e TCH321 – CORPORATE FINANCE MOCK EXAM Time: 1 hour 30 minutes The exam lasts 1 hour and 30 minutes and consists of 5 questions. Approved calculators are permitted. You are not allowed to use Excel. This is a closed book exam. You are NOT permitted to access any other material in either written or electronic form. All numerical answers should be reported to TWO decimal places. To ensure the accuracy of your answer‚ you should perform all intermediate calculations to at least THREE decimal places
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CHAPTER 9 PROBLEM #2 A. PV= (-50‚000/1.40)- (20‚000/{1.40^2} + [100‚000/ (1.40^3] + [400‚000/(1.40^4) + {800‚000/[1.40^4] = -50‚000 + (10‚204) + 36‚443 + 104‚123+ 520‚616 = $ 615‚264 B. PV= (35‚714) + (10‚204) + 36‚443 + 104‚123 + 671‚688= $766‚336 C. (35‚714)+ (10‚204) + 36‚443+ 104‚123 + 1‚543‚256 = $1‚637‚904 D. PV AT 40%= $1‚637‚903.85 INVESTMENT @ $3‚000‚000.00 POST-MONEY VALUATION= $1‚637‚903.85 + 3‚000‚000= $ 4‚637‚903.85 PERCENT OF OWNERSHIP BY INVESTOR: $3‚000‚000/ $4‚637‚903
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Chapter 1 Starting up a Proprietorship Proprietorship-an unincorporated business owned by one individual Easy to start Three advantages o Easily and inexpensively formed o Few government regulations o Its income is not subject to public taxation Three limitations o May be difficult for them to obtain capital needed for growth o Proprietor has unlimited personal liability o Life of a proprietorship is limited to the life of the founder Used primarily for small businesses Only account for
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Chapter 3 #2 - When is a company’s competitive advantage most likely to endure over time? A company’s competitive advantage is most likely to endure over time when the company has built barriers to imitation‚ which make it difficult for a competitor to copy the company’s distinctive competencies. Another element needed is the ability to quickly react to changes in the customer’s needs and have a high absorptive capacity in order to identify‚ value‚ assimilate‚ and use new knowledge. Lastly‚ the
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Chapter 4 Process Costing Chapter 4 Process Costing Solutions to Questions 4-1 A process costing system should be used in situations where a homogeneous product is produced on a continuous basis. 4-2 Job-order and processing costing are similar in the following ways: 1. Job-order costing and process costing have the same basic purposes—to assign materials‚ labor‚ and overhead cost to products and to provide a mechanism for computing unit product costs. 2. Both systems use the same basic
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Capital Budgeting Mini Case There are many different methods business owners use to efficiently analyze business investment. One of these effective methods is the calculation of the net present value or NPV. The second most effective method would be the calculations of the internal rate of return or IRR. There are also other useful methods as well‚ for example‚ the payback rule and the profitability index. Many business owners use the above procedures to help them in their decision making of acquiring
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1. What appears to be the problem areas in the Hobby Horse Company? The problem with Hobby Horse Company is that they were having a tough year throughout 2011. The company has $45 million loan that is due at the end of September‚ however the company does not have the means to cover the cost of the loan. Looking at the financial statement the company has fairly high leverage where their equity is not as strong. In addition‚ their current assets don’t cover current liabilities—meaning that the company
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Trident University International Willie Bates Module 2 Case ITM524: Foundations of Information Technology Management Dr. Mina Richards Introduction We live in an environment which changes often. In the business world‚ what is in demand today for an organization may not be a requirement for tomorrow. Smart managers know that organizations that succeed do so because they adjust to keep up with the changes that are taking place (Harmon‚ 2007). Change in business comes in many forms and
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Internet Mini Case #2 Tech Data Corporation Maryanne M. Rouse The Company TECH DATA CORPORATION’S (TECD) AGGRESSIVE GROWTH HAD TAKEN THE COMPANY from 10 employees and $2 million in sales in 1983 to approximately 8‚000 employees and $15.7 billion in sales for fiscal 2002 (fiscal year ended January 31‚ 2003) and secured the company’s position as a leading distributor of information technology (IT)‚ logistics management‚ and other value-added services to “solution providers‚” including value-added
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the projects that are acceptable. As previously stated project D is unacceptable. Project B would be the number one choice‚ project C would follow‚ and project A would be the last choice. Rank Projects 1 Project B 2 Project C 3 Project A 4 Unacceptable Project D Which project do you recommend and why? Explain why each of the projects not chosen was rejected. After
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