Department of Applied Finance and Actuarial Studies ACST101 : TECHNIQUES AND ELEMENTS OF FINANCE TECHNIQUES READING FOR WEEK 1 SIMPLE INTEREST & SIMPLE DISCOUNT INTRODUCTION TO TECHNIQUES The first half of the lectures develop the basic techniques required to solve financial problems: - Simple interest and simple discount which are usually only used for transactions of a short duration. The price paid for securities purchased in the money market is usually calculated using a simple interest
Premium Interest Time value of money Compound interest
Finance Theory I – Case 2 Tracy Hsiao‚ Baltic Ocean Evaluation of AQR Momentum Funds Date: Dec. 5th‚ 201r Past performance of momentum strategies – CAPM & Fama‐French MOM 4 factors model In Table 1‚ we could evaluate the past performance of momentum strategy‚ Short Decile 1 and Long Decile 10‚ a.k.a. L/S (10‐1). Capital Asset Pricing Model (CAPM) E(R) = α + Rf + β (RM - Rf) + By applying to CAPM‚ we got a β that is almost zero (-0.08) showing the strategy could effectively diversify and reduce
Premium Investment
About Central Investment & finance PLC Ownership Central Investment & Finance Limited was established in 1966 by Mr Hinni Appuhami ‚ Who was the founder of Malliban Biscuits & it was remained as a family owned company for about four decades. Subsequently‚ in the year 2004‚ 74.5% stake of the company was acquired by the Aspic Corporation limited which is a diversified Investment management company. At the time of Acquisition CIFL was with a deposit base of 30 million & an accumulated loss of 12 million
Premium Management
CASE STUDY HOMEWORK CORPORATE FINANCE PROFESSOR: G. BERTINETTI STUDENT Albert Maurer 1 The Situation: In 2010 a new company was created in order to enter into the food industry. They spent many months in studying the market‚ engineering the products and the commercial strategy‚ find out the production plants. At the end of 2010 the business plan is ready and the company has already participated to an exhibition where many potential customers said to be very interested to the project
Premium Investment Stock market Risk
Mini Case Report – The Dilemma at Day-Pro 1) PayBack Period for Synthetic Resin and Epoxy Resin: Synthetic Resin PBP = 2 + 250/200 = 2.5 years Epoxy Resin PBP = 1 + 200/400 = 1.5 years To show that using the Payback Period to evaluate the projects is flawed‚ Tim can argue that the PayBack Period ignores the time value of money‚ requires an arbitrary cutoff point‚ ignores cash flows beyond the cutoff date‚ and is biased against long-term projects‚ such as research and development‚ and new projects
Premium Net present value
Tire City After completing the forecast for Tire City for 1996 and 1997 you can see that the firm is in very good shape. As the Sales increase each year the expenses do not increase at the same level so the net income of the firm continues to increase. With this number increasing the firm will be able to cover the loan for the new building without having to raise too much capital outside. The amount that tire city is expected to spend is $2‚400‚000 which $2‚000‚000 of that is accounted
Premium Business Generally Accepted Accounting Principles Commerce
In order to decide on an IPO price‚ we must look at the current financial position of the company‚ as well as make projections for possible future scenarios. From the data given‚ we know that Prairie Home Stores (PHS) has a current book value of $80‚000‚000. With 400‚000 outstanding shares‚ the book equity per share is $200. There are two possible paths for future performance to consider. The first‚ a constant growth scenario‚ assumes that PHS will continue on its current trajectory of paying
Premium Stock market Dividend yield Dividend
XYZ is considering a project that will require $28‚000 in net working capital and $87‚000 in fixed assets. The project is expected to produce annual sales of $75‚000 with associated costs of $57‚000. The project has a 5-year life. The company uses straight-line depreciation to a zero book value over the life of the project. The tax rate is 30 percent. What is the operating cash flow for this project? OCF = net income + depr (Sales-cost) * (1-T) + depreciation * T OCF = (Sales – Costs)(1 – tC)
Premium Depreciation Cash flow Net present value
Introduction & Financial performance Interco originally began in 1911 as International Shoe Company and changed to Interco in 1966. It expanded into the consumer goods market mainly through acquisitions. In 1988 too‚ the company was a major manufacture of furniture‚ men’s footwear‚ and apparel‚ owning many American iconic brands such as Ethan Allen‚ London Fog‚ Converse and Florsheim. The firm’s financial goals included: 1. Improve long term sales and earnings growth 2. Improve return of shareholders’
Premium Stock market Capital Proposal
Chapter 8. Mini-Case Assume that you have just been hired as a financial analyst by Triple Play Inc.‚ a mid-sized California company that specializes in creating high-fashion clothing. Because no one at Triple Play is familiar with the basics of financial options‚ you have been asked to prepare a brief report that firm’s executives can use to gain a cursory understanding of the topic. To begin‚ you gathered some outside materials on the subject and used these materials to draft a list of pertinent
Premium Option Call option Put option