Score Explanation 384 Incorrect 0.00 Total 0.00 / 5.00 Question Explanation Simple PV calculation. Question 4 (10 points) Johnny and Darren both earn $100 working on their respective neighbors ’ big farms. Johnny puts his $100 in the piggy bank that his parents gave him to encourage him to save. Darren puts his money in a savings account his parents set up for him. The savings account pays 3% interest. They both take their money out after 5 years. How much more money does Darren have than
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Chapter 1 Corporate Finance- the acquisition and efficient use of funds required by the fund The acquisition refers to the finance decision Efficient use of funds refers to the investment decision A major aspect of corporate finance is the creation and determination of value Objective of Financial Management- Maximize shareholder wealth is the main goal—to maximize the market value of the firm 3 Main Decision Areas of Financial Manager to Achieve Maximization: 1. Investment Decision- What
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Business Law 265 Spring 2008 Exam #1‚ February 26‚ 2008 1. Jerry sent a letter containing an offer to sell his mountain bike to Bill for $300. This letter was sent on Oct. 1 and it was received on Oct. 4. On Oct. 5 Bill sent a letter to Jerry accepting the offer. But then Bill changed his mind; on Oct 6 Bill sent a message by personal messenger to Jerry‚ rejecting Jerry’s offer. The messenger delivered the rejection and it was received by Jerry on Oct. 7. The letter containing Bill’s
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Sunny Beach Hotel Evaluation Report Regarding Various Scenarios for Adding a Karaoke Pub in the Sunny Beach Hotel . Dear Sir‚ I have considered the scenarios you suggested to be evaluated from economic point of view regarding the opportunity of accepting the offer of Planet Karaoke Pub to install one of its facilities inside the free space from 2nd floor of Sunny Beach Hotel or to extend the activities of our company with a Karaoke pub located on the beach area administrated by our
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CHAPTER 2 How to Calculate Present Values Answers to Problem Sets 1. If the discount factor is .507‚ then .507*1.126 = $1 2. 125/139 = .899 3. PV = 374/(1.09)9 = 172.20 4. PV = 432/1.15 + 137/(1.152) + 797/(1.153) = 376 + 104 + 524 = $1‚003 5. FV = 100*1.158 = $305.90 6. NPV = -1‚548 + 138/.09 = -14.67 (cost today plus the present value of the perpetuity) 7. PV = 4/(.14-.04) = $40 8. a. PV = 1/.10 = $10 b. Since the perpetuity
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Chapter 4 15. For discrete compounding‚ to find the EAR‚ we use the equation: EAR = [1 + (APR / m)]m – 1 = .0719‚ or 7.19% EAR = [1 + (.07 / 4)]4 – 1 EAR = [1 + (.16 / 12)]12 – 1 = .1723‚ or 17.23% = .1163‚ or 11.63% EAR = [1 + (.11 / 365)]365 – 1 To find the EAR with continuous compounding‚ we use the equation: EAR = er – 1 EAR = e.12 – 1 = .1275‚ or 12.75% 23. Although the stock and bond accounts have different interest rates‚ we can draw one time line‚ but we need to remember to
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T he Sisyphean Corporation The Sisyphean Corporation is considering investing in a new cane manufacturing machine that has an estimated life of three years. The cost of the machine is $30‚000 and the machine will be depreciated straight line over its three-year life to a residual value of $0. The cane manufacturing machine will result in sales of 2‚000 canes in year 1. Sales are estimated to grow by 10% per year each year through year three. The price per cane that Sisyphean will charge
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UNIVERSITY SCHOOL OF BUSINESS DEPARTMENT OF ACCOUNTING‚ ECONOMICS‚ AND FINANCE FIN 318 - PRINCIPLES OF INTERNATIONAL CORPORATE FINANCE COURSE SYLLABUS Term: Spring 2013 Tuesday & Thursday 12:15 – 1:30 Main Campus I. COURSE NUMBER AND TITLE FIN 318-01 – Principles of International Corporate Finance II. INSTRUCTOR Dr. Nicole Grandmont-Gariboldi ngariboldi@stu.edu Office Phone (305) 628-6568 III. TEXTBOOK Fundamentals of Multinational Finance 3rd Ed Moffett ‚ Stonehill &Eiteman‚ Addison-Westley ISBN: 0-321-54164-2
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Introduction to Corporate Finance 1. Two Questions: what investments should the corporation make and how should it pay for those investments? a. Investment decisions involve spending money and financing decisions involving raising money b. Concepts govern good financial decisions c. Financial managers value the shareholders’ investment opportunities outside their company because of the opportunity cost of capital contributed by shareholders d. All managers and employees need to pull together
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CHAPTER 16 SIMPLE LINEAR REGRESSION AND CORRELATION SECTIONS 1 - 2 MULTIPLE CHOICE QUESTIONS In the following multiple-choice questions‚ please circle the correct answer. 1. The regression line [pic] = 3 + 2x has been fitted to the data points (4‚ 8)‚ (2‚ 5)‚ and (1‚ 2). The sum of the squared residuals will be: a. 7 b. 15 c. 8 d. 22 ANSWER: d 2. If an estimated regression line has a y-intercept of 10 and a slope of 4‚ then when x = 2 the actual value
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