BUSN 379 DeVry Entire Course

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BUSN 379 DeVry Entire Course

BUSN379

BUSN 379 DeVry Entire Course

 

BUSN 379 DeVry All Week Discussions

 

BUSN 379 DeVry Week 1 Discussion 1

What are some of the most important financial management decisions? Can you provide some real-life examples?

 

BUSN 379 DeVry Week 1 Discussion 2

Do you believe that the firm’s social responsibilities conflict with the ultimate goal of shareholder’s wealth maximization? Consider issues such as the protection of the environment and the creation of jobs.

 

BUSN 379 DeVry Week 2 Discussion 1

Why does money have a time value? Can you provide at least one real-life scenario in which you can apply the concept of time value of money?

 

BUSN 379 DeVry Week 2 Discussion 2

What is the difference between the annual percentage rate (APR) and the effective annual rate (EAR)? Which rate do you believe is more relevant for financial decisions and why?

 

BUSN 379 DeVry Week 3 Discussion 1

What are some of the most important risks associated with bonds?

 

BUSN 379 DeVry Week 3 Discussion 2

Are there any instances in which companies should not pay dividends? How do dividends impact the value of a share of stock?

 

BUSN 379 DeVry Week 4 Discussion 1

Discuss the pros and cons of net present value.

 

BUSN 379 DeVry Week 4 Discussion 2

Are there situations where a manger would prefer to use IRR? Why?

 

BUSN 379 DeVry Week 5 Discussion 1

What is the difference between systematic and nonsystematic risk? What are some examples of each?

 

BUSN 379 DeVry Week 5 Discussion 2

What are some statistical measures of risk and what type of risk do they measure?

 

BUSN 379 DeVry Week 6 Discussion 1

How can you explain the concept of cost of capital? Do you believe that a firm should use the same cost of capital for all of its projects? Why or why not?

 

BUSN 379 DeVry Week 6 Discussion 2

What is the impact of financial leverage on wealth creation? What is the relationship between financial leverage and risk?

 

BUSN 379 DeVry Week 7 Discussion 1

How are the operating and cash cycles of the firm different? Why are they important?

 

BUSN 379 DeVry Week 7 Discussion 2

What strategies can a firm use to optimize its cash cycle?

 

BUSN 379 DeVry Week 2 Case Study

Case I is due at the end of this week. Prepare a memo in Word, which answers the questions in the Chapter 2 Case, Cash Flows and Financial Statements at Sunset Boards, Inc., on page 51 of the textbook. Use Excel to solve any financial calculations. You will be graded on correct financial analysis, proper use of technology, business-like presentation of technology, and business-like presentation.

Week 2 Case Study I.

  1. Prepare the following (You may put this in Word or submit an Excel):(60/60)
    1. An income statement for 2013 and 2014.
    2. A balance sheet for 2013 and 2014.
    3. Operating cash flow for 2013 and 2014.Hint: find the capital spending and change in net working capital. Ending net fixed assets – Beginning net fixed assets + Depreciation = Net capital spending. Ending NWC – Beginning NWC = Change in NWC. Operating cash flow – Net capital spending – Change in NWC = Cash flow from assets.
    4. Cash flow from assets for 2014
    5. Cash flow to creditors for 2014
    6. Cash flow to stockholders for 2014

 

  1. How would you describe Sunset Boards’ cash flows for 2014?(15/15)

Describe each of: positive earnings, cash flow from operations, net working capital, new fixed assets, total to all stakeholders, total to all bondholders, total to all stockholders. Take this from your work in A.

  1. What do you think about Tad’s expansion plans?(15/15)

 

Hint, address these questions: Is the expansion plan risky? What is the cash flow? What is the capital spending? How much does the company have to raise from creditors? Can they afford to expand?

 

BUSN 379 DeVry Week 4 Case Study

Case II is due at the end of this week. For this assignment, prepare a memo in Word, which answers the questions in the Chapter 5 case, S & S Air’s Mortgage, on page 165 of the textbook. Use Excel to do any financial calculations. You will be graded on correct financial analysis, proper use of technology, and business-like presentation.

Good work effort with Week 4 Case Study II.

  1. Mortgage Payments(10/10)
  2. What are the monthly payments for a 30-year traditional mortgage?
  3. What are the monthly payments for a 20-year traditional mortgage?
  4. Amortization (15/15)
  5. Prepare an amortization table for the first six months of the traditional 30-year mortgage.

Year    / Beginning Balance / Total Payment / Interest Paymt / Principal Paymt / Ending Balance

1          / $35,000,000.00 / 212,098.17 / 177,916.67 / 34,181.51 / 34,965,818.49

2          / 34,965,818.49 / 212,098.17 / 177,742.91 / 34,355.26 / 34,931,463.23

3          / 34,931,463.23 / 212,098.17 / 177,568.27 / 34,529.90 / 34,896,933.32

4          / 34,896,933.32 / 212,098.17 / 177,392.74 / 34,705.43 / 34,862,227.89

5 / 34,862,227.89 / 212,098.17 / 177,216.33 / 34,881.85 / 34,827,346.04

6 / 34,827,346.04 / 212,098.17 / 177,039.01 / 35,059.17 / 34,792,286.88

  1. How much of the first payment goes toward principal? Hint: just pull this number from your table.
  2. Smart Loan (25/25)
  3. How long would it take for S&S Air to pay off the smart loan assuming 30-year traditional mortgage payments? Hint: The payment for a loan repaid with equal payments is the annuity payment with the loan value as the PV of the annuity.

Bi-weekly payoff =

Bi-weekly payoff =

  1. Why is this shorter than the time needed to pay off the traditional mortgage?

The bi-weekly payments pay off the loan quicker for two reasons. First, one-half of the payment gets to the bank quicker each month, which reduces the interest that accrues each month. Second, the company is actually making 13 full payments each year (26 bi-weekly periods amounts to 13 monthly payments).

  1. How much interest would the company save?
  2. Assume S&S Air takes out a bullet loan under the terms described. What are the payments on the loan?(15/15)
  3. Monthly payments
  4. Bullet Payment
  5. What are the payments for the interest-only loan?(15/15)
  6. Which mortgage is the best for the company? Are there any potential risks in this action?(10/10)

 

BUSN 379 DeVry Week 6 Case Study

Case III – Chapter 8 Case, Bullock Gold Mining, page 274 is due this week.

See the Syllabus section “Due Dates for Assignments & Exams” for due date information.

Week 6 Case Study III.

  1. Construct a spreadsheet to calculate the payback period, internal rate of return, modified internal rate of return, and net present value of the proposed mine. You must submit the spreadsheet. Repeat your answers below.(60/60)
  2. Based on your analysis, should the company open the mine?(30/30) Since
  3. Bonus Question (not graded): Most spreadsheets do not have a built-in formula to calculate the payback period. Write a VBA script that calculates the payback period for a project.

Work written clearly and without errors of spelling or syntax. Points deducted: 0

Late fee. Points deducted: 0

Your work was distinguished. You answered the questions fully. Your writing was clear and free of errors.

Total Points: 90

Dr. Geoff

Your answers for section 3 and 6 were incorrect.

Your work was distinguished. You answered the questions fully. Your writing was clear and free of errors.

You would have received fewer deductions if you had shown your work. Your writing was clear and free of errors. Your answers for section 3, 5, 6, 8 and 10 were incorrect.

 

BUSN 379 DeVry Complete Homework Package

BUSN 379 DeVry Week 1 Homework

Please complete the following exercises from Chapter 2 of your textbook and post them in the Dropbox.

Chapter 2: 8, 14, and 19

Week 1Assignment. Chapter 2: 8, 14, and 19

2.8

What is the OCF?(5/5)

2.14

  1. What is the OCF?(20/20)
  2. What is the cash flow to creditors? (Show work):
  3. What is the cash flow to stockholders? (Show work):
  4. What is the addition to the NWC (the change in the NWC)? Find the cash flow from assets then use the cash flow from assets equation to find the change in NWC (Show work):

2.19

  1. What is the Net Income?(15/15)
  2. What is the operating cash flow for the year? (Show work):
  3. Explanation of results.

 

BUSN 379 DeVry Week 2 Homework

Please complete the following exercises from Chapters 4 and 5 of your textbook and post them in the Dropbox.

Chapter 4: 8, 17, and 18

Chapter 5: 1, 4, and 12

Week 2Assignment.Chapter 4: 8, 17, and 18 and Chapter 5: 1, 4, and 12

4.8

What is the Rate of Return? (6/6)

4.17

What must you invest today? Find the PV of a lump sum.(6/6)

4.18

What is the FV. Find the FV of a lump sum.(6/6)

  1. First Scenario:
  2. If you wait 10 years, the value of your deposit at your retirement will be:

5.1

Find the PV of each cash flow 🙁 6/6 )

5.4

Find the PV of an Annuity and a Perpetuity: (8/8)

To find the PV of a perpetuity, we use the equation: PV = C / r

5.12

Find the EAR: (8/8)

 

BUSN 379 DeVry Week 3 Homework

Chapter 6: 16

Chapter 7: 11 and 12

Week 3Assignment.Chapter 6: 16 and Chapter 7: 11 and 12

6.16.Find % Change of Bond Bill and Ted(24/24)

a.If the YTM suddenly rises to 9 percent:(Show work):

b.If the YTM suddenly falls to 5 percent:

c.

  1. What does this problem tell you about the interest rate risk of longer-term bonds?

7.11.With a return of 8 percent on this stock, how much should you pay? (4/4)

7.12.Value a stock with two different required returns. Use the constant growth model.(12/12)

a.Price @ required return of 12%:

b.Price @ required return of 8%:

c.What does a higher required return meanto the stock ?

6.16d: All else the same, the longer the maturity of a bond, the greater is its price sensitivity to changes in interest rates.

7.12c All else held constant, a higher required return means that the stock will sell for a lower price. Also, notice that the stock price is very sensitive to the required return. In this case, the required return fell by 1/3 but the stock price more than doubled.

 

BUSN 379 DeVry Week 4 Homework

Please complete the following exercises from Chapter 8 of your textbook and post them in the Dropbox.

Chapter 8: 3, 4, 5, and 6

Chapter 7: 3, 4, 5, and 6

8.3

Which Project should be accepted A or B?(4/4)

8.4

Calculate AAR, the average net income divided by the average book value.(12/12)

a.Average net income =

b.Average book value =

c.AAR =

8.5

Calculate IRR:(8/8)

a.IRR =

b.Should the project be accepted and why? .

8.6

Calculate NPV:the PV of the outflows minus by the PV of the inflows.(16/16)

a.@ 9% required return.

b.Should the project be accepted:

c.@ 21% required return.

d.Should the project be accepted:

 

 

BUSN 379 DeVry Week 5 Homework

Please complete the following exercises from Chapter 11 of your textbook and post them in the Dropbox.

Chapter 11: 4, 7, 17, and 29

 

BUSN 379 DeVry Week 6 Homework

Please complete the following exercises from Chapters 12 and 13 of your textbook and post them in the Dropbox.

Chapter 12: 3, 5, 6, and 15

Chapter 13: 1

 

BUSN 379 DeVry Week 7 Homework

Please complete the following exercises from Chapter 17 of your textbook and post them in the Dropbox.

Chapter 17: 6, 7, and 14

 

BUSN 379 DeVry Final Exam

  1. (TCO 4)Which of the following is true regarding the evaluation of projects?
  2. (TCO 4)Which of the following investment ranking methods does not consider the time value of money?
  3. (TCO 3 and 4)You can ensure that an investment is expected to create value for
  4. (TCO 3 and 4)What is the net present value of a project with the following cash flows, if the discount rate is 10 percent?
  5. (TCO 4)Howard Company is considering a new project that will require an initial cash investment of $575,000. The project will produce no cash flows for the first three years. The projected cash flows for years 4 through 8 are $73,000, $112,000, $124,000, $136,000, and $145,000, respectively. How long will it take the firm to recover its initial investment in this project?
  6. (TCO 4)The postponement of a project until conditions are more favorable:
  7. (TCO 4)___________, occurs when a firm cannot raise financing for a project under any circumstances.
  8. (TCO 4)ABC Cameras is considering an investment that will have a cost of $10,000 and the following cash flows: $6,000 in year 1, $4,000 in year 2 and $3,000 in year 3. Assume the cost of capital is 10%. Which of the following is true regarding this investment?
  9. (TCO 4)Assume Company X plans to invest $60,000 in industrial equipment. Using Tables 9.6 and 9.7 of your textbook (Page 277), which is the first year depreciation amount under MACRS?
  10. (TCO 1 and 4)Assume a corporation has earnings before depreciation, and taxes of $100,000, depreciation of $40,000, and that it has a 30 percent tax bracket. What are the after-tax cash flows for the company?
  11. (TCO 8)Which of the following statements is true regarding systematic risk?
  12. (TCO 8)Which statement is true regarding risk?
  13. (TCO 8)The stock of Chocolate Galore is expected to produce the following returns, given the various states of the economy. What is the expected return on this stock?
  14. (TCO 8)You own a portfolio that consists of $8,000 in stock A, $4,600 in stock B, $13,000 in stock C, and $5,500 in stock D. What is the portfolio weight of stock D?
  15. (TCO 8)You currently own a portfolio valued at $24,000 that has a beta of 1.1. You have another $8,000 to invest, and would like to invest it in a manner such that the risk of the new portfolio matches that of the overall market. What does the beta of the new security have to be?

 

  1. (TCO 8) If the financial markets are strong form efficient, then:
  2. (TCO 5)Royal Petroleum Co. can buy a piece of equipment that can be financed with debt at a cost of 9 percent (after-tax) and common equity at a cost of 16 percent. Assume debt and common equity each represent 50 percent of the firm’s capital structure. What is the weighted average cost of capital?
  3. (TCO 5, 6 and 7)An issue of common stock is expected to pay a dividend of $4.80 at the end of the year. Its growth rate is equal to eight percent. If the required rate of return is 13 percent, what is its current price?
  4. (TCO 5, 6 and 7)Which of the following is not true regarding the cost of debt?
  5. (TCO 5) Which of the following is not true regarding the cost of retained earnings?
  6. (TCO 4)A project has the following cash flows. What is the internal rate of return?
  7. (TCO 5, 6 and 7)Which one of the following is a correct statement regarding a firm’s weighted average cost of capital (WACC)?
  8. (TCO 5, 6 and 7)The six percent preferred stock of FKH Manufacturing is selling for $62 a share. What is the firm’s cost of preferred stock, if the tax rate is 34 percent and the par value per share is $100?
  9. (TCO 2) Which one of the following occurs if a firm files for Chapter 7 bankruptcy, but does not generally occur if the firm files for Chapter 11 bankruptcy?
  10. (TCO 5)Which of the following statements is false regarding the cost of capital?
  11. (TCO 2)Select any actions that do not affect the cash account.
  12. (TCO 2)Which of the following statements is true?
  13. (TCO 2)Which one of the following industries is most apt to have the shortest cash cycle?
  14. (TCO 2)Delphinia’s has the following estimated quarterly sales for next year. The accounts receivable period is 30 days. What is the expected accounts receivable balance at the end of the second quarter? Assume each month has 30 days.
  15. (TCO 1)Why is maximization of the current value per share a more appropriate financial management goal than profit maximization?
  16. (TCO 1)Provide three examples of recent well-known unethical behavior cases. Explain the situation in one or two paragraphs. How do you believe that this behavior affected the firm’s value?
  17. (TCO 4)What are sunk costs? Provide at least two real-life examples of sunk costs for a project. Should sunk costs be included as incremental cash flows? Why or why not? Explain your rationale.
  18. (TCO 8)What is the difference between business risk and financial risk? If Company A has a higher business risk than Company B, should its cost of capital be higher? Why or why not? Explain your rationale.
  19. (TCO 2)What are some important factors to consider when conducting a credit evaluation and scoring?
  20. (TCO 6 and 7)Do you believe that it is appropriate for some industries to be more leveraged than others? Explain your rationale.