Tutorial

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4–5 Multiyear Future Value How much would be in your savings account in 11 years after depositing $150 today if the bank pays 8 percent per year? (LG4–3) 4–7 Compounding with Different Interest Rates A deposit of $350 earns the following interest rates: a. 8 percent in the first year. b. 6 percent in the second year. c. 5.5 percent in the third year. What would be the third year future value? 4–8 Compounding with Different Interest Rates A deposit of $750 earns interest rates of 9 percent in the first year and 12 percent in the second year. What would be the second year future value? (LG4–3) 4–11 Present Value What is the present value of a $1,500 payment made in nine years when the discount rate is 8 percent? (LG4–4) 4–13 Present Value with Different Discount Rates Compute the present value of $1,000 paid in three years using the following discount rates: 6 percent in the first year, 7 percent in the second year, and 8 percent in the third year. (LG4–4)

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FIN 370 Final Exam Guide (New)

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Which financial statement reports the amounts of cash that the firm generated and distributed during a particular time period? statement of retained earnings Income statement Statement of cash flows Balance sheet Which of these provide a forum in which demanders of funds raise funds by issuing new financial instruments, such as stocks and bonds? Money markets Investment banks Primary markets Secondary markets The top part of Mars, Inc.’s 2013 balance sheet is listed as follows (in millions of dollars). What are Mars, Inc.’s current ratio, quick ratio, and cash ratio for 2013? 4.2, 1.0, 0.2 2.3333, 0.5556, 0.1111 10.5, 6.0, 1.0 0.1111, 0.5556, 0.2 Which of these ratios show the combined effects of liquidity, asset management, and debt management on the overall operation results of the firm? Financial Profitability Coverage Liquidity As new capital budgeting projects arise, we must estimate__________. the cost of the stock being sold for the specific project when such projects will require cash flows the cost of the loan for the specific project the float costs for financing the project What’s the current yield of a 6 percent coupon corporate bond quoted at a price of 101.70? 6.1 percent 10.2 percent 6.0 percent 5.9 percent We call the process of earning interest on both the original deposit and on the earlier interest payments: computing. multiplying. compounding. discounting. Which financial statement reports a firm’s assets, liabilities, and equity at a particular point in time? Balance sheet Income statement Statement of retained earnings Statement of cash flows You are trying to pick the least-expensive machine for your company. You have two choices: machine A, which will cost $50,000 to purchase and which will have OCF of -$3,500 annually throughout the machine’s expected life of three years; and machine B, which will cost $75,000 to purchase and which will have OCF of -$4,900 annually throughout that machine’s four-year life. Both machines will be worthless at the end of their life. If you intend to replace whichever type of machine you choose with the same thing when its life runs out, again and again out into the foreseeable future, and if your business has a cost of capital of 14 percent, which one should you choose? Machine A Machine B Neither machine A nor B Both machines A and B When firms use multiple sources of capital, they need to calculate the appropriate discount rate for valuing their firm’s cash flows as__________.

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FIN 370 Week 1 Calculating Ratios Worksheet (2 Set)

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This Tutorial contains 2 Set of Answers FIN 370 Week 1 Calculating Ratios Worksheet 1. What is “agency theory?” How can setting the appropriate goals for the firm minimize the agency problem? 2. Differentiate between profit maximization and wealth maximization. 3. Why must organizations focus on both shareholder wealth and the stakeholders? 4. Differentiate between the three financial statements with which managers should be familiar. How are they linked?

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FIN 370 Week 1 Calculating RatiosLake of Egypt Marina (3–29, 3–30)

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FIN 370 Week 1 Calculating Ratios Review the financial statements for Lake of Egypt Marina, Inc. Complete the following problem sets from Chapter 3 in Microsoft® Excel®: • 3–29 Spreading the Financial Statements • 3–30 Calculating Ratios Format your assignment consistent with APA guidelines. Click the Assignment Files tab to submit your assignment

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FIN 370 Week 2 Cash Flow Problem Sets (5–1,5–3,5–5,5–7,5–12,5–15,5–39)

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FIN 370 Week 2 Cash Flow Problem Sets Complete the following problem sets from Chapter 5 in Microsoft® Excel®: • 5–1 • 5–3 • 5–5 • 5–7 • 5–12 • 5–15 • 5–39 (Calculate monthly payment only) 5–1FutureValue Compute the future value in year 9 of a $2,000 deposit in year 1 and another $1,500 deposit at the end of year 3 using a 10 percent interest rate. 5–3 Future Value of an Annuity What is the future value of a $900 annuity payment over five years if interest rates are 8 percent? 5–5 Present Value Compute the present value of a $2,000 deposit in year 1 and another $1,500 deposit at the end of year 3 if interest rates are 10 percent. 5–7 Present Value of an Annuity What’s the present value of a $900 annuity payment over five years if interest rates are 8 percent? 5–12 Present Value of an Annuity Due If the present value of an ordinary, 6-year annuity is $8,500 and interest rates are 9.5 percent, what’s the present value of the same annuity due? 5–15Effective Annual Rate A loan is offered with monthly payments and a 10 percent APR. What’s the loan’s effective annual rate (EAR)? 5–39 Loan Payments You wish to buy a $25,000 car. The dealer offers you a 4-year loan with a 9 percent APR. What are the monthly payments? How would the payment differ if you paid interest only? What would the consequences of such a decision be?

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FIN 370 Week 2 Financial Markets and Institutions Report (2 Papers)

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This Tutorial contains 2 Papers FIN 370 Week 2 Financial Markets and Institutions Report Create a 1,050-word report, and include the following: • Describe the role of the financial institutions and financial markets in our economy • Differentiate between primary and secondary markets. • Differentiate between money and capital markets. Format your assignment consistent with APA guidelines.

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FIN 370 Week 3 Individual AssingmentRisk and Return Analysis Report (2 Papers)

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This tutorial contains 2 Papers FIN 370 Week 3 Risk and Return Analysis Create a 1,050-word report, and include the following: • Explain the relationship between risk and return • Identify an example of risk and return. • Explain which is more risky bonds or common stocks. • Explain how understanding risk and return will help you in future business ventures. Format your assignment consistent with APA guidelines. Click the Assignment Files tab to submit your assignment.

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FIN 370 Week 3 Risk and Return Problem Sets (7–21,7–27,8–19,8–21,9–33)

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FIN 370 Week 3 Risk and Return Problem Sets Complete the following problem sets from Chapter 7 in Microsoft® Excel®: • 7–21 • 7–27 Complete the following problem sets from Chapter 8 in Microsoft® Excel®: • 8–19 • 8–21 Complete the following problem sets from Chapter 9 in Microsoft® Excel®: • 9–33 Click the Assignment Files tab to submit your assignment. Complete the following problem sets from Chapter 7 in Microsoft® Excel®: • 7–21 Compute Bond Price Compute the price of a 3.8 percent coupon bond with 15 years left to maturity and a market interest rate of 6.8 percent. (Assume interest payments are semiannual.) Is this a discount or premium bond? • 7–27 Yield to Maturity A 5.65 percent coupon bond with 18 years left to maturity is offered for sale at $1,035.25. What yield to maturity is the bond offering? (Assume interest payments are semiannual.) Complete the following problem sets from Chapter 8 in Microsoft® Excel®: • 8–19 Value a Constant Growth Stock Financial analysts forecast Safeco Corp.’s (SAF) growth rate for the future to be 8 percent. Safeco’s recent dividend was $0.88. What is the value of Safeco stock when the required return is 12 percent? • 8–21 Expected Return Ecolap Inc. (ECL) recently paid a $0.46 dividend. The dividend is expected to grow at a 14.5 percent rate. At a current stock price of $44.12, what is the return shareholders are expecting? Complete the following problem sets from Chapter 9 in Microsoft® Excel®: • 9–33 Risk, Return, and Their Relationship Consider the following annual returns of Estee Lauder and Lowe’s Companies (Table Attached)

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FIN 370 Week 3 Team Assignment Precision Machines Part 1 (annotated bibliography and excel calculation)

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This Tutorial contains both annonated bibliography and excel file FIN 370 Week 3 Team Assignment Precision Machines Part 1 Precision Machines is preparing a financial plan for the next six months to determine the financial needs of the company. The historical analysis of the company’s sales shows that the company’s total sales are 30% cash sales and 70% credit sales. Further analysis of credit sales shows that the company receives 50% of the credit sales one month after the sale and the remaining 50% in the second month after the sale. This means the cash collections from sales are 30% in the first month of the sale, 35% in the second month, and 35% in the third month. The materials purchased by the company amounts to 50% of the sales for the month. The company pays for the purchases one month after the initial purchase. The company likes to maintain a cash balance of $5,000. The cost of borrowing is 10%. The company plans to pay off the loan whenever there is a surplus and borrow when there is a deficit. The attached spreadsheet shows revenues (sales), expenses, capital expenditures, and other expenses for Precision Machines’ next six months. Using the information given on the spreadsheet, prepare a cash budget for January through June and determine the cash surplus, deficit, and the financing needs of the company. Note: There are two parts to this learning team assignment; Part 2 will be completed in Week 5. Review the Learning Team Assignment due in Week 5. Create an outline for the essay. Develop a 700-word annotated bibliography using at least 3 resources. Format your paper consistent with APA guidelines. Click the Assignment Files tab to submit your assignment.

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FIN 370 Week 4 Cash Flow AnalysisFrank Smith Plumbing (calculation and 2 Papers)

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This tutorial includes both calculation and 2 Papers FIN 370 Week 4 Cash Flow Analysis Analyze the case study, “Frank Smith Plumbing.” Analyze the “Frank Smith Plumbing’s Financial Statement” spreadsheet. Compare the cost of the truck to the cash flow records Compile your calculations in a Microsoft® Excel® document Develop a 1,050-word analysis and include the following: • Explain why limited leverage is good for business.Show the profitability of the project so that Stephanie can convince her father to purchase the truck by borrowing money. • Explain how Stephanie should convince her mother that it is inappropriate to call the bank manager and his wife for assistance in getting the loan approval? • Analyze whether the investment in the truck is profitable. • Explain whether it is more beneficial for Frank to close his business. • Explain what you would do in this same situation. Format your assignment consistent with APA guidelines. Click the Assignment Files tab to submit your assignments.

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FIN 370 Week 5 Team Assignment Precision Machines Part 2 (Cash Budget and Strategic Analysis)

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FIN 370 Week 5 Precision Machines Part 2 Note: There are two parts to this learning team assignment; Part 1 was completed in Week 3. Review the “Precision Machines” document and spreadsheet. Prepare a cash budget for Precision Machines in Microsoft® Excel®. Create a 1,225-word strategic analysis and include the following: • Recommend a cash management strategy for the company that will minimize the financing cost and increase the cash flows for the company. • Explain two economic and market forces that will impact the financial plan of this company. Format your documents consistent with APA guidelines. Click the Assignment Files tab to submit your assignment. • Review the “Precision Machines” document and spreadsheet. • Prepare a cash budget for Precision Machines in Microsoft® Excel®. • Precision Machines

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