Question 1
(5 points) $50 today is worth MORE than $50 tomorrow.
Your Answer Score Explanation
True ✔ 5.00 Correct. You understand Time value of money. Total 5.00 / 5.00
Question Explanation

We have assumed time value of money is positive.
Question 2
(5 points) At an interest rate of 10% it is better to have $100 today than $120 in 2 years. Your Answer Score Explanation
True ✔ 5.00 Correct; it is compounding!
Total 5.00 / 5.00
Question Explanation

All about compounding!
Question 3
(5 points) Shawn wants to buy a new telescope. He estimates that it will take him one year to save the money and that the telescope will cost $200. At an interest rate of 6%, how much does Shawn need to set aside today to purchase the telescope in one year? (Enter just the number without the $ sign or a comma) Answer for Question 3

You entered:
189
Your Answer Score Explanation
189 ✔ 5.00 Correct, You know it has to be less than $200. Total 5.00 / 5.00
Question Explanation

Simple PV calculation.
Question 4
(10 points) Jeff has $1,000 that he invests in a safe financial instrument expected to return 3% annually. Marge has $500 and invests in a more risky venture that is expected to return 7% annually. Who has more after 20 years? And how much does he/she have in FV terms? Your Answer Score Explanation

Marge; 1935 ✔ 10.00 Correct. You know how to calculate FVs! Total 10.00 / 10.00
Question Explanation

FV calculations of simple one-shot cash flows. Shows power of compounding. Question 5
(10 points) Don has just received a cash gift of $50,000 from his rich eccentric uncle. He wants to set it aside to pay for his daughter Cynthia’s college education. Cynthia will begin college in 10 years and Don’s financial advisor says that she can earn 7% interest on an investment in a special college fund. How much will Don have in the fund when Cynthia begins college? (Enter just the number without the $ sign or a comma; round to...

...Question 1
(5 points) $50 today is worth MORE than $50 tomorrow.
Your Answer Score Explanation
True ✔ 5.00 Correct. You understand Time value of money.
False
Total 5.00 / 5.00
Question Explanation
We have assumed time value of money is positive.
Question 2
(5 points) At an interest rate of 10% it is better to have $100 today than $120 in 2 years.
Your Answer Score Explanation
True ✔ 5.00 Correct; it is compounding!
False
Total 5.00 / 5.00
Question Explanation
All about compounding!
Question 3
(5 points) Megan wants to buy a designer handbag and plans to earn the money babysitting. Suppose the interest rate is 6% and she is willing to wait one year to purchase the bag. How much babysitting money (to the nearest whole dollar) will she need to earn today to buy the bag for $400 one year from now? (Enter just the number without the $ sign or a comma)
Answer for Question 3
You entered:
377
Your Answer Score Explanation
377 ✔ 5.00 Correct. You know it has to be less than $400.
Total 5.00 / 5.00
Question Explanation
Simple PV calculation.
Question 4
(10 points) Jeff has $1,000 that he invests in a safe financial instrument expected to return 3% annually. Marge has $500 and invests in a more risky venture that is expected to return 7% annually. Who has more after 20 years? And how much does he/she have in FV terms?
Your Answer Score Explanation
Marge; 1935 ✔ 10.00 Correct....

...Question 1
(5 points) $100 today is worth the SAME as $100 tomorrow.
Your Answer
Score
Explanation
True
False
Correct
5.00
Correct. You understand time value
Total
5.00 / 5.00
Question Explanation
We have assumed that time value of money is positive.
Question 2
(5 points) At an interest rate of 10% it is better to have $100 today than $120 in 2 years.
Your Answer
Score
Explanation
True
Correct
5.00
Correct; it is compounding!
False
Total
5.00 / 5.00
Question Explanation
All about compounding!
Question 3
(5 points) Shawn wants to buy a new telescope. He estimates that it will take him one year to save the money and that the telescope will cost $200. At an interest rate of 6%, how much does Shawn need to set aside today to purchase the telescope in one year? (Enter just the number without the $ sign or a comma)
Answer for Question 3
You entered:
Your Answer
Score
Explanation
189
Correct
5.00
Correct, You know it has to be less than $200.
Total
5.00 / 5.00
Question Explanation
Simple PV calculation.
Question 4
(10 points) Jeff has $1,000 that he invests in a safe financial instrument expected to return 3% annually. Marge has $500 and invests in a more risky venture that is expected to return 7% annually. Who has more after 20 years? And how much does he/she have in FV terms?
Your Answer
Score
Explanation
Jeff; 1935
Marge; 1935
Correct
10.00
Correct. You know how to calculate FVs!
Marge; 1806
Jeff; 1604
Marge; 1604
Jeff; 1806...

...1. Describe two examples of important things that financial planning skills can help you do, and explain why these things are important to you personally. (4-6 sentences. 2.0 points)
2 important things financial planning skills can help you do is one, it can help you create budgets.
creating budgets can help you save your money. Another thing it can help with is setting goals. this goes along with saving and creating budgets so you can afford, for example a car, or a house in the future.
2. List two examples of goods you have purchased in the past or may purchase in the future. (Complete sentences are not necessary. 0.5 points)
I haven’t really made any big purchases, I usually spend my money on little things I need and clothes. I do plan on making a big purchase in the near future for a car.
3. List two examples of services you have purchased in the past or may purchase in the future. (Complete sentences are not necessary. 0.5 points)
Um, we have to pay for snow plowing. A Purchase for a service i could make in the future is a taxi.
4. One of the functions of money is as a store of value. How does inflation affect money's ability to store value? (3-6 sentences. 2.0 points)
Inflation of money makes store value go up. The more available money is the more things will become expense. Also in reverse, if there is a lot of something store values isn’t as high. Opposed to something that’s a little more scarce, would be worth more in store value.
5....

...Question 1
(5 points) $50 today is worth MORE than $50 tomorrow.
Your Answer Score Explanation
True Correct 5.00 Correct. You understand Time value of money.
False
Total 5.00 / 5.00
Question Explanation
We have assumed time value of money is positive.
Question 2
(5 points) $100 invested for 10 years at 12% interest is worth more in FV terms than $200 invested for 10 years at 4% interest.
Your Answer Score Explanation
True Correct 5.00 Correct. You know the mechanics for calculating FV.
False
Total 5.00 / 5.00
Question Explanation
All about compounding.
Question 3
(5 points) Shawn wants to buy a new telescope. He estimates that it will take him one year to save the money and that the telescope will cost $200. At an interest rate of 6%, how much does Shawn need to set aside today to purchase the telescope in one year? (Enter just the number without the $ sign or a comma)
Answer for Question 3
You entered:
Your Answer Score Explanation
189 Correct 5.00 Correct, You know it has to be less than $200.
Total 5.00 / 5.00
Question Explanation
Simple PV calculation.
Question 4
(10 points) Jeff has $1,000 that he invests in a safe financial instrument expected to return 3% annually. Marge has $500 and invests in a more risky venture that is expected to return 7% annually. Who has more after 20 years? And how much does he/she have in FV terms?
Your Answer Score Explanation
Jeff; 1806
Jeff; 1935
Jeff; 1604...

...MBA Decision
Quent Mikeal
BUS650: Managerial Finance
Instructor: Rick Kwan
February 22, 2013
MBA Decision
1. Age is obviously an important factor. The younger an individual is, the more time there is for the (hopefully) increased salary to offset the cost of the decision to return to school for a MBA. The cost includes both the explicit costs such as tuition, as well as the opportunity cost of the lost salary.
2. Perhaps the most important non quantifiable factors would be whether or not he is married and if he has any children. With a spouse and/or children, he may be less inclined to return for an MBA (especially full-time) since his family may be less amenable to the time and money constraints imposed by classes. Other factors would include his willingness and desire to pursue an MBA, job satisfaction, and how important the prestige of a job is to him, regardless of the salary.
3. He has three choices: remain at his current job, pursue a Wilton MBA, or pursue a Mt. Perry MBA. We need to find the after tax value of each, Therefore:
Remain at current job:
After tax salary = $55,000(1 – .26) = $40,700
His salary will grow at 3 percent per year, so the present value of his after tax salary is:
PV = C...

...able to evaluate own ability to lead others
When during initial meetings the manager elicits the attention and the respect of all the employees, by explaining the objectives that should be reached within a time frame mainly selling a number of products within a set time frame and try to attract clients namely in the range of hundred a week. The manager appreciates the talents of the employees and tells them so specifically; “I know that you can succeed; I have full trust in all of you. However in case you need clarification or information or direction I am at your full disposal whenever you feel you want to contact me, all of you have been duly trained and I have been through your personal files and know that you can make it, so we can start as from today”. Frank two-way discussions between the manager and the employees will do away with any pent-up feelings and employees will relish the opportunity to provide their verbal contributions. This informal opportunity to disseminate and accumulate information will be the right forum to avail oneself of the entire information possible, do away with misinformation and disintegrate prejudices. Every week an analysis is carried out by the manager to check whether the objectives have been reached or whether new adjustments have to be made or maybe change the benchmark in so doing the manager has the ability to know where he stands for future reference and adapts the approaches for his personnel...

...1. Calculate TRUST’s company after-tax WACC. The risk-free rate was 4.21%, the market risk premium was 6% and the company tax rate was 30%. The WACC should be rounded to four decimal places.
After-tax WACC = rD (1-Tc) D/V + rE E/V
rE = rf + βequity(rm – rf)
rE = 0.0421 + 0.81(0.06)
rE = 0.0907
E = number of outstanding shares x current share price
E = 60 million x $3.43
E = $205.8 million
D = $44 million bank loans + $1.2 million short-term hire purchase commitments
D = $45.2 million
V = $205.8 million + $45.2 million
V = $251 million
After-tax WACC = (1-0.3)(0.0348 x 44/251 + 0.0618 x 1.2/251) + 0.0907 x 205.8/251
After-tax WACC = 0.0789
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 industry competitors if the industry equity beta was 2.10?
Using industry equity beta to determine the cost of equity suggests that the RV Division’s equity risk is the same as that of the industry. This indicates that the difference in business risk between the RV Division and its...

...
Cash Distribution Plan
Advanced Accounting ACC 407
Assignment1Week1
LO2-16-8 Cash Distribution Plan
Adams, Peters, and Blake share profits and losses for their APB Partnership in a ratio of 2:3:5. When they decide to liquidate, the balance sheet is as follows:
Assets
Liabilities and Equities
Cash $40,000
Liabilities $50,000
Adams, Loan 10,000
Adams, Capital 55,000
Other Assets 200,000
Peters, Capital 75,000
Blake, Capital 70,000
Total Assets $ 250,000
Total Liabilities and Equities $250,000
Liquidation expenses are expected to be negligible. No interest accrues on loans with partners after termination of the business.
Required
Prepare a cash distribution plan for the APB Partnership.
APB Partnership
Cash Distribution Plan
Loss Absorption Power Capital Accounts
Profit and Loss Percentages
Adams
Peters
Blake
Adams
Peters
Blake
20%
30%
50%
Preliquidation Capital Balance
(55,000)
(75,000)
(70,000)
Loss Absorption Power (Capital Balances/Loss Percentage)
(275,000)
(250,000)
(140,000)
Decrease Highest LAP to Next Highest: Adams (25,000*.20)
25,000
5,000
(250,000)...