Lovely Professional University‚ Punjab Course Code Course Title Course Planner Lectures FIN302 BASIC FINANCIAL MANAGEMENT 16414::Jyoti Verma Course Category Tutorials Practicals Credits Courses with numerical and conceptual focus 4.0 1.0 0.0 TextBooks Sr No Title Author Edition Year Publisher Name T-1 Essentials of Financial Management I M Pandey 3rd 2012 Vikas Publication Reference Books Sr No Title Author Edition
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assumptions that can be significant in determining when to use the present value or internal rate of return methods. Under the net present value method‚ cash flows are assumed to be reinvested at the firm ’s weighted average cost of capital Points earned on this question: 1 Question 2 (Worth 1 points) A project has initial costs of $3‚000 and subsequent cash inflows in years 1 – 4 of $1350‚ 275‚ 875‚ and 1525. The company ’s cost of capital is 10%. Calculate IRR for this project. 10
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time value of money (TVM) in business? What considerations are made when calculating TVM? How may you use TVM to create your own‚ or someone else’s‚ retirement plan? Week Three Discussion Questions • How do you define working capital? What may happen if an organization neglected to manage its working capital? What techniques do you recommend for your organization? Why? • What is capital planning? Why is the internal rate of return important to an organization? Why is net present value
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_______________ 1. What is the net present value of a project with the following cash flows if the discount rate is 14 percent? [pic] A. -$3‚140.43 B. -$929.90 C. $247.181 D. $1‚027.67 E. $1‚127.08 2. Timothy is considering an investment of $10‚000. This investment is supposedly going to provide him with cash inflows of $2‚500 in the first year and $6‚000 a year for the following 2 years. At a discount rate of zero percent this investment has a net present value (NPV) of _____‚ but at
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company is willing to accept before starting a project. It is used in project evaluation to evaluate the amount of return on the project. A common method for evaluating the hurdle rate is apply the discounted cash flow method to the project‚ like net present value. 2. How does Teletech Corporation currently use the hurdle rate? They used it based on the firm’s rating‚ beta‚ cost of capital‚ and they calculated WACC of 9.3% for the whole corporation. 3. What are Rick Phillips’s arguments for the
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00‚000 by making a down payment of Rs.1‚50‚000 and remainder in equal instalments of Rs. 1‚50‚000 for six years. What is the rate of interest to the firm? 2. a.Explain the mechanism of calculating the present value of cash flows..What is annuity due? How can you calculate the present and future values of an annuity due? Illustrate b.”The increase in the risk-premium of all stocks‚irrespective of their beta is the same when risk aversion increases” Comment with practical examples 3. a.How leverage
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1. Basic present value calculations Calculate the present value of the following cash flows‚ rounding to the nearest dollar: a. A single cash inflow of $12‚000 in five years‚ discounted at a 12% rate of return. b. An annual receipt of $16‚000 over the next 12 years‚ discounted at a 14% rate of return. c. A single receipt of $15‚000 at the end of Year 1 followed by a single receipt of $10‚000 at the end of Year 3. The company has a 10% rate of return. d. An annual receipt of $8‚000 for three
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000) (8‚100) Tax cost (2‚730) (3‚075) (4‚590) Net cash flow $6‚020 $5‚175 $10‚710 Discount factor (6%) .943 .890 Present value $6‚020 $4‚880 $9‚532 NPV $20‚432 11. a. Year 0 Year 1 Year 2 Year 3 Year 4 Before-tax cash flow $(500‚000) $52‚500 $47‚500 $35‚500 $530‚500 Tax cost (7‚875) (7‚125) (5‚325) (4‚575) After-tax cash flow 44‚625 40‚375 30‚175 525‚925 Discount factor (7%) .935 .873 .816 .763 Present value $(500‚000) $41‚724 $35‚247 $24‚623 $401‚281 NPV
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is that the offer from Heritage Partners helps Fojtasek to avoid the fear of losing control to the firm and a huge interest expense payment from long term debt that is implied by traditional buy-out and leveraged recapitalizations. Fair market value of the firm: Rm: Prime rate = 9% rf: risk free rate = 7.2% Average Unleveraged beta bu = = .839 Assume that growth rate : g = 2%‚ RPm = 4% ‚ tax rate is 35% Unlevered cost of equity rsu = rf + RPm (bu) = 7.2% + 4%(.839) = 10.56% Operating
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Papa Geo’s – Restaurant Budget Proposal For 2012 - 2017 BUSN-278 [Term] Professor[name] DeVry University ------------------------------------------------- Table of Contents Section | Title | Subsection | Title | Page Number | 1.0 | Executive summary | | | | 2.0 | Sales Forecast | | | | | | 2.1 | Sales Forecast | | | | 2.2 | Methods and Assumptions | | 3.0 | Capital Expenditure Budget | | | | 4.0 | Investment Analysis | | | | | | 4.1 | Cash flows
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