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Introductory Financial Accounting
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FIN 300 Colorado State University Critical Thinking Irr Calculations Worksheet
Option #1: Capital RationingTable with Cash Flows for 5 projects.Project AProject BProject CProject DProject EInitial Inve ...
FIN 300 Colorado State University Critical Thinking Irr Calculations Worksheet
Option #1: Capital RationingTable with Cash Flows for 5 projects.Project AProject BProject CProject DProject EInitial Investment-$100,000-$25,000-$40,000-$10,000-$150,000Year 1$50,000$15,000$20,000$7,000$100,000Year 2$40,000$10,000$15,000$4,000$25,000Year 3$20,000$5,000$5,000$2,000$10,000Year 4$10,000$1,000$5,000$1,000$10,000Year 5 $1,000 $10,000Year 6 $1,000 $10,000Calculate the IRR for each of the projects presented. Rank the projects based on their IRR.Graph the projects on an Investment Opportunity Schedule (interest rate on the vertical axis and initial investment on the horizontal). Suppose the firm has a capital rationing amount of $170,000 and a required rate of return of 10%.Which projects should the firm implement based on your analysis using the IRR approach above? Write an email to your CFO explaining your rationale proving the choices based on the considerations of shareholder value and the maximum investment budget.Submit your 3 to 4 page paper in a Word document, showing all of your calculations (attach Excel File if necessary) with a minimum of four references.Use terms, evidence, and concepts from class readings.
1 page
Skills Reflection For Career Success
My academic journey has been challenging but enjoyable to where I have reached now. As a child, I did not like attending s ...
Skills Reflection For Career Success
My academic journey has been challenging but enjoyable to where I have reached now. As a child, I did not like attending school. However, as I went ...
George Mason University Stock Dividend vs Stock Split Research Paper
Please respond to the following:Contrast the differences between a stock dividend and a stock split.Imagine that you are a ...
George Mason University Stock Dividend vs Stock Split Research Paper
Please respond to the following:Contrast the differences between a stock dividend and a stock split.Imagine that you are a stockholder in a company. Determine whether you would prefer to see the company that you researched declare a 100% stock dividend or declare a two-for-one split. Provide support for your answer with one real-world example of your preference.
Capital Budgeting Measurement Criteria quiz help
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Question
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Capital Budgeting Measurement Criteria quiz help
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Question
1
Question:
Which factor is not considered when determining a form of business
organization?
a.
Who owns the firm?
b.
The owners' risks.
c.
The tax ramifications.
d.
The physical location of the
business.
Question
2
What should
a firm's primary objective be, given that it might actually be the most
beneficial for society in the long run?
a.
Minimizing layoffs.
b.
Maximizing market share.
c.
Minimizing costs.
d.
Maximizing shareholder value.
Question
3
What is the
definition of the term agency problem?
a.
The difficulties that arise in
professional baseball when players become free agents.
b.
The difficulties that arise when a
principle hires an agency to represent their company.
c.
The difficulties that arise when a
principle hires an agent and cannot fully monitor the agent's actions.
d.
When a principle hires an agent
and must monitor every move they make, because they have found the agent to
be unethical.
Question
4
A particular security's default risk
premium is 3 percent. For all securities, the inflation risk premium is 1.75
percent and the real interest rate is 4.2 percent. The security's liquidity
risk premium is 0.35 percent and the maturity risk premium is 0.95 percent. The
security has no special covenants. What is the security's equilibrium rate of
return?
a.
8.50 percent.
b.
6.05 percent.
c.
10.25 percent.
d.
9.90 percent.
Question
5
Which of the following statements is
correct?
a.
An IPO is an example of a primary
market transaction.
b.
Money markets are subject to wider
price fluctuations and are therefore more risky than capital market
instruments.
c.
A direct transfer of funds is more
efficient than using financial institutions.
d.
The market segmentation theory
argues that different investors have different risk preferences, which
determine the shape of the yield curve.
Question
6
Which of the following transactions
in NOT a secondary market transaction?
a.
GE sells $30 million of new
preferred stock.
b.
Microsoft sells $2 million of IBM
preferred stock out of its marketable securities portfolio.
c.
The Magellan Fund buys $100
million of Apple previously issued bonds.
d.
Allstate Insurance Company. Sells
$5 million in IBM bonds.
Question
7
How are future values affected by
changes in interest rates?
a.
The lower the interest rate, the
larger the future value will be.
b.
The higher the interest rate, the
larger the future value will be.
c.
Future values are not affected by
changes in interest rates.
d.
One would need to know the present
value to determine the impact.
Question
8
Which of the following statements
about the future value of a dollar is true?
a.
A dollar paid (or received) in the
future is worth more than a dollar paid (or received) today.
b.
A dollar paid (or received) in the
future is worth as much as a dollar paid (or received) today.
c.
A dollar paid (or received) in the
future is worth less than a dollar paid (or received) today.
d.
A dollar paid (or received) in the
future is not comparable to a dollar paid (or received) today.
Question
9
Which of the
following statements about calculating the number of years needed to grow an
investment to a specific amount of money is true?
a.
The lower the interest rate, the
shorter the time period needed to achieve the growth.
b.
The higher the interest rate, the
shorter the time period needed to achieve the growth.
c.
The interest rate has nothing to
do with the length of the time period needed to achieve the growth.
d.
The Rule of 72 is the only way to
calculate the time period needed to achieve the growth.
Question
10
What is the correct term for level
sets of frequent, consistent cash flows?
a.
Loans.
b.
Budgets.
c.
Annuities.
d.
Bills.
Question
11
What does a loan amortization
schedule show?
a.
The principal balance paid per
period only.
b.
The interest paid per period only.
c.
Both the principal balance and
interest paid per period.
d.
The present value of the payments
due.
Question
12
Which bond sells for a price lower
than its par value?
a.
A discount bond.
b.
A premium bond.
c.
A junk bond.
d.
A municipal bond.
Question
13
Which bond makes no interest
payments?
a.
A bond whose coupon rate is equal
to the market interest rates.
b.
A bond whose coupon rate is
greater than the market interest rates.
c.
A bond whose coupon rate is less
than the market interest rates.
d.
A zero coupon bond.
Question
14
A 6-percent corporate coupon bond is
callable in 10 years for a call premium of one year of coupon payments. Assuming
a par value of $1,000, what is the price paid to the bondholder, if the issuer
calls the bond?
a.
$60
b.
$600
c.
$1000
d.
$1060
Question
15
As residual claimants, which
investors claim any cash flows to the firm that remain after the firm pays all
other claims?
a.
Creditors.
b.
Bondholders.
c.
Preferred stockholders.
d.
Common stockholders.
Question
16
What is the composition of the Dow
Jones Industrial Average?
a.
All stock listed on the New York
Stock Exchange.
b.
30 of the largest (market
capitalization) and most active companies in the U.S. economy.
c.
The 500 largest firms in their
respective economic sectors.
d.
Fortune Magazine's 500
largest-ranked firms.
Question
17
At your discount brokerage firm, it
costs $9.95 per stock trade. How much money do you need to buy 100 shares of
Ralph Lauren (RL), which trades at $85.13?
a.
$8,503.05.
b.
$8,503.00.
c.
$8,522.95.
d.
$9,508.00.
Question
18
Which of the following terms is
defined as the volatility of an investment, including firm-specific risk, as
well as market risk?
a.
Diversifiable risk.
b.
Market risk.
c.
Standard deviation.
d.
Total risk.
Question
19
What is the correct ranking for the
following stocks, highest to lowest, based on their total risk level?
Night Ryder has an average return of 15 percent and a
standard deviation of 35 percent.
WholeMart has an average return of 13 percent and a
standard deviation of 25 percent
Fruit Fly has an average return of 19 percent and a standard
deviation of 30 percent.
a.
(1) Fruit Fly, (2) Night Ryder,
(3) WholeMart
b.
(1) Night Ryder, (2) WholeMart,
(3) Fruit Fly
c.
(1) Night Ryder, (2) Fruit Fly,
(3) WholeMart
d.
(1) WholeMart, (2) Fruit Fly, (3)
Night Ryder
Question
20
An investor owns $10,000 of Adobe
Systems stock, $15,000 of Dow Chemical, and $25,000 of Office Depot. What are
the portfolio weights of each stock?
a.
Adobe Systems = 0.3333, Dow
Chemical = 0.3333, Office Depot = 0.3333.
b.
Adobe Systems = 0.2, Dow Chemical
= 0.3, Office Depot = 0.5.
c.
Adobe Systems = 0.3, Dow Chemical
= 0.2, Office Depot = 0.5.
d.
Adobe Systems = 0.2667, Dow
Chemical = 0.3333, Office Depot = 0.4.
Question
21
Which of the following returns is
the average of the possible returns weighted by the likelihood of those returns
occurring?
a.
Efficient return.
b.
Expected return.
c.
Market return.
d.
Required return.
Question
22
What is typically considered to be
the return on U.S. government bonds and bills and equals the real interest and
the expected inflation premium?
a.
Required return.
b.
Risk-free rate.
c.
Risk premium.
d.
Market risk premium.
Question
23
What is a measure of the sensitivity
of a stock or portfolio to market risk?
a.
Behavioral finance.
b.
Beta.
c.
Efficient market.
d.
Hedge.
Question
24
What is a capital budgeting
technique that generates a decision rule and associated metric for choosing
projects, based on the total discounted value of their cash flows?
a.
Payback.
b.
Net present value.
c.
Internal rate of return
d.
Profitability index.
Question
25
What is a capital budgeting
technique that generates decision rules and associated metrics for choosing
projects, based on the implicit, expected geometric average of a project's rate
of return?
a.
Discounted payback.
b.
Net present value.
c.
Internal rate of return.
d.
Profitability index.
St Petersburg College Workplace Change Message Discussion
Pretend that you are the CEO of Milliford Labs. While the company used to be known for its innovation, producing multiple ...
St Petersburg College Workplace Change Message Discussion
Pretend that you are the CEO of Milliford Labs. While the company used to be known for its innovation, producing multiple new products annually and owning a number of important utility patents, you're concerned because only a couple of new products were developed in the past year. As the CEO, you want to turn this around. You’re free to suggest whatever turn-around you want, and you can make up the details as you communicate an inspiring change speech to kick off the company retreat and outline a plan. Take into consideration the executive coach’s advice, and Duarte’s principles of spellbinding presentations. Use business writing (single-spaced, liberal use of headings, bullet points, and charts/graphs/graphics as appropriate). Length should be around 500 or so words.
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FIN 300 Colorado State University Critical Thinking Irr Calculations Worksheet
Option #1: Capital RationingTable with Cash Flows for 5 projects.Project AProject BProject CProject DProject EInitial Inve ...
FIN 300 Colorado State University Critical Thinking Irr Calculations Worksheet
Option #1: Capital RationingTable with Cash Flows for 5 projects.Project AProject BProject CProject DProject EInitial Investment-$100,000-$25,000-$40,000-$10,000-$150,000Year 1$50,000$15,000$20,000$7,000$100,000Year 2$40,000$10,000$15,000$4,000$25,000Year 3$20,000$5,000$5,000$2,000$10,000Year 4$10,000$1,000$5,000$1,000$10,000Year 5 $1,000 $10,000Year 6 $1,000 $10,000Calculate the IRR for each of the projects presented. Rank the projects based on their IRR.Graph the projects on an Investment Opportunity Schedule (interest rate on the vertical axis and initial investment on the horizontal). Suppose the firm has a capital rationing amount of $170,000 and a required rate of return of 10%.Which projects should the firm implement based on your analysis using the IRR approach above? Write an email to your CFO explaining your rationale proving the choices based on the considerations of shareholder value and the maximum investment budget.Submit your 3 to 4 page paper in a Word document, showing all of your calculations (attach Excel File if necessary) with a minimum of four references.Use terms, evidence, and concepts from class readings.
1 page
Skills Reflection For Career Success
My academic journey has been challenging but enjoyable to where I have reached now. As a child, I did not like attending s ...
Skills Reflection For Career Success
My academic journey has been challenging but enjoyable to where I have reached now. As a child, I did not like attending school. However, as I went ...
George Mason University Stock Dividend vs Stock Split Research Paper
Please respond to the following:Contrast the differences between a stock dividend and a stock split.Imagine that you are a ...
George Mason University Stock Dividend vs Stock Split Research Paper
Please respond to the following:Contrast the differences between a stock dividend and a stock split.Imagine that you are a stockholder in a company. Determine whether you would prefer to see the company that you researched declare a 100% stock dividend or declare a two-for-one split. Provide support for your answer with one real-world example of your preference.
Capital Budgeting Measurement Criteria quiz help
Need help with Quiz.
There are no timer but once access must complete. Only get one chance.
Question
...
Capital Budgeting Measurement Criteria quiz help
Need help with Quiz.
There are no timer but once access must complete. Only get one chance.
Question
1
Question:
Which factor is not considered when determining a form of business
organization?
a.
Who owns the firm?
b.
The owners' risks.
c.
The tax ramifications.
d.
The physical location of the
business.
Question
2
What should
a firm's primary objective be, given that it might actually be the most
beneficial for society in the long run?
a.
Minimizing layoffs.
b.
Maximizing market share.
c.
Minimizing costs.
d.
Maximizing shareholder value.
Question
3
What is the
definition of the term agency problem?
a.
The difficulties that arise in
professional baseball when players become free agents.
b.
The difficulties that arise when a
principle hires an agency to represent their company.
c.
The difficulties that arise when a
principle hires an agent and cannot fully monitor the agent's actions.
d.
When a principle hires an agent
and must monitor every move they make, because they have found the agent to
be unethical.
Question
4
A particular security's default risk
premium is 3 percent. For all securities, the inflation risk premium is 1.75
percent and the real interest rate is 4.2 percent. The security's liquidity
risk premium is 0.35 percent and the maturity risk premium is 0.95 percent. The
security has no special covenants. What is the security's equilibrium rate of
return?
a.
8.50 percent.
b.
6.05 percent.
c.
10.25 percent.
d.
9.90 percent.
Question
5
Which of the following statements is
correct?
a.
An IPO is an example of a primary
market transaction.
b.
Money markets are subject to wider
price fluctuations and are therefore more risky than capital market
instruments.
c.
A direct transfer of funds is more
efficient than using financial institutions.
d.
The market segmentation theory
argues that different investors have different risk preferences, which
determine the shape of the yield curve.
Question
6
Which of the following transactions
in NOT a secondary market transaction?
a.
GE sells $30 million of new
preferred stock.
b.
Microsoft sells $2 million of IBM
preferred stock out of its marketable securities portfolio.
c.
The Magellan Fund buys $100
million of Apple previously issued bonds.
d.
Allstate Insurance Company. Sells
$5 million in IBM bonds.
Question
7
How are future values affected by
changes in interest rates?
a.
The lower the interest rate, the
larger the future value will be.
b.
The higher the interest rate, the
larger the future value will be.
c.
Future values are not affected by
changes in interest rates.
d.
One would need to know the present
value to determine the impact.
Question
8
Which of the following statements
about the future value of a dollar is true?
a.
A dollar paid (or received) in the
future is worth more than a dollar paid (or received) today.
b.
A dollar paid (or received) in the
future is worth as much as a dollar paid (or received) today.
c.
A dollar paid (or received) in the
future is worth less than a dollar paid (or received) today.
d.
A dollar paid (or received) in the
future is not comparable to a dollar paid (or received) today.
Question
9
Which of the
following statements about calculating the number of years needed to grow an
investment to a specific amount of money is true?
a.
The lower the interest rate, the
shorter the time period needed to achieve the growth.
b.
The higher the interest rate, the
shorter the time period needed to achieve the growth.
c.
The interest rate has nothing to
do with the length of the time period needed to achieve the growth.
d.
The Rule of 72 is the only way to
calculate the time period needed to achieve the growth.
Question
10
What is the correct term for level
sets of frequent, consistent cash flows?
a.
Loans.
b.
Budgets.
c.
Annuities.
d.
Bills.
Question
11
What does a loan amortization
schedule show?
a.
The principal balance paid per
period only.
b.
The interest paid per period only.
c.
Both the principal balance and
interest paid per period.
d.
The present value of the payments
due.
Question
12
Which bond sells for a price lower
than its par value?
a.
A discount bond.
b.
A premium bond.
c.
A junk bond.
d.
A municipal bond.
Question
13
Which bond makes no interest
payments?
a.
A bond whose coupon rate is equal
to the market interest rates.
b.
A bond whose coupon rate is
greater than the market interest rates.
c.
A bond whose coupon rate is less
than the market interest rates.
d.
A zero coupon bond.
Question
14
A 6-percent corporate coupon bond is
callable in 10 years for a call premium of one year of coupon payments. Assuming
a par value of $1,000, what is the price paid to the bondholder, if the issuer
calls the bond?
a.
$60
b.
$600
c.
$1000
d.
$1060
Question
15
As residual claimants, which
investors claim any cash flows to the firm that remain after the firm pays all
other claims?
a.
Creditors.
b.
Bondholders.
c.
Preferred stockholders.
d.
Common stockholders.
Question
16
What is the composition of the Dow
Jones Industrial Average?
a.
All stock listed on the New York
Stock Exchange.
b.
30 of the largest (market
capitalization) and most active companies in the U.S. economy.
c.
The 500 largest firms in their
respective economic sectors.
d.
Fortune Magazine's 500
largest-ranked firms.
Question
17
At your discount brokerage firm, it
costs $9.95 per stock trade. How much money do you need to buy 100 shares of
Ralph Lauren (RL), which trades at $85.13?
a.
$8,503.05.
b.
$8,503.00.
c.
$8,522.95.
d.
$9,508.00.
Question
18
Which of the following terms is
defined as the volatility of an investment, including firm-specific risk, as
well as market risk?
a.
Diversifiable risk.
b.
Market risk.
c.
Standard deviation.
d.
Total risk.
Question
19
What is the correct ranking for the
following stocks, highest to lowest, based on their total risk level?
Night Ryder has an average return of 15 percent and a
standard deviation of 35 percent.
WholeMart has an average return of 13 percent and a
standard deviation of 25 percent
Fruit Fly has an average return of 19 percent and a standard
deviation of 30 percent.
a.
(1) Fruit Fly, (2) Night Ryder,
(3) WholeMart
b.
(1) Night Ryder, (2) WholeMart,
(3) Fruit Fly
c.
(1) Night Ryder, (2) Fruit Fly,
(3) WholeMart
d.
(1) WholeMart, (2) Fruit Fly, (3)
Night Ryder
Question
20
An investor owns $10,000 of Adobe
Systems stock, $15,000 of Dow Chemical, and $25,000 of Office Depot. What are
the portfolio weights of each stock?
a.
Adobe Systems = 0.3333, Dow
Chemical = 0.3333, Office Depot = 0.3333.
b.
Adobe Systems = 0.2, Dow Chemical
= 0.3, Office Depot = 0.5.
c.
Adobe Systems = 0.3, Dow Chemical
= 0.2, Office Depot = 0.5.
d.
Adobe Systems = 0.2667, Dow
Chemical = 0.3333, Office Depot = 0.4.
Question
21
Which of the following returns is
the average of the possible returns weighted by the likelihood of those returns
occurring?
a.
Efficient return.
b.
Expected return.
c.
Market return.
d.
Required return.
Question
22
What is typically considered to be
the return on U.S. government bonds and bills and equals the real interest and
the expected inflation premium?
a.
Required return.
b.
Risk-free rate.
c.
Risk premium.
d.
Market risk premium.
Question
23
What is a measure of the sensitivity
of a stock or portfolio to market risk?
a.
Behavioral finance.
b.
Beta.
c.
Efficient market.
d.
Hedge.
Question
24
What is a capital budgeting
technique that generates a decision rule and associated metric for choosing
projects, based on the total discounted value of their cash flows?
a.
Payback.
b.
Net present value.
c.
Internal rate of return
d.
Profitability index.
Question
25
What is a capital budgeting
technique that generates decision rules and associated metrics for choosing
projects, based on the implicit, expected geometric average of a project's rate
of return?
a.
Discounted payback.
b.
Net present value.
c.
Internal rate of return.
d.
Profitability index.
St Petersburg College Workplace Change Message Discussion
Pretend that you are the CEO of Milliford Labs. While the company used to be known for its innovation, producing multiple ...
St Petersburg College Workplace Change Message Discussion
Pretend that you are the CEO of Milliford Labs. While the company used to be known for its innovation, producing multiple new products annually and owning a number of important utility patents, you're concerned because only a couple of new products were developed in the past year. As the CEO, you want to turn this around. You’re free to suggest whatever turn-around you want, and you can make up the details as you communicate an inspiring change speech to kick off the company retreat and outline a plan. Take into consideration the executive coach’s advice, and Duarte’s principles of spellbinding presentations. Use business writing (single-spaced, liberal use of headings, bullet points, and charts/graphs/graphics as appropriate). Length should be around 500 or so words.
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