| Chapter 11 | FINANCIAL ANALYSIS ALGORITHMS |
| Problem 4 | A Collection of Microsoft Excel Spreadsheets To Accompany Melicher & Norton's |
| | INTRODUCTION TO FINANCE, Markets, Investments, and Financial Management, 16e |
| Profit/Loss on Stock Investment. |
| Assume no margin, borrowing costs, dividends, commissions or taxes. |
| a. |
| Input Variables: |
| 1000 | Number of shares purchased |
| $20.00 | Purchase price per share |
| $23.00 | Selling price per share |
| 50% | Margin percent |
| Output Variables: |
| $10,000.00 | Amount borrowed |
| $10,000.00 | Initial equity investment = purchase price for all shares - amount borrowed |
| $13,000.00 | Terminal equity investment value = selling price for all shares - amount borrowed |
| $3,000.00 | Dollar profit/loss |
| 30.000% | Return on equity investment |
| b. |
| Input Variables: |
| 1000 | Number of shares purchased |
| $20.00 | Purchase price per share |
| $30.00 | Selling price per share |
| 50% | Margin percent |
| Output Variables: |
| $10,000.00 | Amount borrowed |
| $10,000.00 | Initial equity investment = purchase price for all shares - amount borrowed |
| $20,000.00 | Terminal equity investment value = selling price for all shares - amount borrowed |
| $10,000.00 | Dollar profit/loss |
| 100.000% | Return on equity investment |
| c. |
| Input Variables: |
| 1000 | Number of shares purchased |
| $20.00 | Purchase price per share |
| $16.00 | Selling price per share |
| 50% | Margin percent |
| Output Variables: |
| $10,000.00 | Amount borrowed |
| $10,000.00 | Initial equity investment = purchase price for all shares - amount borrowed |
| $6,000.00 | Terminal equity investment value = selling price for all shares - amount borrowed |
| ($4,000.00) | Dollar profit/loss |
| -40.000% | Return on equity investment |
| d. |
| Input Variables: |
| 1000 | Number of shares purchased |
| $20.00 | Purchase price per share |
| $10.00 | Selling price per share |
| 50% | Margin percent |
| Output Variables: |
| $10,000.00 | Amount borrowed |
| $10,000.00 | Initial equity investment = purchase price for all shares - amount borrowed |
| $0.00 | Terminal equity investment value = selling price for all shares - amount borrowed |
| ($10,000.00) | Dollar profit/loss |
| -100.000% | Return on equity investment |