Trident University Curtis L. Wooten FIN301 – Principles of Finance MOD2 Case – Present Value Professor Kathryn Woods 10 June 2013 Part I A. 15‚000 / 1.07% = 14‚018‚69 15‚000/1.04% = 14‚423.07 B. 6‚500/1.06% = 61‚320.75 12‚600/1.06% = 11886.792/1.06% = 11‚213.95 C. 49‚000‚000 / 1.07% = 45‚794‚392.52 61‚000‚000 / 1.07% = 57‚009‚345 / 1.07% = 53‚279‚762.42 85‚000‚000 / 1.07% = 79‚439‚252.33 / 1.07% = 74‚242‚291.90 / 1.07% = 69‚385‚319.53 49‚000‚000 / 1.05% = 46‚666‚666.67
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current ratio is better than a low current ratio and as we can see it increased in 2011. From investors’ view current ratio is too high (much more than 2)‚ which indicates that the company may not be using its current assets or its short-term financing facilities efficiently. This may also indicate problems in working capital management. 2. Quick ratio: is a measure of a company’s ability to meet its short-term obligations using its most liquid assets. For 2011= 2.2 and for 2010= 1.798. We
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Assignment on An Appraisal on Dividend Policy and Capital Structure of Fu-Wang Ceramic Industry Ltd. Corporate Finance (FIN-507) Sec-01 Prepared For: Dr. Tanvir Ahmed Chowdhury Department of Business Administration East West University Prepared By: Md. Iftekharul Haque ID: 2009-3-95-052 Shazzad Hossain ID: 2010-2-95-155 Md. Yahyea ID: 2009-1-95-040 Rakesh Mondal ID: 2010-1-95-025 Hasanuzzaman Chowdhuri ID:2009-1-95-095 Submission Date: March 30
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presented fields Rate = 8% Nper = 30 PMT =? Fv = 1‚350‚000 Type = blank PMT = $9‚416.15 $9‚416.15 is the amount required for 30 annual deposits with an 8% compound interest to yield $90‚000 for 15 years. 2. If a lump sum amount is deposited on my 35th birthday‚ then the principle will be compounded for 31 years. Calculation Using the compound interest formula A = P (1+r/n) nt Where; A = final amount‚ P = principal‚ r = interest rate n = number of times the interest is compounded per year
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Case 1 – New Heritage Doll Company 1. Set forth and compare the business cases for each of the two projections under consideration by Emily Harris. Which do you regard as more compelling? Productions was New Heritage´s largest division as measured by total assets‚ and easily its most asset-Intensive. Approximately 75 % of the division´s sales were made to the company´s retailing division‚ with the remaining 25% comprising private label goods manufactured for other firms. The division revenue figures
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Shapiro: Chapter 2: Capital-Budgeting Principles and Techniques QUESTIONS 1. a. What is the relationship between accounting income and economic profit? Answer: Accounting income is calculated by taking revenues and subtracting all cash and non-cash expenses (such as depreciation). Accounting income also often recognizes losses for tax purposes as well‚ even though the economic loss may have taken place at another time. Economic profit is the sum of the present values of all the cash flows
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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 contract that essentially keeps the machine in new condition forever. Net of the cost of the service contract‚ the machine would then produce cash flows of $4‚500 per
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Chapter 06 Discounted Cash Flow Valuation Multiple Choice Questions 1. An ordinary annuity is best defined by which one of the following? A. increasing payments paid for a definitive period of time B. increasing payments paid forever C. equal payments paid at regular intervals over a stated time period D. equal payments paid at regular intervals of time on an ongoing basis E. unequal payments that occur at set intervals for a limited period of time 2. Which one of the following
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------------------------------------------------- Ch. 5: 1 (a-e)‚ 4‚ 5‚ 7‚ 10‚ 11‚ 12‚ 15 ------------------------------------------------- FM1 Takumi KAWAI‚ Pham NGUYEN‚ Yang CHEN‚ Bi CHAO #1 a. What is the payback period on each of the following projects? Payback period: A 3 years‚ B 2 years‚ C 3years b. Given that you wish to use the payback rule with a cutoff period of two years‚ which projects would you accept? “B” Only B meetsthe given cutoff period. c. If you use a cutoff period of three years‚ which projects would you
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using the PV function NPV (112‚110) We now calculate the PV of debt tax shield Year Debt Outstanding at Start of Year Interest Interest Tax Shields Present Value of Tax Shields 1 5‚000‚000 400‚000 140‚000 129‚630 2 4‚500‚000 360‚000 126‚000 108‚025 3 4‚000‚000 320‚000 112‚000 88‚909 4 3‚500‚000 280‚000 98‚000 72‚033 5 3‚000‚000 240‚000 84‚000 57‚169 6 2‚500‚000 200‚000 70‚000 44‚112 7 2‚000‚000 160‚000 56‚000
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