Mid-Term Examination‚ Winter 2010 Level: Masters Full Marks: 100 Program: MBAe Section B Pass Marks: 60 Course: Financial Management Time: 3 Hrs. Term: III Candidates are required to be original and fair in the presentation of their answers. The figures in the parenthesis indicate the marks for respective question. Attempt all the questions Section A Attempt all questions Each question carries 6 marks [5 x 6 =30] 1. You have to pay $12‚000 a year in school
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company‚ thereby retaining as much benefit as possible for existing shareholders. In practice‚ this return will be such as to provide new shareholders with the same future returns as existing shareholders expect to obtain on their investment at market values. For example if the future return on ABC plc’s shares is 15% and future return on new issue is 20% if this is viewed quite simplistically‚ investors would sell their existing shares and take up the new offer. The price of existing shares would fall
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Week 2 Sources of Finance 1) Introduction It was explained in week 1 that this week’s lectures will focus primarily on institutions that provide finance. Finance has been defined by Chadwick and Kirkby (1995‚ p 38) in their book Financial Management (first edition‚ publisher Routledge) as a “system of costs and risks”. As we will see throughout the course‚ the notion of risk from an investor’s point of view is related to whether there is the accrual of the financial returns that are anticipated
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opportunity for investment is further complicated by a very long period before any returns are seen. 1.2 Theoretical Framework Financial assessment tools including payback period‚ accounting rate of return and net present value. In addition cash flow will be examined over the life of the project which has been limited to a fixed period of 15 years. 1.3 Methodology Firstly secondary research will be conducted into the market for rubber and substitute products. The primary research conducted
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figures were estimated regarding the construction of a new plant. Cost of plant 4‚000‚000 Annual cash inflows 4‚000‚000 Annual cash outflows 3‚600‚000 Estimated useful life 15 years Salvage value 2‚000‚000 Discount rate 11% Juan Optimist believes that these figures understate the true potential value of the plant. He suggests that by manufacturing its own bikes the company will benefit from a “buy Filipino” patriotism that he believes is common among bikers. He also notes that
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shelter provided by things other than debt‚ such as __________. 10) Preferred stock payment obligations are typically 11) If the yield to maturity for a bond is less than the bond’s coupon rate‚ then the market value of the bond is __________. 12) Assume that the par value of a bond is $1‚000. Consider a bond where the coupon rate is 9% and the current yield is 10%. Which of the following statements is true? 13) Certain countries have restrictions. In practice‚ U.S. investors have NOT
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precursor to decision d i i to proceed (feasibility phase) d (f ibili h ) Ongoing evaluation through design and planning phase Outline Session Objective & Context Financing projects Owner O Project Contractor Financial Evaluation Time value of money Present value NPV & Discounted cash flow Simple Examples Formulae IRR Missing factors Alberto De Marco 2 Financing Project Management Course Session Objective & Context The role of project financing p j g Mechanisms for project
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the best answer. Do not erase on your scantron (these are marked wrong from trace pencil lead). Ask for a new scantron if you wish to change your answer. Mismarked scantrons are NOT fixed. Name: __________________________________ Lecture Time: Instructor:________________________ 1. In 2008‚ Miles‚ Ana and Cindy‚ who are partners in the MAC Company‚ had average capital balances of $114‚000‚ $98‚000 and $128‚000‚ respectively. The partners share profits and losses by allowing a
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these decisions that people at one point thought of as a level of education only few are able to attain. In time that perspective has changed and in recent calculations the number of MBA graduates has increased by 250% (Articlesbase‚ 2006). In the closing case‚ we address the questions below to help Ben with his MBA decision. Question 1 How does Ben’s age affect his decision to get an MBA? Time plays a huge factor in Ben’s decision to get his MBA and to be able to make $100‚000 a year along with the
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choice would usually be the comparison of the Net Present Values of two investment opportunities as only the Net Present Values take into account the time value of money‚ the cash flow and cost of capital. Furthermore‚ the Net Present Value shows potential investors when they will be able to recuperate their investment. It also shows how much value is created or destroyed as a result of undertaking a project. Finally‚ the Net Present Value measures the attractiveness of a project in today’s pounds
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