1. What is the present value of the following uneven cash flow stream −$50‚ $100‚ $75‚ and $50 at the end of Years 0 through 3? The appropriate interest rate is 10%‚ compounded annually. PV=190.46 (SEE EXCEL FILE ATTACHED) 2. We sometimes need to find out how long it will take a sum of money (or something else‚ such as earnings‚ population‚ or prices) to grow to some specified amount. For example‚ if a company’s sales are growing at a rate of 20% per year‚ how long will it take sales to double?
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Alternative Financing Plans A. Short-term interest exp. (400‚000 + ½ (300‚000)) 5% = (550‚000) 5% = 27‚500 Long-term interest exp. (400‚000 + ½ (300‚000)) 10% = (550‚000) 10% = 55‚000 27‚500 + 55‚000 = 82‚500 Earnings before interest and taxes = 200‚000 Interest expenses = 82‚500 Earnings before taxes = 200‚000 – 82‚500 = 117‚500 Taxes = 117‚500 X 34% = 39‚950 Earnings after interest and taxes = 200‚000 – 82‚500 – 39‚950 = 77‚550 B. Short-term interest exp. ( ½ (400‚000)) 5% = (200
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Ethics and Compliance Paper FIN/370 Starbucks Coffee Company “To inspire and nurture the human spirit – one person‚ one cup and one neighborhood at a time ("Starbucks"‚ 2012).” Starbucks mission is to not only provide the highest quality of coffee but also make a positive impact on the world. Ethisphere Institute over the last six years has selected the World’s Most Ethical Companies and Starbucks has made the list every year. What are the key components that make Starbucks one of the most ethical
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She worked for unemployed women and the homeless‚ and was actively involved with feminist groups and journals. Procter’s literary career began when she was a teenager; her poems were primarily published in Charles Dickens’s periodicals Household Words and All the Year Round and later appeared in book form. Her charity work and her conversion to Roman Catholicism appear to have strongly influenced her poetry‚ which deals mostly with such subjects as homelessness‚ poverty‚ and "fallen women". Procter
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1 The value of a firm is a. smaller the higher is the risk premium used to compute the firm’s value. b. larger the higher is the risk premium used to compute the firm’s value. c. the price for which the firm can be sold minus the present value of the expected future profits. d. both b and c 2 A price-taking firm can exert no control over price because a. the firm’s demand curve is downward sloping. b. of a lack of substitutes for the product.
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4. The left side of an account is always: a. the debit side. b. the credit side. c. the balance of that account. d. carried forward to the next accounting period. 5. Posting is the process of: a. preparing a chart of accounts. b. adding a column of figures. c. transferring journal entries to ledger accounts. d. recording entries in a journal. 6. Montana Inc.’s fiscal year ended on December 31‚ 2012. The balance in the prepaid insurance account as of December 31‚ 2012‚ was $34‚800 (before
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TRADITIONAL FORMS OF COMMUNICATION ARE STILL IN USE TODAY‚ DESPITE THE MOST ADVANCED METHODS OF MODERN COMMUNICATION. DISCUSS. N. P. Weerasooriya has done this for her project in Mass Communication‚ Aquinas University College‚ Sri Lanka. Introduction In traditional forms of communication‚ people learned and shred ideas‚ opinions and experiences in an orally transmitted manner. Within the development of language‚ the capacity to communicate become more effective
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Case Study – Banning of Shark fin soup in Jade Restaurant. The refusal of not banning shark fin soup at Jade Restaurant can affect many stakeholders. This includes the owner/shareholder‚ suppliers‚ special interest groups (SIGS)‚ customers‚ and also the government. The owners and shareholders are definitely going to be affected because if the ban were to go through they would lost a portion of the profit that they would’ve earned if it weren’t for the ban. The suppliers are obviously going to be
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Fin/370 I Defining Financial Terms: Finance- The study of how people and businesses evaluate investments and raise capital to fund them and it help organizations to study every decision they make from investing in a product to market short term or long term * Efficient market- A market in which all the available information is fully incorporated into securities prices and the returns investors will earn on their investments cannot be predicted. In this type of market no insider trading
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QUESTIONS 1. Assume that you are given a set of cash flows on a time line and asked to find their present value. How would you choose the discount rate to apply to these cash flows? abcdefg 2. Consider a one-year‚ $18‚000 CD. a. What is its value at maturity if it pays 8.4 percent (annual) interest? b. Compute the future value if the CD pays 3.2 percent; if it pays 16.8 percent. Overall‚ what do these results indicate about the relation between level of interest and future value?
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