Copyright © 2012 Pearson Education. 3-3 3.1 Cost-Benefit Analysis • Role of the Financial Manager – Make decisions on behalf of the firm’s investors • For good decisions‚ the benefits exceeds the costs Copyright © 2012 Pearson Education. 3-4 3.1 Cost-Benefit Analysis • Role of the Financial Manager – Real-world opportunities are often difficult to quantify and involve using skills from other management disciplines: • • • • • Marketing Economics Organizational Behavior Strategy Operations
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Chapter 18 - Liability and Liquidity Management Fin 698 Fall 2012 Prof. Anderson HW #7b: chapter 18: 3‚ 10‚ 11‚ 16 and 17. (These appear in the book on pages 568-572.) Solutions for End-of-Chapter Questions and Problems 1. What are the benefits and costs to an FI of holding large amounts of liquid assets? Why are Treasury securities considered good examples of liquid assets? A major benefit to an FI of holding a large amount of liquid assets is that it can offset any unexpected and
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2012? To answer this question for each of the two years‚ take the ratio of the major income statement accounts to net revenues (sales). Cost of sales Research and development Selling‚ general and administrative expense Provision for income tax 4. Compute return on stockholders’ equity for 2011 and 2012 using data from Exhibits 1 and 2. Exhibit 1 SUNSHINE SYSTEMS‚ INC. | Summary Consolidated Statement of Income (in millions) | | 2012 | 2011 | 2010 | 2009 | |
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Continuing Case: Cory and Tisha Dumont Part 3: Protecting yourself with insurance 1. Using the earnings multiple approach would result in the following life insurance calculations for Cory and Tisha. Cory’s needs = $38‚000 x (1 – 0.22) x 12.46 = $369‚314 Tisha’s needs = $46‚000 x (1 – 0.22) x 12.46 = $447‚065 Cory currently has $76‚000 (2 x $38‚000) of term life insurance through his employer. Consequently‚ Cory should consider purchasing approximately $293‚000 of additional life
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equivalent yield on a municipal bond k) the market price of common stock l) the market price of preferred stock m) years until a bond matures n) yield to call o) yield to maturity 3) Define a) firm specific risk b) market risk c) portfolio 4) How is the dollar amount of interest paid to bondholders each year calculated? 5) In a corporation‚ who owns the residual claim on cash flows? 6) Rank investments by their coefficient of variation 7) What do specialists and/or market makers contribute
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class example. b) Construct a replicating portfolio of stock and bond (with the risk free rate of return) that will have the same payoff as the option described in a). What should be the price of this call option then? Question 4 Your friend‚ Dawg‚ quit school 2 years ago and moved to Florida to become an orange farmer. Admiring your wisdom acquired from your Fin475 class‚ he contacted you this year to help him with some risk management decisions. a. He told you he is going
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Introduction - Sources of Finance Introduction to the Sources of Finance resource. Sources of Finance Introduction This resource is designed for use with Accounting courses at A ’ level. This resource is relevant to the following: * AQA Module 5‚ Section 14.5: ’Types of Business Organisation‚ Sources of Finance ’ * OCR Module 2505‚ Sections 5.3.2 and 5.6.2 For many businesses‚ the issue about where to get funds from for starting up‚ development and expansion can be crucial for the success
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Case Analysis of Netscape’s Initial Public Offering Executive Summary 2. Background-3P 3.1. Position The Internet Industry consists of companies that provide a wide variety of products and services primarily online through their Web sites. Operations include‚ but are not limited to‚ search engines‚ retailers‚ travel services‚ as well as dial-up and broadband access services. Netscape Communications is a US computer services company‚ best known for Netscape Navigator‚ its web browser
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sheet is a statement of the financial position of the firm on a given date‚ including its asset holdings‚ liabilities‚ and equity. a. True b. False 3) An advantage of balance sheet numbers is that assets reflect current market values. a. True b. False 4) Total equity on the balance sheet increases as dividends paid increases. a. True b. False 5) Financial ratios can highlight a firm’s financial performance with regard to liquidity‚ solvency‚ and profitability. a. True b. False 6) Ratios are used to
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from West Point‚ NY were I transferred from to come to UT. 3. What is the one thing that most concerns you about being at the UT‚ Austin? Why? The heat….its pretty self-explanatory‚ but its really hot and sweaty walking to class every day. 4. What are some of the academic issues and topics that interest you? Have you thought at all about a potential major? I am an Economics major and a Spanish minor so obviously those topics interest me greatly. I am
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