BACHELOR OF INTERNATIONAL BUSINESS (HONS) YEAR 2 TRIMESTER 1 UKFF2083 FINANCIAL MANAGEMENT TUTORIAL (Question) Tutorial 1 Refer to Unit Plan‚ brief the students on learning objectives and learning outcomes of this unit. Refer to Unit Plan‚ remind students on coursework assessment (mid-term test 1 and 2). Mid-Term Test 1 will be given in WEEK 5 to monitor students’ progress on the understanding of the lectures and tutorials from Topic 1 to 3. Mid Tem test 2 will be given in WEEK 9
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using such historical data for market inputs as opposed to inputs from a set of scenarios‚ like those given in the table above exercise 11.2? 11.5 Discount your answer in exercise 11.4 at a risk-free rate of 4 percent per year to obtain the present value. 11.6 Explain why the answer to exercise 11.5 differs from the answer in Example 11.2. 1 Advanced Corporate Finance I SS 2012 Problem Set 1 Valuing Cash Flows Exercise 2 (Ex. 13.1 - 13.7 GT):) Exercises 13.1 - 13.7 make use of the following
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CHAPTER 4 DISCOUNTED CASH FLOW VALUATION Solutions to Questions and Problems 10. To find the future value with continuous compounding‚ we use the equation: FV = PVeRt a. b. c. d. FV = $1‚000e.12(5) FV = $1‚000e.10(3) FV = $1‚000e.05(10) FV = $1‚000e.07(8) = $1‚822.12 = $1‚349.86 = $1‚648.72 = $1‚750.67 23. We need to find the annuity payment in retirement. Our retirement savings ends at the same time the retirement withdrawals begin‚ so the PV of the retirement withdrawals will be the FV of
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GR HOTELS INC Preliminary Report To: Andrew Mayd‚ CEO From: Chris Mell‚ CMA Subject: Analysis to increase occupancy rate Date: January 15th ‚ 2008 Introduction. The report was prepared for GR Hotels Board of Directors review. It examines current opportunities to increase profitability. Several options were examined and the most plausible solution proposed – Upgrade to upscale both hotels. This measure will increase long term profits and improve position in the
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Investment in Assets and required returns · Cash flow determination · Non-DCF and DCF techniques Case: Investment analysis and Lockheed Tri Star Assignment Questions 1. Compute the payback‚ net present value (NPV)‚ and internal rate of return (IRR) for this machine. Should Rainbow purchase it? Assume that all cash flows (except the initial purchase) occur at the end of the year‚ and do not consider taxes. 2. For a $500 per year additional expenditure‚ Rainbow can get a "Good As New" service
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d. 10.5% 4. The cost of preferred stock is equal to: a. the preferred stock dividend divided by market price b. the preferred stock dividend divided by its par value c. (1 - tax rate) times the preferred stock dividend divided by net price d. preferred stock dividend divided by the net market price 5. The XYZ Company is planning a $50 million expansion. The expansion is to be financed by selling $20 million in new debt and $30 million in new common stock. The before-tax
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Cash Flows Chapter 11: Estimating Growth Chapter 12: Closure in Valuation: Estimating Terminal Value Chapter 13: Dividend Discount Models Chapter 14: Free Cashflow to Equity Models Chapter 15: Firm Valuation: Cost of Capital and APV Approaches Chapter 16: Estimating Equity Value Per Share Chapter 17: Fundamental Principles of Relative Valuation Chapter 18: Earnings Multiples Chapter 19: Book Value Multiples Chapter 20: Revenue and Sector-Specific Multiples Chapter 21: Valuing Financial Service
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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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excess return required from an investment in a risky asset over that required from an risk-free investment. 4.What is principle of diversification? Spreading an investment across a number of asset will eliminate some‚ but not all‚of the risk. 5.What is systematic risk? A risk that influences a large number of assets. 6. What is unsystematic risk? A risk that affects at most a small number of assets. 7.What is portfolio theory? Group of assets such as stocks and bonds held by an investor. 8
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record a provision in relation to environmental cost of retiring assets (to reserve environmental liabilities) if its fair value could be reasonably estimated. How do you think companies would go about estimating such a provision? Estimation (or estimating) is the process of finding an estimate‚ or approximation‚ which is a value that is usable for some purpose even if input data may be incomplete‚uncertain‚ or unstable. The value is nonetheless usable because it is derived from the best information
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