FIN 350 Complete Class
FIN 350 Complete Class
Just Click on Below Link To Download
This Course:
https://cutt.ly/93aC4GS
FIN 350 Complete Class
FIN350
FIN 350 Week 1 Module 1 Practice Problems
Complete the following problems from the textbook:
• Chapter 1, P1-2
• Chapter 2, P2-4, P2-6, and Integrative Case 1
Follow these instructions for completing and
submitting your assignment:
1. Do all work in Excel. Do not submit Word files or
*.pdf files.
2. Submit a single spreadsheet file for this
assignment. Do not submit multiple files.
3. Place each problem on a separate spreadsheet tab.
4. Label all inputs and outputs and highlight your
final answer.
5. Follow the directions in “Guidelines for Developing
Spreadsheets.”
You are not required to submit this assignment to
Turnitin.
FIN 350 Week 2 Module 2 Practice Problems
Complete the following problems from chapter 3 in the
textbook:
• P3-3
• P3-6
• P3-10
• P3-16
• P3-18
• P3-20
• P3-21
Follow these instructions for completing and
submitting your assignment:
1. Do all work in Excel. Do not submit Word files or
*.pdf files.
2. Submit a single spreadsheet file for this
assignment. Do not submit multiple files.
3. Place each problem on a separate spreadsheet tab.
4. Label all inputs and outputs and highlight your
final answer.
5. Follow the directions in “Guidelines for Developing
Spreadsheets.”
You are not required to submit this assignment to
Turnitin.
FIN 350 Week 3 Module 3 Practice Problems
P4–5 Classifying inflows and outflows of cash Classify
each of the following items as an inflow (I) or an outflow (O) of cash, or as
neither (N).
P4–6 Finding operating and free cash flows Consider
the following balance sheets and selected data from the income statement of
Keith Corporation.
a. Calculate the firm’s net operating profit after
taxes (NOPAT) for the year ended December 31, 2015, using Equation 4.1.
b. Calculate the firm’s operating cash flow (OCF) for
the year ended December 31, 2015, using Equation 4.3.
c. Calculate the firm’s free cash flow (FCF) for the
year ended December 31, 2015, using Equation 4.4.
d. Interpret, compare, and contrast your cash flow
estimates in parts b and c.
P4–9 Cash budget: Basic Grenoble Enterprises had sales
of $50,000 in March and $60,000 in April. Forecast sales for May, June, and
July are $70,000, $80,000, and $100,000, respectively. The firm has a cash
balance of $5,000 on May 1 and wishes to maintain a minimum cash balance of
$5,000. Given the following data, prepare and interpret a cash budget for the
months of May, June, and July.
(1) The firm makes 20% of sales for cash, 60% are
collected in the next month, and the remaining 20% are collected in the second
month following sale.
(2) The firm receives other income of $2,000 per
month.
(3) The firm’s actual or expected purchases, all made
for cash, are $50,000, $70,000, and $80,000 for the months of May through July,
respectively.
(4) Rent is $3,000 per month.
(5) Wages and salaries are 10% of the previous month’s
sales.
(6) Cash dividends of $3,000 will be paid in June.
(7) Payment of principal and interest of $4,000 is due
in June.
(8) A cash purchase of equipment costing $6,000 is
scheduled in July.
(9) Taxes of $6,000 are due in June.
P4–15 Pro forma income statement The marketing
department of Metroline Manufacturing estimates that its sales in 2016 will be
$1.5 million. Interest expense is expected to remain unchanged at $35,000, and
the firm plans to pay $70,000 in cash dividends during 2016. Metroline
Manufacturing’s income statement for the year ended December 31, 2015, and a
breakdown of the firm’s cost of goods sold and operating expenses into their
fixed and variable components are given below.
a. Use the percent-of-sales method to prepare a pro
forma income statement for the year ended December 31, 2016.
b. Use fixed and variable cost data to develop a pro
forma income statement for the year ended December 31, 2016.
c. Compare and contrast the statements developed in
parts a and b. Which statement probably provides the better estimate of 2016
income? Explain why.
P4–18 Pro forma balance sheet Peabody & Peabody
has 2015 sales of $10 million. It wishes to analyze expected performance and
financing needs for 2017, which is 2 years ahead. Given the following
information, respond to parts a and b.
(1) The percents of sales for items that vary directly
with sales are as follows: Accounts receivable, 12% Inventory, 18% Accounts
payable, 14% Net profit margin, 3%
(2) Marketable securities and other current
liabilities are expected to remain unchanged.
(3) A minimum cash balance of $480,000 is desired.
(4) A new machine costing $650,000 will be acquired in
2016, and equipment costing $850,000 will be purchased in 2017. Total
depreciation in 2016 is forecast as $290,000, and in 2017 $390,000 of
depreciation will be taken.
(5) Accruals are expected to rise to $500,000 by the
end of 2017.
(6) No sale or retirement of long-term debt is
expected.
(7) No sale or repurchase of common stock is expected.
(8) The dividend payout of 50% of net profits is
expected to continue.
(9) Sales are expected to be $11 million in 2016 and
$12 million in 2017.
(10) The December 31, 2015, balance sheet follows.
a. Prepare a pro forma balance sheet dated December
31, 2017.
b. Discuss the financing changes suggested by the
statement prepared in part a.
FIN 350 Week 4 Module 4 Practice Problems
Complete the following problems from chapter 5 in the
textbook:
• P5-2
• P5-6
• P5-14
• P5-22
• P5-29
• P5-39
Follow these instructions for completing and
submitting your assignment:
1. Do all work in Excel. Do not submit Word files or
*.pdf files.
2. Submit a single spreadsheet file for this
assignment. Do not submit multiple files.
3. Place each problem on a separate spreadsheet tab.
4. Label all inputs and outputs and highlight your
final answer.
5. Follow the directions in “Guidelines for Developing
Spreadsheets.”
You are not required to submit this assignment to
Turnitin.
FIN 350 Week 5 Module 5 Practice Problems
Complete the following problems from chapter 6 in the
textbook:
• P6-5
• P6-11
• P6-17
• P6-18
• P6-22
Follow these instructions for completing and
submitting your assignment:
1. Do all work in Excel. Do not submit Word files or
*.pdf files.
2. Submit a single spreadsheet file for this
assignment. Do not submit multiple files.
3. Place each problem on a separate spreadsheet tab.
4. Label all inputs and outputs and highlight your
final answer.
5. Follow the directions in “Guidelines for Developing
Spreadsheets.”
You are not required to submit this assignment to
Turnitin.
FIN 350 Week 6 Module 6 Practice Problems
Complete the following problems from chapter 7 in the
textbook:
• P7-2
• P7-8
• P7-10
• P7-14
• P7-17
• P7-19
Follow these instructions for completing and
submitting your assignment:
1. Do all work in Excel. Do not submit Word files or
*.pdf files.
2. Submit a single spreadsheet file for this
assignment. Do not submit multiple files.
3. Place each problem on a separate spreadsheet tab.
4. Label all inputs and outputs and highlight your
final answer.
5. Follow the directions in “Guidelines for Developing
Spreadsheets.”
You are not required to submit this assignment to
Turnitin.
FIN 350 Week 7 Module 7 Practice Problems
Follow these instructions for completing and
submitting your assignment:
1. Do all work in Excel. Do not submit Word files or
*.pdf files.
2. Submit a single spreadsheet file for this
assignment. Do not submit multiple files.
3. Place each problem on a separate spreadsheet tab.
4. Label all inputs and outputs and highlight your
final answer.
5. Follow the directions in the “Guidelines for
Developing Spreadsheets.”
P8–9 Rate of return, standard deviation, and
coefficient of variation Mike is searching
for a stock to include in his current stock portfolio.
He is interested in Hi-Tech,
Inc.; he has been impressed with the company’s
computer products and believes
that Hi-Tech is an innovative market player. However,
Mike realizes that any
time you consider a technology stock, risk is a major
concern. The rule he follows
is to include only securities with a coefficient of
variation of returns below 0.90.
Mike has obtained the following price information for
the period 2012 through
2015. Hi-Tech stock, being growth-oriented, did not
pay any dividends during these
4 years.
Stock price
Year Beginning End
2012 $14.36 $21.55
2013 21.55 64.78
2014 64.78 72.38
2015 72.38 91.80
a. Calculate the rate of return for each year, 2012
through 2015, for Hi-Tech stock.
b. Assume that each year’s return is equally probable,
and calculate the average return
over this time period.
c. Calculate the standard deviation of returns over
the past 4 years. (Hint: Treat
these data as a sample.)
d. Based on b and c, determine the coefficient of
variation of returns for the security.
e. Given the calculation in d, what should be Mike’s
decision regarding the inclusion
of Hi-Tech stock in his portfolio?
P8–14 Portfolio analysis You have been given the
expected return data shown in the first
table on three assets—F, G, and H—over the period
2016–2019.
Expected return
Year Asset F Asset G Asset H
2016 16% 17% 14%
2017 17 16 15
2018 18 15 16
2019 19 14 17
Alternative Investment
1 100% of asset F
2 50% of asset F and 50% of asset G
3 50% of asset F and 50% of asset H
Asset
Expected
return, r
Risk (standard
deviation), sr
V 8% 5%
W 13 10
Using these assets, you have isolated the three
investment alternatives shown in the
following table.
a. Calculate the expected return over the 4-year
period for each of the three
alternatives.
b. Calculate the standard deviation of returns over
the 4-year period for each of the
three alternatives.
c. Use your findings in parts a and b to calculate the
coefficient of variation for
each of the three alternatives.
d. On the basis of your findings, which of the three
investment alternatives do you
recommend? Why?
P8–27 Portfolio return and beta Jamie Peters invested
$100,000 to set up the following
portfolio 1 year ago.
Asset Cost Beta at purchase Yearly income Value today
A $20,000 0.80 $1,600 $20,000
B 35,000 0.95 1,400 36,000
C 30,000 1.50 — 34,500
D 15,000 1.25 375 16,500
a. Calculate the portfolio beta on the basis of the
original cost figures.
b. Calculate the percentage return of each asset in
the portfolio for the year.
c. Calculate the percentage return of the portfolio on
the basis of original cost,
using income and gains during the year.
d. At the time Jamie made his investments, investors
were estimating that the market
return for the coming year would be 10%. The estimate
of the risk-free rate of return
averaged 4% for the coming year. Calculate an expected
rate of return for each stock
on the basis of its beta and the expectations of
market and risk-free returns.
e. On the basis of the actual results, explain how
each stock in the portfolio performed
relative to those CAPM-generated expectations of
performance. What
factors could explain these differences?
P9–5 The cost of debt Gronseth Drywall Systems, Inc.,
is in discussions with its investment
bankers regarding the issuance of new bonds. The
investment banker has informed
the firm that different maturities will carry
different coupon rates and sell at
different prices. The firm must choose among several
alternatives. In each case, the
bonds will have a $1,000 par value and flotation costs
will be $30 per bond. The
company is taxed at a rate of 40%. Calculate the
after-tax cost of financing with
each of the following alternatives.
Alternative
Coupon
rate
Time to
maturity (years)
Premium
or discount
A 9% 16 $250
B 7 5 50
C 6 7 par
D 5 10 2 75
P9–7 Cost of preferred stock Taylor Systems has just
issued preferred stock. The stock
has a 12% annual dividend and a $100 par value and was
sold at $97.50 per share.
In addition, flotation costs of $2.50 per share must
be paid.
a. Calculate the cost of the preferred stock.
b. If the firm sells the preferred stock with a 10%
annual dividend and nets $90.00
after flotation costs, what is its cost?
P9–9 Cost of common stock equity: CAPM J&M
Corporation common stock has a beta,
b, of 1.2. The risk-free rate is 6%, and the market
return is 11%.
a. Determine the risk premium on J&M common stock.
b. Determine the required return that J&M common
stock should provide.
c. Determine J&M’s cost of common stock equity
using the CAPM.
P9–10 Cost of common stock equity Ross Textiles wishes
to measure its cost of common
stock equity. The firm’s stock is currently selling
for $57.50. The firm expects to pay
a $3.40 dividend at the end of the year (2016). The
dividends for the past 5 years
are shown in the following table.
Year Dividend
2015 $3.10
2014 2.92
2013 2.60
2012 2.30
2011 2.12
After underpricing and flotation costs, the firm
expects to net $52 per share on a
new issue.
a. Determine the growth rate of dividends from 2011 to
2015.
b. Determine the net proceeds, Nn, that the firm will
actually receive.
c. Using the constant-growth valuation model,
determine the cost of retained earnings, rr.
d. Using the constant-growth valuation model,
determine the cost of new common
stock, rn.
P9–17 Calculation of individual costs and WACC Dillon
Labs has asked its financial manager
to measure the cost of each specific type of capital
as well as the weighted average
cost of capital. The weighted average cost is to be
measured by using the following
weights: 40% long-term debt, 10% preferred stock, and
50% common stock equity
(retained earnings, new common stock, or both). The
firm’s tax rate is 40%.
Debt The firm can sell for $980 a 10-year,
$1,000-par-value bond paying annual
interest at a 10% coupon rate. A flotation cost of 3%
of the par value is required
in addition to the discount of $20 per bond.
Preferred stock Eight percent (annual dividend)
preferred stock having a par
value of $100 can be sold for $65. An additional fee
of $2 per share must be paid
to the underwriters.
Common stock The firm’s common stock is currently
selling for $50 per share.
The dividend expected to be paid at the end of the
coming year (2016) is $4. Its
dividend payments, which have been approximately 60%
of earnings per share in
each of the past 5 years, were as shown in the
following table.
Year Dividend
2015 $3.75
2014 3.50
2013 3.30
2012 3.15
2011 2.85
It is expected that to attract buyers, new common
stock must be underpriced
$5 per share, and the firm must also pay $3 per share
in flotation costs. Dividend
payments are expected to continue at 60% of earnings.
(Assume that rr = rs.)
a. Calculate the after-tax cost of debt.
b. Calculate the cost of preferred stock.
c. Calculate the cost of common stock.
d. Calculate the WACC for Dillon Labs.
FIN 350 Week 8 Module 8 Practice Problems
Complete the following problems from chapter 10 in the
textbook:
P10-4
P10-10
P10-11
P10-15
P10-21
P10-24
Follow these instructions for completing and
submitting your assignment:
Do all work in Excel. Do not submit Word files or
*.pdf files.
Submit a single spreadsheet file for this assignment,
do not submit multiple files.
Place each problem on a separate spreadsheet tab.
Label all inputs and outputs and highlight your final
answer.
Follow the directions in the “Guidelines for
Developing Spreadsheets” located in the Course Materials.
FIN 350 Module 1 Discussion 1
Identify a party (other than stockholders) that can be
classified as a stakeholder for a corporation. What obligation does the
corporation have to this party? Describe a situation where stockholder claims
on the organization might conflict with the claims of this stakeholder group.
If you were CEO, how would you resolve these conflicts?
Identify a party (other than stockholders) that can be
classified as a stakeholder for a corporation.
FIN 350 Module 1 Discussion 2
During the summer and fall of 2008, the U.S. financial
system and financial systems around the world appeared to be on the verge of
collapse. How did we get into this condition? What did we do to get out of it?
How can we prevent another such scenario in the future?
FIN 350 Module 2 Discussion 1
Individuals performing ratio analysis include (1) banks
evaluating potential loan applications from small businesses, (2) investment
analysts evaluating the investment quality of a firm’s stock, and (3) internal
management, assessing the firm’s current strengths and weaknesses. Select one
of the three parties above, and for that party, identify which of the five
ratio groups (liquidity, activity, debt, profitability, or market) would be of
most value and which would probably be of least value. Explain the reasons
behind your choices.
FIN 350 Module 2 Discussion 2
Who are the major policy makers for the Federal
Reserve System and how do they rise to such an influential position? How do
these policymakers influence national economic objectives? Refer to Figure 5.1
on page 100 of the textbook. What part of this relationship could be influenced
by the citizens of the country? Why?
FIN 350 Module 3 Discussion 1
Is it possible for a firm to have a positive profit
and yet have a negative cash flow? Describe a scenario under which this might
occur? Where does the money from profits go in such a case?
FIN 350 Module 3 Discussion 2
If you were to examine the cash budgets of almost any
organization, you would find distinct seasonal patterns of cash inflows and
outflows. These patterns cause months during the year when almost every
business is flush with cash, and other months in which things are extremely
tight. Select an organization in which you are (were) employed, and describe
the seasons of the year when this firm was flush with cash and the seasons when
this firm was typically on a tight budget. Why did these times occur?
FIN 350 Module 4 Discussion 1
One of the basic financial principles is that the
value of any asset (whether it be a stock, a bond, or a firm as a whole) is the
present value of that asset’s future cash flows. As you learned in this
chapter, finding present values requires determining a discount rate. Assume
you want to buy a business, and you want to find the present value of its
future cash flows. Name at least one variable you should consider in determining
the correct discount rate to use and explain its role in discount rate
determination. If possible, try to identify a variable that has not yet been
mentioned by your classmates.
FIN 350 Module 4 Discussion 2
Look at the Focus on Ethics box (“How Fair Is Check
Into Cash”) in Chapter 5 of the textbook. These, businesses quote an interest
rate of 15% to loan customers (most of whom are fairly unsophisticated) and yet
the EAR of the loan is close to 400%. Explain the wide discrepancy between
these rates. What do you believe is the correct regulatory response to these
types of lenders?
FIN 350 Module 5 Discussion 1
There is an inverse relationship between interest rate
changes and changes in the market price of outstanding bonds. Explain the logic
behind this principle. Given this relationship, do you believe it is currently
a good time to buy bonds? Why or why not?
FIN 350 Module 5 Discussion 2
Agencies such as Moody’s, Fitch, and Standard &
Poor’s rate the default risk of various municipal and corporate bonds. While
their rating systems are proprietary, it is widely known that they rely on
financial ratios as key inputs to their bond ratings. Which financial ratios
(list at least two) do you believe would be the most helpful to rate corporate
bonds? Why?
FIN 350 Module 6 Discussion 1
Several stock valuation models were described in the
chapter, including zero-growth, constant growth, variable growth, free cash
flow, book value, and P/E multiple models. Which of these do you believe would
generate the most accurate value estimates for most firms? Explain your choice.
FIN 350 Module 6 Discussion 2
Read the Focus on Ethics box (“Psst! Have You Heard
Any Good Quarterly Earnings Forecasts Lately?”). Explain what quarterly
earnings guidance is, and what purpose it is supposed to serve. If you were a
corporate CEO, would you discontinue this practice? Why or why not?
FIN 350 Module 7 Discussion 1
Diversification occurs when stocks with low
correlations of returns are placed together in a portfolio. Identify at least
one type of firm that might exhibit low correlations of returns with the
overall stock market? Explain why the correlations of these firms are expected
to be low.
FIN 350 Module 7 Discussion 2
In general, the cost of debt capital is lower than the
cost of equity capital. For this reason, it might be expected that firms with
high debt ratios would have a lower weighted average cost of capital. Explain
at least one reason why this is not the case.
FIN 350 Module 8 Discussion 1
Which capital investment technique does the discussion
in the textbook favor? Why? Do you agree with this assessment?
FIN 350 Module 8 Discussion 2
Assume your firm has multiple investments to consider
each with differing risk levels. How can differing risk levels be incorporated
into NPV analysis? How can they be incorporated into IRR analysis?
Comments
Post a Comment