[tultul]

1. Interpret, in words, what cash flow from assets represents by discussing operating cash flow, changes
in net working capital, and additions to fixed assets.



2. How can you determine if a firm is self-sustaining by reviewing the firm's cash flow from assets?



3. Discuss the difference between book values and market values on the balance sheet and explain
which is more important to the financial manager and why.



4. Explain the difference between an annual percentage rate and an effective annual rate.



5. Your credit card company quotes you a rate of 18.9 percent. Interest is billed monthly. What is the
actual rate of interest you are paying?




6. Mrs. Black established a trust fund that provides $65,000 in scholarships each year for needy
students. The trust fund earns a fixed 5.5 percent rate of return. How much money did Mrs. Black
contribute to the fund assuming that only the interest income is distributed?




7. Stevenson Interiors of Kingston has a $67,500 liability they must pay four years from today. The
company is opening a savings account so that the entire amount will be available when this debt needs
to be paid. The plan is to make an initial deposit today and then deposit an additional $10,000 a year for
the next four years, starting one year from today. The account pays a 5 percent rate of return. How
much does the firm need to deposit today?


8. Ottawa Manor would like to buy some additional land and build a new assisted living center. The
anticipated total cost is $12.4 million. The CEO of the firm is quite conservative and will only do this
when the company has sufficient funds to pay cash for the entire construction project. Management has
decided to save $235,000 a month for this purpose. The firm earns 7 percent compounded monthly on
the funds it saves. How long does the company have to wait before expanding its operations?


9. Your employer contributes $50 a week to your retirement plan. Assume that you work for your
employer for another 12 years and that the applicable discount rate is 8 percent. Given these
assumptions, what is this employee benefit worth to you today?


10. Present value is used extensively by managers who are reviewing proposed projects. Why is this so
and how does the present value of a cash flow assist management in making these business decisions?





11. Some financial advisors recommend you increase the amount of federal income taxes withheld from
your paycheque each month so that you will get a larger refund come April. That is, you take home less
today but get a bigger lump sum when you get your refund. Based on your knowledge of the time value
of money, what do you think of this idea? Explain.



12. You are considering two lottery payment streams. Choice A pays $1,000 today and choice B pays
$1,750 at the end of five years from now. Using a discount rate of 5%, based on present values, which
would you choose? Using the same discount rate of 5%, based on future values, which would you
choose? What do your results suggest as a general rule for approaching such problems? (Make your
choices based purely on the time value of money.)

13. Patti's Pizza has net income of $218,490, a price-earnings ratio of 14.6, and earnings per share of
$1.32. How many shares of stock are outstanding?


14. Monika's Gift Barn has cash of $316, accounts receivable of $687, accounts payable of $709, and
inventory of $2,108. What is the value of the quick ratio?


15. What should be the goal of the financial manager of a corporation? Why?

16. Do you think agency problems arise in sole proprietorships and/or partnerships?

17. List and briefly describe the three basic questions addressed by a financial manager.

18. What should be the goal of the financial manager of a corporation? Why?

19. You need some money today and the only friend you have that has any is your miserly friend. He
agrees to loan you the money you need, if you make payments of $15 a month for the next nine
months. In keeping with his reputation, he requires that the first payment be paid today. He also
charges you 2 percent interest per month. How much money are you borrowing?


20. You have a sub-contracting job with a local manufacturing firm. Your agreement calls for annual
payments of $82,000 for the next 3 years. At a discount rate of 9.5 percent, what is this job worth to you
today?

[joeduncan]

You posted your finance assignment to a message board? I'm telling professor Walsh!

[joeduncan]

Try using your textbook

[tultul]

Why don't you help if u know the answer?

[tultul]

Is there any problem with you? I am stuck with the assignment and I am asking for help.. if you can help me, then help.. if not then step back.

[sherbix09]

Define what is meant by interest rate risk. Assume you are the manager of a $100 million portfolio of corporate bonds and you believe interest rates will fall. What adjustments should you make to your portfolio based on your beliefs?