10 July 2012 Managerial Finance FIN515 Professor David Felsberg DellaTorre Mini Case Corporate finance is important to all managers regardless of the industry they are in due to the fact that it deals with the strategic financial issues associated with achieving goals such as how the corporations should raise and manage its capital ‚ what investments the firm should make‚ what portion of profits should be returned to shareholders in the form of dividends‚ and whether it makes sense to make
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3-1 Days Sales Outstanding Greene Sisters has a DSO of 20 days. The company’s average daily sales are $20‚000. What is the level of its accounts receivable? Assume there are 365 days in a year. Formula for DSO = Receivables/ Ave sales per day = Receivables/( Annual sales/365) = 20 days x $20‚000= $400‚000 Solution: AR = $400‚000 3-2 Debt Ratio Vigo Vacations has an equity multiplier of 2.5. The company’s assets are financed with some combination of long-term debt and common equity. What is
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average accounts receivable? AR = Credit sales per day x length of collection period AR = $3‚500 x 17 AR = $59‚500 Problem 16-3 (Cost of Trade Credit) What is the nominal and effective cost of trade credit under the credit terms of 3/15‚ net 30? 30 days 3% discount if available if paid within 15 days 365 day/year Nominal cost of trade credit = 3/97 x [365 / (30-15)] Nominal cost of trade credit = 0.03093 x 24.3333 = 0.7526289 or 75.26% Effective cost of trade credit: Periodic
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FIN515 Homework 5 Problem 10-8: NPVs‚ IRRs‚ and MIRRs for Independent Projects Edelman Engineering is considering including two pieces of equipment‚ a truck and an overhead pulley system‚ in this year’s capital budget. The projects are independent. The cash outlay for the truck is $17‚100 and that for the pulley system is $22‚430. The firm’s cost of capital is 14%. After-tax cash flows‚ including depreciation‚ are as follows: Year | Truck | Pulley | 1 | $5‚100 | $7‚500 | 2 | 5‚100 |
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Week 3 Homework Why study situational approaches to leadership? Researchers began to focus on what style of leadership was most effective in a particular situation with a particular manager. Contingency or situational theories look for the best fit between the leader and the situation and provide guidelines for a manger to achieve this fit. Managers adjust their decision making‚ orientation and motivational approach based upon a unique combination of factors in their situations for example
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Week 3 Homework Operant Conditioning molds behavior by the consequences of an individual through punishment‚ reinforcement and extinction. Observational Learning happens from observing the behavior of other individuals. Social Learning is a behavior learned from a social environment. Prejudice is developed and nurture through classical and operant conditioning from an early age when an individual acts prejudice towards something and is rewarded for acting in such a way or saying such things.
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FIN515 Course Project One Apple Inc. Apple Incorporated is a leading company in technology. Apple has created and reimagined technology to what we use today. Easy to use‚ educational and simple tools to enjoy the things we love- from watching movies to creating our own music- is what Apple has created in the technology being sold today. iMacs‚ iPods and iPhones are only a few of the lineup that Apple sells today in its stores. Apple is a Cinderella story that has continued to show consumers a
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Homework Assignment: Week 1 Mini-Case a. Why is corporate finance important to all managers? Corporate finance is important to all managers because you need to be aware of the tools needed to evaluate the firm’s value and be able to accurately make decisions to maximize wealth. b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form. A business may start as a sole proprietorship‚ or
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CLICK TO DOWNLOAD MAT540 Week 3 Homework Chapter 14 1. The Hoylake Rescue Squad receives an emergency call every 1‚ 2‚ 3‚ 4‚ 5‚ or 6 hours‚ according to the following probability distribution. The squad is on duty 24 hours per day‚ 7 days per week: Time Between Emergency Calls (hr.) Probability 1 0.05 2 0.10 3 0.30 4 0.30 5 0.20 6 0.05 1.00 a. Simulate the emergency calls for 3 days (note that this will require a “running”‚ or cumulative‚ hourly clock)‚ using
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Michelle White FI-516 – WEEK 3 HOMEWORK PROBLEMS Problem No. 1 on Options based on Chapter 8 A Call Option on the stock of XYZ Company has a market price of $9.00. The price of the underlying stock is $36.00‚ and the strike price of the option is $30.00 per share. What is the Exercise Value of this Call Option? What is the Time Value of the Option? EV = $36.00 - $30.00 = $6 EV = $6.00 TV = $9.00 - $6.00 = $3.00 TV = $3.00 Problem No. 2 on Options based on Chapter 8 The
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