8. Calculating Interest Rates. In 2010 the average price per metre for owner-occupied flats in Copenhagen was about 23.000 Danish kroner. In 1995 the average price was around 6.000 Danish kroner. What was the annual increase in selling price?

9. Calculating the Number of Periods. You’re trying to save to buy a new 170.000 Ferrari. You have 40.000 today that can be invested at your bank. The bank pays 5 per cent annual interest on its accounts. How long will it be before you have enough to buy the car. PV = FV / (1 + r)^t

11. Calculating Present Values. You have just received notification that you have won the 1 million first prize in the Euro Lottery. However, the prize will be awarded on your 100th birthday (assuming you’re around to collect), 80 years from now. What is the present value of your windfall if the appropriate discount rate is 12 per cent? t = 80

...WEEK 4 ASSIGNMENT 1
1
Week 4 Assignment 1 Edwin Lopez-Petrilli Professor William Hall Fundamentals of CorporateFinance Tuesday July 26, 2011
WEEK 4 ASSIGNMENT 1
2
Explain why market prices are useful to a financial manager. Financial managers are tasked with making investment decisions, financing, and managing cash flows from operating activities therefore when prices from competitive markets determine the...

...Problems form CorporateFinance
1. Compute the following:
Present Value | Years | Interest Rate | Future Value |
$227,382 | 20 | 5 | |
| 16 | 17 | $886,073 |
$25,000 | 18 | | $143,625 |
$1,941 | | 5 | $3,700 |
2. At 9 percent interest, how long does it take to double your money? To quadruple it?
3. In 2006, a gold $3 coin minted in 1879 was auctioned for $9.000. For this to have been true, what was the annual increase in...

...Calculate the RV Division WACC using Stephens’s method in paragraph 20.
rE = rf + βequity(rm – rf)
rE = 0.0421 + 2.1(0.06)
rE = 0.1681
Using TRUST’s debt-to-equity mix of 21%:
Pre-tax divisional WACC = 0.1442 = (rD x 0.21) + (0.1681 x 0.79)
From above:
rD = 0.0543
After-tax divisional WACC = (1-0.3)(0.0543 x 0.21) + (0.1681 x 0.79)
After-tax divisional WACC = 0.1408
What could be deduced about the relative business risk of the RV Division compared to its...

...equation for equity gives us:
Common stock = $2,849,000 − 1,201,500 − 1,246,000 = $401,500
2.
award:
10 out of
10.00
points
Corporation Growth has $83,000 in taxable income, and Corporation Income has $8,300,000 in taxable
income. Use the tax rates from Table 2.3.
a. What is the tax bill for each firm?
Firms
Corporation Growth
Corporation Income
Tax Bill
$ 16,470
$ 2,822,000
b. Suppose both firms have identified a new project that will increase taxable income by $10,000....

...= 365 days/Payables turnover
Payables period = 365 days/6.2346
Payables period = 58.54 days
So, the cash cycle is:
Cash cycle = 94.52 days – 58.54 days
Cash cycle =35.98 days
The firm is receiving cash on average 35.98 days after it pays its bills.
8.
award:
10 out of
10.00
points
Some recent financial statements for Smolira Golf Corp. follow.
SMOLIRA GOLF
2011 and 2012 Balance Sheets
Assets
Liabilities and Owners’ Equity
2011
Current assets
Cash
Accounts receivable...

...Questions and Problems
Page 1 of 3
CorporateFinance eBook
9/e Content
Chapter8: Interest Rates and Bond Valuation
Questions and Problems
1. Valuing Bonds What is the price of a 10-year, zero coupon bond paying $1,000 at maturity if the YTM is: BASIC (Questions 1– 12) a. 5 percent? b. 10 percent? c. 15 percent? 2. Valuing Bonds Microhard has issued a bond with the following...

...CONCEPT QUESTIONS - CHAPTER 1
1.1 ( What are the three basic questions of corporatefinance?
a. Investment decision (capital budgeting): What long-term investment strategy should a firm adopt?
b. Financing decision (capital structure): How much cash must be raised for the
required investments?
c. Short-term finance decision (working capital): How much short-term cash flow does...

...Chapter 8Questions11-20
8.11 Discuss what is meant by ABC analysis of inventory. What are several measures that can determine ABC status?
Murphy,Jr., Paul R.; Wood, Donald Michael (2014-01-14). Contemporary Logistics (11th Edition) (Page 142). Prentice Hall. Kindle Edition.
ABC analysis of inventory: can be applied in several different ways, recognizes that inventories are not equal value to a firm and that, as a result, all...

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