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2. This tutorial does not contain Final Exam Guide FIN 515 Week 1 DQ 1 Accounting Versus Finance FIN 515 Week 1 DQ 2 Financial Analysis FIN 515 Week 1 Quiz FIN 515 Week 1 Quiz (New) FIN 515 Week 1 Problem Set FIN 515 Week 2 DQ 1 TVM Pass-a-Problem FIN 515 Week 2 DQ 2 Assumptions of the TVM Model FIN 515 Week 2 Quiz FIN 515 Week 2 Problem Set FIN 515 Entire Course

3. This Tutorial contains Week 3 Course Project (3 Sets) Week 6 Course Project (2 Sets) FIN 515 Course Project 1 and 2

4. FIN 515 Final Exam Set 1 FIN 515 Final Exam Set 2 FIN 515 Final Exam Set 3 FIN 515 Final Exam (all 3 Sets)

5. 1. (TCO A) In the United States, which of the following types of organization has the greatest revenue in total? (Points : 5)a. Sole proprietorshipb. C corporationc. S corporationd. Limited partnership 1.1) Which of the following is not a step in the WACC valuation method?A) Compute the value of the investment, including the tax benefit of leverage, by discounting the free cash flow of the investment using the WACC.B) Compute the weighted average cost of capital.C) Determine the free cash flow of the investment.D) Adjust the WACC for the firm's current debt/equity ratio. 1. (TCO H) Zervos Inc. had the following data for 2008 (in millions). FIN 515 Final Exam Set 1

6. Question 1.1. (TCO A) Double taxation is a drawback for which of the following types of business organization except? Question 2.2. (TCO A) Sole proprietorships have all of the following advantages except Question 3.3. (TCO B) Which of the following would cause the present value of an annuity to decrease? Question 4.4. (TCO B) In a TVM calculation, if incoming cash flows are positive, outgoing cash flows must be Question 5.5. (TCO G) If net income, total assets, and book value of equity stayed the same, what would be the effect on the DuPont Identity of an increase in sales? Question 6.6. (TCO D) A stock has just paid a dividend and will pay a dividend of $3.00 in a year. The dividend will stay constant for the rest of time. The return on equity for similar stocks is 14%. What is P0? Question 7.7. FIN 515 Final Exam Set 2

7. 1. (TCO A) In the United States, which of the following types of organization has the greatest revenue in total? (Points : 5) Sole proprietorship C corporation S corporation Limited partnership Question 2.2. (TCO A) A sole proprietorship is owned by (Points : 5) one person. one or two people, but if there are two owners, they must be married to each other. up to 100 owners. up to 64 owners. Question 3.3. (TCO B) Which of the following would cause the present value of an annuity to decrease? (Points : 5) Reducing the number of payments. Increasing the number of payments. Decreasing the interest rate. Decreasing the liquidity of the payments. Question 4.4. FIN 515 Final Exam Set 3

8. Accounting Versus Finance (graded) Much of the analysis done by financial managers is based on numbers that are different from what would seem to the corresponding numbers presented in the financial statements. This difference is not due to any kind of cooking the books or other attempts to mislead anyone. One example is the use of market value rather than historical cost in the valuation of assets. What are some other examples of the differences between financial management and financial accounting? FIN 515 Week 1 DQ 1 Accounting Versus Finance

9. Financial Analysis (graded) In this discussion, we will be working with the variety of financial analysis tools available to us. Let's start with the DuPont Identity introduced in Chapter 2 of the text. For your initial post, locate the financial statements for two firms in one industry. Calculate all four terms of the DuPont Identity and present the results but do not analyze the results. For an additional post, analyze the results that another student has posted. If you were the appropriate financial manager of one of the firms that you analyzed, what would be your observations and recommendations? FIN 515 Week 1 DQ 2 Financial Analysis

10. Chapter 1 The Corporation 1-1. What is the most important difference between a corporation and all other organizational forms? 1-2. What does the phrase limited liability mean in a corporate context? 1-3. Which organizational forms give their owners limited liability? 1-4. What are the main advantages and disadvantages of organizing a firm as a corporation? 1-5. Explain the difference between an S corporation and a C corporation. 1-6. You are a shareholder in a C corporation. The corporation earns $2 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. The corporate tax rate is 40% and the personal tax rate on (both dividend and non-dividend) income is 30%. How much is left for you after all taxes are paid? 1-7. Repeat Problem 6 assuming the corporation is an S corporation. Chapter 2 Introduction to Financial Statement Analysis 2-8. In early 2009, General Electric (GE) had a book value of equity of $105 billion. FIN 515 Week 1 Problem Set

11. Question 1. (TCO G) The lecture says that some ratios typically are better when they are higher and some of the ratios are better when they are lower. Pick a ratio for which a lower number typically would be preferred and describe a situation, in which a higher number for that ratio would be preferred, OR pick a ratio for which a higher number typically would be preferred and describe a situation in which a lower number for that ratio would be preferred. Question 2. (TCO G) As of December 31, 20XX, David Corp's accounts payable were $4,000,000. Its accounts receivable were $2,200,000, and its sales for 20XX were $32,000,000. What was its days sales outstanding? Question 3. (TCO G) As of December 31, 2015, Michael Corp's current assets were $2,000,000. Its current liabilities were $2,000,000. Its sales for 2015 were $50,000,000. As of December 31, 2016, Michael Corp's current assets were $3,000,000. Its current liabilities were $3,000,000. Its sales for 2016 were $65,000,000. Management has asked you to comment on these numbers. FIN 515 Week 1 Quiz(New)

12. Question 1 (TCO G) Which do you think provides a more valid measure of how a company is doing, comparison of current results with historical results or comparison of current results with the current results of another company? Question 2 (TCO G) Barnes Corp’s total assets at the end of last year were $415,000,000 and its net income after taxes was $17,750,000. What was its return on total assets? Question 3 (TCO G) Between December 31, 2016 and December 31, 2017, ROE at Bobcat Industries decreased even though sales increased. Using the DuPont Identity, explain what else could have happened to cause this. FIN 515 Week 1 Quiz

13. FIN 515 Week 1 DQ 1 Accounting Versus Finance FIN 515 Week 1 DQ 2 Financial Analysis FIN 515 Week 2 DQ 1 TVM Pass-a-Problem FIN 515 Week 2 DQ 2 Assumptions of the TVM Model FIN 515 Week 3 DQ 1 Examples of Capital Expenditure From Your Industry FIN 515 Week 3 DQ 2 Capital Budgeting Terms and Considerations FIN 515 Week 4 DQ 1 Market Value of a Stock Versus DDM Value FIN 515 Week 4 DQ 2 Differences in YTM of Real Life Bonds FIN 515 Week 5 DQ 1 Calculating WACC for a Real Firm FIN 515 Week 5 DQ 2 Finding Stock Values for Real Stocks Using Beta and the SML FIN 515 Week 6 DQ 1 Examples of Real Agency Problems and How They Could Have Been Prevented FIN 515 Week 6 DQ 2 The Role of Financial Managers in Ethical Corporate Governance FIN 515 Week 7 DQ 1 Industry Approaches to Working Capital Financing FIN 515 Week 7 DQ 2 Your Preference for Working Capital Management Policy FIN 515 Week 1-7 DQs

14. TVM Pass-a-Problem (graded) • This week, the lecture provided some examples of TVM problem scenarios. For your first post, provide a story problem that can be solved using one or more of the TVM calculations. • Your second post can be a description of how the problem posed by another student can be solved. Your professor may provide an example. FIN 515 Week 2 DQ 1 TVM Pass-a-Problem

15. Assumptions of the TVM Model (graded) What are some of the assumptions behind the TVM calculations? How do these assumptions limit our application of these calculations? FIN 515 Week 2 DQ 2 Assumptions of the TVM Model

16. 3.Calculate the future value of $2000 in a. five years at an interest rate of 5% per year; b. ten years at an interest rate of 5% per year; and c. five years at an interest rate of 10% per year. d. Why is the amount of interest earned in part (a) less than half the amount of interest earned in part (b)? 4.What is the present value of $10,000 received a. twelve years from today when the interest rate is 4% per year; b. twenty years from today when the interest rate is 8% per year; and c. six years from today when the interest rate is 2% per year? 5.Your brother has offered to give you either $5,000 today or $10,000 in 10 years. If the interest rate is 7% per year, which option is preferable? 6.Consider the following alternatives. i. $100 received in 1 year ii. $200 received in 5 years iii. $300 received in 10 years a. Rank the alternatives from most valuable to least valuable if the interest rate is 10% per year. FIN 515 Week 2 Problem Set

17. FIN 515 Week 2 Quiz Question 1 (TCO B) You are a trust fund baby. Your trust fund is currently worth $1,234,000. The problem is the terms of the trust don’t allow you to receive any of the money until you are 27. You are now 21. The fund is earning 7.7% per year. How much will the fund be worth when you are 27 and too old to enjoy it?Ignore taxes. Show your work. If you use Excel, show the formula with the parameters, and the answer. If you use a formula, provide the standard formula, the formula with terms substituted, and the answer. FIN 515 Week 2 Quiz

18. This Tutorial contains 3 Different Course Projects First Course ProjectThe purpose of this project is to help you develop skills not only in performing the calculations behind financial analysis but interpreting the numbers as well.You are to pick a company. You should pick one either from the industry in which you are currently working or an industry in which you are interested. You could also pick a division of a company. It is imperative to use that sufficient data about your company and that it is available. One way to do this is to pick a publicly held company. If you pick a privately held company or a division of a company, make sure that the data necessary to do a significant financial analysis is available.If you use data that is not publicly available, be sure to talk to your manager and to make absolutely sure that revealing that data is not a problem.You will also need to find a standard against which to compare your findings. This could be a different company in the same industry. This could also be the same company at a different time. FIN 515 Week 3 Course Project 1 (3 Papers)

19. FIN 515 Week 3 DQ 1 Examples of Capital Expenditure From Your Industry (graded) Describe a potential capital expenditure project from the industry in which you now work or an industry in which you are interested. What is the project? Describe and provide an approximate value of the initial cash flow. Describe and provide an approximate value of the annual cash flows. Provide an estimation of the life of the project, as well as the exit costs. FIN 515 Week 3 DQ 1 Examples of Capital Expenditure From Your Industry

20. Capital Budgeting Terms and Considerations Our textbook and lecture discuss some considerations that should be taken into account when doing capital budgeting. How will these considerations affect the project you described in the other topic? Incremental earnings, interest expenses, taxes, opportunity costs, externalities, sunk costs, cannibalization or erosion, depreciation, and salvage value; as well as others. FIN 515 Week 3 DQ 2 Capital Budgeting Terms and Considerations

21. Week 3 Problem Set 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%. FIN 515 Week 3 Problem Set

22. Company A has a beta of 2.77. Company B has a beta of .73. Company C has a beta of .90. The risk free rate is 6% and the market risk premium is 4%. What is the expected return of investing in Company B? stock portfolio consists of only two stocks. You have $15,000 in Company A and $25,000 in Company B. Company A has an actual return of -8% and Company B has a return of 12%. What is the return on your portfolio? A company has a capital structure of 40% debt and 60% equity. The YTM on the company’s bonds is 9%, and the company’s effective tax rate is 40%. The CFO has estimated the company’s WACC to be 9.96%. What is the company’s cost of equity? FIN 515 Week 3 Quiz

23. Market Value of a Stock Versus DDM Value (graded) Select a stock in which you are interested. Calculate its per share value using the DDM or another method discussed in Chapter 9. Then find the current market value of a share of the stock. Compare that two. Can you explain the similarity or difference? FIN 515 Week 4 DQ 1 Market Value of a Stock Versus DDM Value

24. Differences in YTM of Real Life Bonds (graded) Do some research, probably on the Web, and find some bonds with differing yields to maturity (YTM). How do you explain the difference? Both the lecture and the textbook discuss some factors that may lead to this difference. FIN 515 Week 4 DQ 2 Differences in YTM of Real Life Bonds

25. Question 1. Question : (TCO G) The firm's asset turnover measures Question 2. Question : (TCO G) If Moon Corporation has an increase in sales, which of the following would result in no change in its EBIT margin? Question 3. Question : (TCO B) You plan on retiring in 20 years. You currently have $275,000 and think you will need $1,000,000 to retire. Assuming you don’t deposit any additional money into the account, what annual return will you need to earn to meet this goal? Question 4. Question : (TCO B) You take out a 4 year car loan for $18,000.  FIN 515 Week 4 Midterm

26. 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. FIN 515 Week 4 Problem Set

27. Calculating WACC for a Real Firm (graded) The Weighted Average Cost of Capital (WACC) for a firm can be calculated or found through research. Select two firms in the same industry. The industry may be that in which you currently work or it may be an industry in which you are interested. Calculate or find the WACC for the two firms. How do the WACCs compare? Are the WACCs what you would expect? What causes the differences between the two firms' WACCs? FIN 515 Week 5 DQ 1 Calculating WACC for a Real Firm

28. Finding Stock Values for Real Stocks Using Beta and the SML (graded) Our second discussion topic concerns the calculation of stock values using the Capital Asset Pricing Model (CAPM). We will start with a discussion of risk and work towards practical application of the model. The textbook provides a list of betas for a selection of stocks. Choose a few firms from that list and discuss whether the betas are what you would expect. Be sure to explain why or why not. FIN 515 Week 5 DQ 2 Finding Stock Values for Real Stocks Using Beta and the SML

29. Chapter 10 (pages 345–348): 4. You bought a stock one year ago for $50 per share and sold it today for $55 per share. It paid a $1 per share dividend today. What was your realized return? How much of the return came from dividend yield and how much came from capital gain? 20. Consider two local banks. Bank A has 100 loans outstanding, each for $1 million, that it expects will be repaid today. Each loan has a 5% probability of default, in which case the bank is not repaid anything. The chance of default is independent across all the loans. Bank B has only one loan of $100 million outstanding, which it also expects will be repaid today. It also has a 5% probability of not being repaid. Explain the difference between the type of risk each bank faces. Which bank faces less risk? Why? FIN 515 Week 5 problem Set

30. Question 1 (TCO C) Company A has a beta of 2.77. Company B has a beta of .73. Company C has a beta of .90. The risk free rate is 6% and the market risk premium is 4%. What is the expected return of investing in Company B? Show your work. Question 2. (TCO C) Your stock portfolio consists of only two stocks. You have $30,000 in Company A and $35,000 in Company B. Company A has an actual return of -8% and Company B has a return of 12%. What is the return on your portfolio? Show your work. Question 3. (TCO E) A company has a capital structure of 40% debt and 60% equity. The YTM on the company’s bonds is 9%, and the company’s effective tax rate is 40%. The CFO has estimated the company’s WACC to be 9.96%. What is the company’s cost of equity? Show your work. FIN 515 Week 5 Quiz

31. This Tutorial contains 2 Different Course Projects Second Project The purpose of this project is for you to have some practice working with financial concepts in the real world. This will involve integrating some material from throughout the course. The project will also involve the development of your own approach to doing the work. The project does not provide a step-by-step procedure for you to follow. Your task is to determine the WACC for a given firm using what you know about WACC as well as data you can find through research. Your deliverable is to be a brief report in which you state your determination of WACC, describe and justify how you determined the number, and provide relevant information as to the sources of your data. Assumptions As you recall, the formula for WACC is rWACC = (E/E+D) rE + D/(E+D) rD (1-TC) The formula for the required return on a given equity investment is ri= rf + βi * (RMkt-rf) RMkt-rf is the Market Risk Premium. For this project, you may assume the Market Risk Premium is 4% unless you can develop a better number. rf is the risk free rate. The YTM on 10 year US Treasury securities is a good approximation. FIN 515 Week 6 Course Project 2 (2 Different Projects)

32. Chapter 29 (pages 983-984): 1.What inherent characteristic of corporations creates the need for a system of checks on manager behavior? 2. What are some examples of agency problems? 3.What are the advantages and disadvantages of the corporate organizational structure? 4.What is the role of the board of directors in corporate governance? 1.What inherent characteristic of corporations creates the need for a system of checks on manager behavior? 2.What are some examples of agency problems? 3.What are the advantages and disadvantages of the corporate organizational structure? Managing Agency Conflict 4.Suppose Goodyear Tire and Rubber Company is considering divesting one of its manufacturing plants. The plant is expected to generate free cash flows of $1.5 million per year, growing at a rate of 2.5% per year. FIN 515 Week 6 Problem Set

33. Industry Approaches to Working Capital Financing (graded) Do some research on two firms in your industry or an industry in which you are interested. Can you get an idea of their working capital management policies from publicly available information? How do the two companies differ in their apparent working capital management policies? Which policy do you think is better and why? FIN 515 Week 7 DQ 1 Industry Approaches to Working Capital Financing

34. Your Preference for Working Capital Management Policy (graded) Consider the company you work for or a company in which you are interested. Also, do some research to find some current cost estimates for various means of financing working capital. What would be your recommendation to the company for financing its working capital needs? If the information is publicly available, or if you have access to it AND have permission to discuss it, how does your recommendation compare what the firm is actually doing? FIN 515 Week 7 DQ 2 Your Preference for Working Capital Management Policy

35. 1. Answer the following questions: a. What is the difference between a firm’s cash cycle and its operating cycle? 2. How will a firm’s cash cycle be affected if a firm increases its inventory, all else being equal? 2. 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. 2. greatest? When does it have surplus cash? FIN 515 Week 7 Problem Set

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