance the desire for growth with the need for maintaining liquidity. Create a 1,050-word analysis of the team members’ decisions during each phase (1–3) and how they influenced each member’s final results. • Analyze the influence of member’s decisions on sales outcomes or metrics of SNC. • Analyze the influence of member’s decisions on EBIT outcomes or metrics of SNC. • Assess the influence of member’s decisions on Net Income outcomes or metrics of SNC. • Analyze the influence of member’s decisions on Free Cash Flow outcomes or metrics of SNC. • Assess the influence of member’s decisions on Total Firm Value outcomes or metrics of SNC. Cite a minimum of two scholarly references. Format your assignment consistent with APA guidelines.
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FIN 571 Week 5 Working Capital Simulation Managing Growth, Part 1 (SNC)
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Acting as the executive team for a small company, your team will apply the principles of capital budgeting to invest in growth and cash flow improvement opportunities in three phases over 10 simulated years. Each opportunity has a unique financial profile and you must analyze the effects on working capital. Examples of opportunities include taking on new customers, capitalizing on supplier discounts, and reducing inventory. The team must understand how the income statement, balance sheet, and statement of cash flows are interconnected and be able to analyze forecasted financial information to consider possible effects of each opportunity on the firm’s financial position. The company operates on thin margins with a constrained cash position and limited available credit. You must optimize use of internal and external credit as you balance the desire for growth with the need for maintaining liquidity. Sign-in to the Harvard Business Simulation and review each of the following: • Welcome Statement • How to Play • Terminology Primer • More Details (this includes information to help you understand how to play the simulation) Complete the Harvard Business Simulation individually and track and save your results. Create a 1,050-word analysis of the team members’ decisions during each phase (1–3) and how they influenced each member’s final results. • Analyze the influence of member’s decisions on sales outcomes or metrics of SNC. • Analyze the influence of member’s decisions on EBIT outcomes or metrics of SNC. • Assess the influence of member’s decisions on Net Income outcomes or metrics of SNC. • Analyze the influence of member’s decisions on Free Cash Flow outcomes or metrics of SNC. • Assess the influence of member’s decisions on Total Firm Value outcomes or metrics of SNC. Cite a minimum of two scholarly references. Format your assignment consistent with APA guidelines.
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FIN 571 Week 6 Assignment start-up company Signature Assignment (score 80%)
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About Your Signature Assignment: This signature assignment is designed to align with specific program student learning outcome(s) in your program. Program Student Learning Outcomes are broad statements that describe what students should know and be able to do upon completion of their degree. The signature assignments may be graded with an automated rubric that allows the University to collect data that can be aggregated across a location or college/school and used for program improvements. Purpose of Assignment: The purpose of this assignment is to allow the student an opportunity to apply their understanding of cash flow management, break-even analysis, and short-term and long-term financing in starting and growing a business. The assignment will be presented to the class giving the real world scenario of presenting a proposal to investors. Resources: OECD Database, Corporate Finance Prepare a 15-slide PowerPoint® content presentation with speaker notes requesting initial funding of $500,000 to start and run a start-up company. The proposed start-up company could be an existing business model (coffee shop, pet store, etc.) or could be something entirely new and exciting. Create the presentation in the following format, with at least one slide to cover each of the following areas: 1. Title Page 2. Table of Contents 3. Executive Summary 4. Information about the Industry 5. Marketing Plan 6. Competitor Analysis 7. 3 Year Income Statement (Profit & Loss) Projections 8. Include your assumptions for why and how you will achieve your sales growth and what significant expenses and investments you expect to incur to achieve your revenue goals. Assumptions: Sales Growth, Significant Expenses and Investments 9. 3 Year Proposed Funding Schedule (Sources and uses of the funds received.) 10. Break-Even Analysis Review the following scenarios and assumption, and explain how it impacts your decision to expand: Each should have its own slide just as above; 11. After Year 3, the investors are interested in your company expanding internationally to possibly outsource labor or to reduce manufacturing costs. What countries would you expand to first, and why? What factors would you need to consider in making this decision? Global Expansion: Labor/Mfg. Costs. Country? 12. What is the corporate tax rate in the countries you are considering expanding your business to, and how will that affect your decision to expand globally? (Use OECD Database or another resource to determine the corporate tax rate). 13. The investors want to see a decision tree detailing the decisions you would make if you received $300K now and $200K at the end of three years instead of $500K up front. 14. The investors would like your team to provide advantages and disadvantages of using debt financing versus selling company stock to raise capital for growth. 15. Briefly explain the venture capital process. Does it make sense for your company to raise funds through venture capital? 16. Academic and Business References 17. Feedback Format your presentation consistent with APA guidelines. You must present this assignment in class to earn full credit. Students who do not present will have a 50% reduction in grade. Click the Assignment Files tab to submit your assignment.
