BUSS384 - Corporate Finance - Problem Set #1 Due by Wednesday‚ 15 October 2014 1. [10 points] Sydney Industries‚ Inc.‚ is considering a new project that costs $30 million. The project will generate after-tax (year-end) cash flows of $8 million for five years. The firm has a debt-to-equity ratio of 0.25. The cost of equity is 12 percent and the cost of debt is 7 percent. The corporate tax rate is 40 percent. It appears that the project has the same risk of the overall firm. Should Sydney undertake
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Tri Vi Dang Email: td2332@columbia.edu Columbia University Spring 2013 Corporate Finance (ECON W4280) Meeting time: Tu‚ Th 4.10-5.25 Meeting place: Hamilton 503 Office address: IAB 1032 Office hours: Th 11.00-12.00 and other times by appointment Course Description The aim of this introductory course in corporate finance is to provide students with fundamental concepts for understanding firms’ financing decisions and the basic tools for the valuation of a corporation. This course
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MANAGEMENT CONSULTANCY - Solutions Manual CHAPTER 1 OVERVIEW OF MANAGEMENT ADVISORY SERVICES (MAS) BY CPAs I. Questions 1. Among the primary factors that contributed to the emergence and growth of management consultancy are: 1. Growth in size and complexity of business. 2. Difficulty in conducting and managing a business. 3. Greater competition among businesses so that new management techniques will have to be applied. 4. Recognition of the importance of accurate and timely information in
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steps of the decision process are: 1. Clearly define the problem and the factors that influence it. 2. Develop specific and measurable objectives. 3. Develop a model. 4. Evaluate each alternative solution. 5. Select the best alternative. 6. Implement the solution. 2. The purpose of this question is to make students use a personal experience to distinguish between good and bad decisions. A “good” decision is one that is based on logic and all available information. A
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Fundamental of Corporate Administration (FCA) Tutorial Answers T1 Tutorial 2 Q2. Highlight the functions and power carried by CCM. Functions 1. Act as an agent enforcing and collecting payment of prescribed fees under the laws administered. 2. Regulate matters in relation to the laws administrated 3. Encourage and promote proper conduct in corporate sector to established norms of good corporate governance 4. Enhance supply of corporate information under laws administrated
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questions‚ 1 points each‚ 10 points total) 1) According to M&M Theorem in the absence of corporate taxes‚ an increase in leverage (i.e.‚ an increase in D/E ratio) will lead to a) Higher cost of equity b) Low cost of equity c) No change in cost of equity d) The information provided is not sufficient to chose any of the above questions Ans: A 2) According to M&M Theorem in the absence of corporate taxes‚ an increase in leverage (i.e.‚ an increase in D/E ratio) will lead to a) Higher
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1‚ Solution 1 (a) q = 6.482x1017 x [-1.602x10-19 C] = -0.10384 C (b) q = 1. 24x1018 x [-1.602x10-19 C] = -0.19865 C (c) q = 2.46x1019 x [-1.602x10-19 C] = -3.941 C (d) q = 1.628x1020 x [-1.602x10-19 C] = -26.08 C Chapter 1‚ Problem 2. Determine the current flowing through an element if the charge flow is given by (a) q(t ) = (3t + 8) mC (b) q(t ) = ( 8t 2 + 4t-2) C (c) q (t ) = 3e -t − 5e −2 t nC (d) q(t ) = 10 sin 120π t pC (e) q(t ) = 20e −4 t cos 50t μC ( ) Chapter 1‚ Solution 2 (a)
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Corporate Finance – Chapter 2 – Long Quiz 1 1) Marvelous Entertainment Group‚ Inc. had net income of $32.7 million in 2005. The firm paid no dividends. If there were no further changes to the stockholders ’ equity accounts‚ then _____ by $32.7 million. [ ] common stock must have increased √ [ ] retained earnings must have increased [ ] total stockholders ’ equity must have decreased [ ] capital surplus must have decreased [ ] the market value of the firm ’s stock must have
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AFIN858 Financial Management and Policy Week 1 S1 2014 “INTRODUCTION TO CORPORATE FINANCE” “Where is This Slide From”? • Most of the slides we use in this unit are provided by the Publisher of the required text “…as down-loaded from Connect…” • Sometimes we modify slides by adding or removing content. Other times we use slides from other sources. Occasionally we ‘make’ slides. • Note that lecture slides are not numbered sequentially. • Slides are identified in the lower RHS corner
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* PV(CF) = CF/(1+r)t AKA PV = FV/(1+r)t * NPV = PV(CFs) – Investment = -C0 +C1/(1+r)+C2/(1+r)2+C3/(1+r)3+… = ∑(Expected CFt)/(1+r)t – Investment * Perpetuity – pays a fixed amount C per period forever * P(C‚r) = C/r requires cash flow to begin NEXT period. If begin now‚ then PV = C + C/r * Annuity – fixed stream of cash flows that has a final period t * A(C‚r‚t) = C/r [1-1/(1+r)t] * Growing Perpetuity – G(C‚r‚g) = C/(r-g) C is initial cash flow‚ r is discount rate
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