MAT 126 Week 1 Assignment Geometric and Arithmetic Sequence

 This archive file of FIN 515 Week 6 Problems Solutions contains:


 Prob 16-1

 Prob 16-2

 Prob 16-3

 Prob 16-4

 Prob 16-5

Business - General Business
 1. (TCO A) Which of the following does NOT always increase a company's market value? (Points : 5)





 Increasing the expected growth rate of sales
 Increasing the expected operating profitability (NOPAT/Sales)
 Decreasing the capital requirements (Capital/Sales)
 Decreasing the weighted average cost of capital
 Increasing the expected rate of return on invested capital















 2. (TCO F) Which of the following statements is correct? (Points : 5)





 The NPV, IRR, MIRR, and discounted payback (using a payback requirement of 3 years or less) methods always lead to the same accept/reject decisions for independent projects.
 For mutually exclusive projects with normal cash flows, the NPV and MIRR methods can never conflict, but their results could conflict with the discounted payback and the regular IRR methods.
 Multiple IRRs can exist, but not multiple MIRRs. This is one reason some people favor the MIRR over the regular IRR.
 If a firm uses the discounted payback method with a required payback of 4 years, then it will accept more projects than if it used a regular payback of 4 years.
 The percentage difference between the MIRR and the IRR is equal to the project’s WACC.







 3. (TCO D) Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 25% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company's last dividend, D 0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?

 a. $26.77
 b. $27.89
 c. $29.05
 d. $30.21
 e. $31.42

 4. (TCO G) Singal Inc. is preparing its cash budget. It expects to have sales of $30,000 in January, $35,000 in February, and $35,000 in March. If 20% of sales are for cash, 40% are credit sales paid in the month after the sale, and another 40% are credit sales paid 2 months after the sale, what are the expected cash receipts for March?

 a. $24,057
 b. $26,730
 c. $29,700
 d. $33,000
 e. $36,300

 1. (TCO H) Zervos Inc. had the following data for 2008 (in millions). The new CFO believes (a) that an improved inventory management system could lower the average inventory by $4,000, (b) that improvements in the credit department could reduce receivables by $2,000, and (c) that the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2,000. Furthermore, she thinks that these changes would not affect either sales or the costs of goods sold. If these changes were made, by how many days would the cash conversion cycle be lowered?

 2. (TCO C) Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15, net 50. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its nonfree trade credit? (Assume a 365-day year.)

 a. 20.11%
 b. 21.17%
 c. 22.28%
 d. 23.45%
 e. 24.63%

 3. (TCO E) You were hired as a consultant to the Quigley Company, whose target capital structure is 35% debt, 10% p

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Whatever financial assistance package pays for your first year should not be set and then forgotten. Revisit your opportunities every semester. Picking up work-study vacancies, part-time jobs on campus and getting department scholarships can all replace loans to reduce your post-graduation obligations. Never take out a loan your first year and then run it out all through college if you can get better money.