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Words 719

Pages 3

Chapter 7 (pages 225–228):

1. Your brother wants to borrow $10,000 from you. He has offered to pay you back $12,000 in a year. If the cost of capital of this investment opportunity is 10%, what is its NPV? Should you undertake the investment opportunity? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged.

2. You are considering an investment in a clothes distributor. The company needs $100,000 today and expects to repay you $120,000 in a year from now. What is the IRR of this investment opportunity? Given the riskiness of the investment opportunity, your cost of capital is 20%. What does the IRR rule say about whether you should invest?

3. You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5,000 and will be posted for one year. You expect that it will generate additional revenue of $500 per month. What is the payback period?

4. You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $10 million. Investment A will generate $2 million per year (starting at the end of the first year) in perpetuity. Investment B will generate $1.5 million at the end of the first year and its revenues will grow at 2% per year for every year after that.

a. Which investment has the higher IRR?

b. Which investment has the higher NPV when the cost of capital is 7%?

c. In this case, for what values of the cost of capital does picking the higher IRR give the correct answer as to which investment is the best opportunity?

Chapter 8 (260–262)

1. Pisa Pizza, a seller of frozen pizza, is considering introducing a healthier version of its pizza…...

...DeVry FIN 515 Week 3 Problem Set – Latest IF You Want To Purchase A+ Work Then Click The Link Below , Instant Download http://www.hwspeed.com/DeVry-FIN-515-Week-3-Problem-Set-Latest-47333833.htm?categoryId=-1 If You Face Any Problem E- Mail Us At JOHNMATE1122@Gmail.Com Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_3_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 7 (pages 225–228): 1. Your brother wants to borrow $10,000 from you. He has offered to pay you back $12,000 in a year. If the cost of capital of this investment opportunity is 10%, what is its NPV? Should you undertake the investment opportunity? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. 8. You are considering an investment in a clothes distributor. The company needs $100,000 today and expects to repay you $120,000 in a year from now. What is the IRR of this investment opportunity? Given the riskiness of the investment opportunity, your cost of capital is 20%. What does the IRR rule say about whether you should invest? 19. You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5,000 and will be posted for one year. You expect that it will generate additional......

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...FIN 515 Managerial Finance Week 3 Problem Set To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-515-managerial-finance-week-3-problem-set/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 515 Managerial Finance Week 3 Problem Set Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_3_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 7 (pages 225–228): 1. Your brother wants to borrow $10,000 from you. He has offered to pay you back $12,000 in a year. If the cost of capital of this investment opportunity is 10%, what is its NPV? Should you undertake the investment opportunity? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. 8. You are considering an investment in a clothes distributor. The company needs $100,000 today and expects to repay you $120,000 in a year from now. What is the IRR of this investment opportunity? Given the riskiness of the investment opportunity, your cost of capital is 20%. What does the IRR rule say about whether you should invest? 19. You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5,000 and will be......

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...FIN 515 Week 1 Problem Set http://www.homeworkwarehouse.com/downloads/fin-515-week-1-problem-set/ FIN 515 Week 1 Problem Set Chapter 1 1. What is the most important difference between a corporation and all other organizational forms? 2. What does the phrase limited liability mean in a corporate context? 3. Which organizational forms give their owners limited liability? 4. What are the main advantages and disadvantages of organizing a firm as a corporation? 5. Explain the difference between an S corporation and a C corporation. Chapter 2 The following is provided for use in answering the next set of questions. You may also find table 2.5 on page 53 of your text and all questions on pages 56–57. In fiscal year 2011, Starbucks Corporation (SBUX) had revenue of $11.70 billion, gross profit of $6.75 billion, and net income of $1.25 billion. Peet’s Coffee and Tea (PEET) had revenue of $372 million, gross profit of $72.7 million, and net income of $17.8 million. a. Compare the gross margins for Starbucks and Peet’s. b. Compare the net profit margins for Starbucks and Peet’s. c. Which firm was more profitable in 2011? See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. How did Mydeco’s accounts receivable days change over this period? b. How did Mydeco’s inventory days change over this period? c. Based on your analysis, has Mydeco improved its management of its working capital during this time period? See Table 2.5 showing......

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...FIN 515 Week 3 Problem Set http://www.homeworkwarehouse.com/downloads/fin-515-week-3-problem-set/ FIN 515 Week 3 Problem Set Chapter 7 (pages 225–228): 1. Your brother wants to borrow $10,000 from you. He has offered to pay you back $12,000 in a year. If the cost of capital of this investment opportunity is 10%, what is its NPV? Should you undertake the investment opportunity? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. 2. You are considering an investment in a clothes distributor. The company needs $100,000 today and expects to repay you $120,000 in a year from now. What is the IRR of this investment opportunity? Given the riskiness of the investment opportunity, your cost of capital is 20%. What does the IRR rule say about whether you should invest? 3. You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5,000 and will be posted for one year. You expect that it will generate additional revenue of $500 per month. What is the payback period? 4. You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $10 million. Investment A will generate $2 million per year (starting at the end of the first year) in perpetuity. Investment B will generate $1.5 million at the end of the first year and its revenues will grow at 2% per year for every year after......

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...FIN 515 Week 7 Problem Set http://www.homeworkwarehouse.com/downloads/fin-515-week-7-problem-set/ FIN 515 Week 7 Problem Set 1. Answer the following questions: a. What is the difference between a firm’s cash cycle and its operating cycle? b. How will a firm’s cash cycle be affected if a firm increases its inventory, all else being equal? c. How will a firm’s cash cycle be affected if a firm begins to take the discounts offered by its suppliers, all else being equal? 4. The Greek Connection had sales of $32 million in 2012, and a cost of goods sold of $20 million. A simplified balance sheet for the firm appears below: a. Calculate The Greek Connection’s net working capital in 2012. b. Calculate the cash conversion cycle of The Greek Connection in 2012. c. The industry average accounts receivable days is 30 days. What would the cash conversion cycle for The Greek Connection have been in 2012 if it had matched the industry average for accounts receivable days? 5. Assume the credit terms offered to your firm by your suppliers are 3/5, Net 30. Calculate the cost of the trade credit if your firm does not take the discount and pays on day 30. 1. Which of the following companies are likely to have high short-term financing needs? Why? a. A clothing retailer b. A professional sports team c. An electric utility d. A company that operates toll roads e. A restaurant chain 2. Sailboats Etc. is a retail company specializing in sailboats and other sailing-related......

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...FIN 515 Week 3 Problem Set Managerial Finance http://hwguiders.com/downloads/fin-515-week-3-problem-set-managerial-finance FIN 515 Week 3 Problem Set Managerial Finance Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_3_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 7 (pages 225–228): 1. Your brother wants to borrow $10,000 from you. He has offered to pay you back $12,000 in a year. If the cost of capital of this investment opportunity is 10%, what is its NPV? Should you undertake the investment opportunity? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. 8. You are considering an investment in a clothes distributor. The company needs $100,000 today and expects to repay you $120,000 in a year from now. What is the IRR of this investment opportunity? Given the riskiness of the investment opportunity, your cost of capital is 20%. What does the IRR rule say about whether you should invest? 19. You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5,000 and will be posted for one year. You expect that it will generate additional revenue of $500 per month. What is the payback period? 21. You are deciding between two mutually......

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...FIN 515 Managerial Finance Week 3 Problem Set http://homeworkfy.com/downloads/fin-515-managerial-finance-week-3-problem-set/ To Get this Tutorial Copy & Paste above URL Into Your Browser Hit Us Email for Any Inquiry at: Homeworkfy@gmail.com Visit our Site for More Tutorials: (http://homeworkfy.com/ ) Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_3_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 7 (pages 225–228): 1. Your brother wants to borrow $10,000 from you. He has offered to pay you back $12,000 in a year. If the cost of capital of this investment opportunity is 10%, what is its NPV? Should you undertake the investment opportunity? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. 8. You are considering an investment in a clothes distributor. The company needs $100,000 today and expects to repay you $120,000 in a year from now. What is the IRR of this investment opportunity? Given the riskiness of the investment opportunity, your cost of capital is 20%. What does the IRR rule say about whether you should invest? 19. You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5,000 and will be posted for one year. You expect......

Words: 787 - Pages: 4

...FIN 515 Week 3 Problem Set Managerial Finance http://hwguiders.com/downloads/fin-515-week-3-problem-set-managerial-finance FIN 515 Week 3 Problem Set Managerial Finance Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_3_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 7 (pages 225–228): 1. Your brother wants to borrow $10,000 from you. He has offered to pay you back $12,000 in a year. If the cost of capital of this investment opportunity is 10%, what is its NPV? Should you undertake the investment opportunity? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. 8. You are considering an investment in a clothes distributor. The company needs $100,000 today and expects to repay you $120,000 in a year from now. What is the IRR of this investment opportunity? Given the riskiness of the investment opportunity, your cost of capital is 20%. What does the IRR rule say about whether you should invest? 19. You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5,000 and will be posted for one year. You expect that it will generate additional revenue of $500 per month. What is the payback period? 21. You are deciding between two mutually......

Words: 765 - Pages: 4

...FIN 515 Week 1 Problem Set http://www.homeworkwarehouse.com/downloads/fin-515-week-1-problem-set/ FIN 515 Week 1 Problem Set Chapter 1 1. What is the most important difference between a corporation and all other organizational forms? 2. What does the phrase limited liability mean in a corporate context? 3. Which organizational forms give their owners limited liability? 4. What are the main advantages and disadvantages of organizing a firm as a corporation? 5. Explain the difference between an S corporation and a C corporation. Chapter 2 The following is provided for use in answering the next set of questions. You may also find table 2.5 on page 53 of your text and all questions on pages 56–57. In fiscal year 2011, Starbucks Corporation (SBUX) had revenue of $11.70 billion, gross profit of $6.75 billion, and net income of $1.25 billion. Peet’s Coffee and Tea (PEET) had revenue of $372 million, gross profit of $72.7 million, and net income of $17.8 million. a. Compare the gross margins for Starbucks and Peet’s. b. Compare the net profit margins for Starbucks and Peet’s. c. Which firm was more profitable in 2011? See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. How did Mydeco’s accounts receivable days change over this period? b. How did Mydeco’s inventory days change over this period? c. Based on your analysis, has Mydeco improved its management of its working capital during this time period? See Table 2.5 showing......

Words: 427 - Pages: 2

...FIN 515 Week 7 Problem Set http://www.homeworkwarehouse.com/downloads/fin-515-week-7-problem-set/ FIN 515 Week 7 Problem Set 1. Answer the following questions: a. What is the difference between a firm’s cash cycle and its operating cycle? b. How will a firm’s cash cycle be affected if a firm increases its inventory, all else being equal? c. How will a firm’s cash cycle be affected if a firm begins to take the discounts offered by its suppliers, all else being equal? 4. The Greek Connection had sales of $32 million in 2012, and a cost of goods sold of $20 million. A simplified balance sheet for the firm appears below: a. Calculate The Greek Connection’s net working capital in 2012. b. Calculate the cash conversion cycle of The Greek Connection in 2012. c. The industry average accounts receivable days is 30 days. What would the cash conversion cycle for The Greek Connection have been in 2012 if it had matched the industry average for accounts receivable days? 5. Assume the credit terms offered to your firm by your suppliers are 3/5, Net 30. Calculate the cost of the trade credit if your firm does not take the discount and pays on day 30. 1. Which of the following companies are likely to have high short-term financing needs? Why? a. A clothing retailer b. A professional sports team c. An electric utility d. A company that operates toll roads e. A restaurant chain 2. Sailboats Etc. is a retail company specializing in sailboats and other sailing-related......

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...FIN 515 Managerial Finance Week 3 Problem Set To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-515-managerial-finance-week-3-problem-set/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 515 Managerial Finance Week 3 Problem Set Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_3_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 7 (pages 225–228): 1. Your brother wants to borrow $10,000 from you. He has offered to pay you back $12,000 in a year. If the cost of capital of this investment opportunity is 10%, what is its NPV? Should you undertake the investment opportunity? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. 8. You are considering an investment in a clothes distributor. The company needs $100,000 today and expects to repay you $120,000 in a year from now. What is the IRR of this investment opportunity? Given the riskiness of the investment opportunity, your cost of capital is 20%. What does the IRR rule say about whether you should invest? 19. You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5,000 and will be......

Words: 794 - Pages: 4

...FIN 515 Week 3 Problem Set Answers http://homeworklance.com/downloads/fin-515-week-3-problem-set-answers/ Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_3_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 7 (pages 225–228): 1. Your brother wants to borrow $10,000 from you. He has offered to pay you back $12,000 in a year. If the cost of capital of this investment opportunity is 10%, what is its NPV? Should you undertake the investment opportunity? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. 8. You are considering an investment in a clothes distributor. The company needs $100,000 today and expects to repay you $120,000 in a year from now. What is the IRR of this investment opportunity? Given the riskiness of the investment opportunity, your cost of capital is 20%. What does the IRR rule say about whether you should invest? 19. You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5,000 and will be posted for one year. You expect that it will generate additional revenue of $500 per month. What is the payback period? 21. You are deciding between two mutually exclusive investment opportunities. Both require the same initial......

Words: 755 - Pages: 4

...FIN 515 Week 3 Problem Set Answers http://homeworklance.com/downloads/fin-515-week-3-problem-set-answers/ Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_3_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 7 (pages 225–228): 1. Your brother wants to borrow $10,000 from you. He has offered to pay you back $12,000 in a year. If the cost of capital of this investment opportunity is 10%, what is its NPV? Should you undertake the investment opportunity? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. 8. You are considering an investment in a clothes distributor. The company needs $100,000 today and expects to repay you $120,000 in a year from now. What is the IRR of this investment opportunity? Given the riskiness of the investment opportunity, your cost of capital is 20%. What does the IRR rule say about whether you should invest? 19. You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5,000 and will be posted for one year. You expect that it will generate additional revenue of $500 per month. What is the payback period? 21. You are deciding between two mutually exclusive investment opportunities. Both require the same initial......

Words: 755 - Pages: 4

...FIN 515 Week 3 Problem Set To Buy This material Click below link http://www.uoptutors.com/fin-515-devry/fin-515-week-3-problem-set Chapter 7 (pages 225–228): 1. Your brother wants to borrow $10,000 from you. He has offered to pay you back $12,000 in a year. If the cost of capital of this investment opportunity is 10%, what is its NPV? Should you undertake the investment opportunity? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. 8. You are considering an investment in a clothes distributor. The company needs $100,000 today and expects to repay you $120,000 in a year from now. What is the IRR of this investment opportunity? Given the riskiness of the investment opportunity, your cost of capital is 20%. What does the IRR rule say about whether you should invest? 19. You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5,000 and will be posted for one year. You expect that it will generate additional revenue of $500 per month. What is the payback period? 21. You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $10 million. Investment A will generate $2 million per year (starting at the end of the first year) in perpetuity. Investment B will generate $1.5 million at the end of the first year and its revenues will grow at 2% per year for every year......

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...FIN 515 Week 4 Problem Set To Buy This material Click below link http://www.uoptutors.com/fin-515-devry/fin-515-week-4-problem-set Bonds-1. Interest on a certain issue of bonds is paid annually with a coupon rate of 8%. The bonds have a par value of $1,000. The yield to maturity is 9%. What is the current market piece of these bonds? The bonds will mature in 5 years. Bonds-2. A certain bond has 12 years left to maturity. Interest is paid annually at a coupon rate of 10%. The bonds are currently selling for $850. What is their YTM? Bonds-3. A certain bond pays a semiannual coupon rate at a 10% annual rate. The bond has a par value of $1,000. There are eight years to maturity. The yield to maturity is 9%. What is the current price of the bond? Bonds-4. A particular corporate bond has a par value of $1,000. Coupon payments are $40 and are paid twice a year. Seven years are left on the life of the bond.The YTM is 9%. What is the price of the bond? Bond-5. A given bond has 5 years to maturity. It has a face value of $1,000. It has a YTM of 5% and the coupons are paid semiannually at a 10% annual rate. What does the bond currently sell for? Bond-6. A given bond has five years left to maturity. Interest is paid annually and the annual coupon rate is 9%. The par value of the bond is $1,000. The bond currently sells for $1,000. What is the yield to maturity? 9-1.Assume Evco, Inc., has a current price of $50 and will pay a $2 dividend in 1 year, and its equity cost of capital...

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