Finance Help
coulxns4jzANSWERS MUST BE IN THE EXCEL SHEET ATTACHED TO THIS ASSIGNMENT. FOR QUESTIONS 7 -10 1 PARAGRAPH PER ANSWER IS FINE,
1. Using the Excel financial functions calculate the missing amounts in the yellow cells | ||||||||
| PV | NPER | RATE | PMT | FV | ||||
| $1,000 | 10 | 6% | 50 | |||||
| 20 | 8% | 100 | $5,000 | |||||
| $905 | 7 | 0 | $1,718 | |||||
| $1,941 | 7% | 50 | $3,700 | |||||
| $2,500 | 5 | 6% | $6,500 | |||||
| Give a real-life example of how each of the five calculations can be used in real life situations | ||||||||
| PV | ||||||||
| NPER | ||||||||
| RATE | ||||||||
| PMT | ||||||||
| FV | ||||||||
| 2. Newco issued 20 year bonds 12 years ago at a coupon rate of8% payable semiannually. If the bonds currently sell for 110% of par value, what is their YTM? | ||||||||
| Answer: | ||||||||
| 3. Newco is paying a dividend of $1.00 per year on their stock and is expected to continue to pay this amount annually for 10 years. If investors require a 12% return on this stock, what is its price? | ||||||||
| Answer: | ||||||||
| 4. Calculate the Payback period, NPV and IRR of the following investment: | ||||||||
| Year | Cash Flow | |||||||
| 0 | ($415,000) | |||||||
| 1 | 49000 | |||||||
| 2 | 75000 | |||||||
| 3 | 76000 | |||||||
| 4 | 520000 | |||||||
| Payback period | ||||||||
| NPV | ||||||||
| IRR | ||||||||
| Give a real-life example of how each of the three calculations can be used in real life situations | ||||||||
| Payback | ||||||||
| NPV | ||||||||
| IRR | ||||||||
| 5. A firm has debt of $6,000 and is paying 8% interest; Preferred stock of $2,000 and is paying 6% and has a cost of equity of 18%. Calculate its WACC. | ||||||||
| Answer: | ||||||||
| 6. Calculate the Operating and Cash Cycles. | ||||||||
| Item | Beginning | Ending | ||||||
| Inventory | $10,000 | $11,000 | ||||||
| Accounts Receivable | $5,000 | $6,000 | ||||||
| Accounts Payable | $6,000 | $65,000 | ||||||
| Net Sales | $140,000 | |||||||
| Cost of Goods Sold | $85,000 | |||||||
| Operating Cycle | Days | |||||||
| Cash Cycle | Days | |||||||
| What does Operating and Cash Cycles tell you? Why are they important? | ||||||||
| 7 | What are the three types of financial management decisions? For each type of decision give an example of a typical business transaction. | |||||||
| 8 | Explain any two of the following a. Liquidity b. Market versus Book Value c. Average versus Marginal Tax Rate d. The Cash Flow Statement | |||||||
| 9 | Imagine you are a bank and ABC is asking you to for a loan to purchase the inventory they need for their expected sales Christmas Sales. What financial ratios (give at least two) would you use to make your decision? Explain why you chose each ratio. Assuming their ratios were good, would you loan them the full amount they need? Why? | |||||||
| 10 | What is Beta? Why is It important | |||||||
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