http://helpyoustudy.info Chapter 01 - Introduction to Corporate Finance Chapter 01 Introduction to Corporate Finance Answer Key Multiple Choice Questions 1. Which one of the following terms is defined as the management of a firm ’s long-term investments? A. working capital management B. financial allocation C. agency cost analysis D. capital budgeting E. capital structure Refer to section 1.1 AACSB: N/A Difficulty: Basic Learning Objective: 1-1 Section: 1.1 Topic: Capital budgeting
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Solution to Case 23 Evaluating Project Risk It’s Better to Be Safe Than Sorry! Questions: 1. What seems to be wrong with the way the NPV of each project has been calculated? Indicate without any calculations‚ how Pete and John should go about recalculating the projects’ NPVs. The NPV of each project has been calculated by discounting the cash flows at the 8% before-tax cost of debt. This is incorrect. Since the company has debt‚ preferred stock and common
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1 )Refer to the homework --choice between Current rent a machine/Purchase a machine/Purchase a new machine Tea company rent a bottling machine for 50‚000 per year‚ including all the maintaining cost. It is considering to purchase a machine instead. A. Purchase the machine it is currently costing for 150‚000. The machine will require 21‚000 per year for maintain. B. Purchase a new more advanced machine for 260‚000. The machine will require 15‚000 per year for ongoing maintain. And will save the
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Valuation- “projected financial performance into values.” Involves projecting/ making budgets. Value of an Asset = Value of Cash Flow (CF) it Will Generate (not profits) CF=1/(1+r)^1 value is based on three things- Current Cash Flow‚ Expected growth (used with to estimate future cash flow)‚ Riskiness of expected future cash flow (discount rate).Net Present Value- Value CFs using project discount rate based on risk Investment Decision-which real assets the firm should acquire.Choose positive and
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Chapter 14 Cost of Capital Multiple Choice Questions 1. A group of individuals got together and purchased all of the outstanding shares of common stock of DL Smith‚ Inc. What is the return that these individuals require on this investment called? A. dividend yield B. cost of equity C. capital gains yield D. cost of capital E. income return 2. Textile Mills borrows money at a rate of 13.5 percent. This interest rate is referred to as the: A. compound rate. B. current yield. C. cost of debt
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Principles of Finance STANDARD PAPER Duration Reading time Working time Total time 5 minutes 3 hours 3 hours 5 minutes Attempt Marks Any four (4) out of five (5) questions All questions carry equal marks. This will total to 100 marks and will be scaled to produce a mark consistent with 60% weighting in the unit assessment. Closed Book exam – textbook‚ reference books‚ notes‚ and tutorial solutions are not permitted. Text programmable calculators may be used in the exam but must have
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Solutions Manual Fundamentals of Corporate Finance 9th edition Ross‚ Westerfield‚ and Jordan Updated 09-29-2010 CHAPTER 1 INTRODUCTION TO CORPORATE FINANCE Answers to Concepts Review and Critical Thinking Questions 1. Capital budgeting (deciding whether to expand a manufacturing plant)‚ capital structure (deciding whether to issue new equity and use the proceeds to retire outstanding debt)‚ and working capital management (modifying the firm’s credit collection policy with its customers)
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RUNNINGHEAD: Final Exam Final Exam Rasillah Evans University of Phoenix May 23‚ 2010 Introduction With a multitude of conflicting expectations‚ modern companies can be complex regarding the environmental‚ societal‚ and long-term impacts of the business. Because too often individual shareholders will not ask the difficult questions on how corporations are effecting the environment‚ society and the economy‚ it is as a result the accountability of the institutional shareholders to
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Question 1- Analyze the following transaction under traditional approach. 18.1.2011 Received a cheque from a customer‚ Sanjay at 5 p.m. Rs.20‚000 19.1.2011 Paid Ramu by cheque Rs.1‚50‚000 20.1.2011 Paid salary Rs. 30‚000 20.1.2011 Paid rent by cheque Rs. 8‚000 21.1.2011 Goods withdrawn for personal use Rs. 5‚000 25.1.2011 Paid an advance to suppliers of goods Rs. 1‚00‚000 26.1.2011 Received an advance from customers Rs. 3‚00‚000 31.1.2011 Paid interest on loan Rs. 5‚000 31.1.2011 Paid
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Bank Sample Paper for Upcoming Bank Recruitment Exams (Logical and Analytical Reasoning Questions) Part I: Logical Reasoning Ability For Question 1-5 : Six actors – Bob‚ Carol‚ Dave. Ed‚ Frank‚ and Grace – are auditioning for a part in an off-Broadway play. The auditions for a part in an off-Broadway play. The auditions will take place over four consecutive days‚ starting on a Thursday. Each actor will have one audition. The days on which the different actors will audition must conform
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