... MANAGEMENT DEVELOPMENT INSTITUTE OF SINGAPORE IN TASHKENT (MDIST) ASSIGNMENT SUBMISSION COVER SHEET Course : Year 2 Module : Corporate Finance Lecturer : ShavkatMamatov Assignment Type : Group Due Date : 24.03.12 S/N | Student Name (As reflected in Passport) | ID Number | Student Signature | 1 | | | | 2 | | | | 3 | | | | 4 | | | | Submitted on Due Date (Yes/No) : Yes MDIS Tashkent Chilonzor district, 28, Bunyodkor Ave., Chilanzar district, Tashkent 100185, Uzbekistan MEMO Date: March 03, 2012 To: All Investment Club Members From: Board of Directors Personnel Dept. MDIS Building, Office 427 Ext. 3875 cf@mdis.uz Subject: Analysis and Recommendations for Investment Club Members The objective of the following memorandum is to find out the best proprtion of investment in two asset portfolio and give recommendations based on the calculated outcomes. To begin with, we have gathered the following information pertaining to two companies of your club’s interest. Company Name | Return | Risk | Registon Co | 15.4% | 8.87% | Sharq Co | 14.0% | 4.9% | From the above return and risk information, our investment club has also came out with three potential portfolios of how much to invest in Registon Co and Sharq Co. This is shown below: Portfolio | Proportion of fund invested in | | Registon Co | Sharq Co | A | 0.80 | 0.20 | B | 0.50 | 0.50 | C | 0.25 | 0.75 | Based on the information provided above......
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...INTERNATIONAL FINANCE ASSIGNMENT Question Because of a recent ban on the import of U.S. made tennis rackets to Germany (in retaliation for anticipated restrictions on the import of German-made goods to the U.S.), a U.S. sporting goods manufacturer expects to create a German subsidiary to manufacture and distribute tennis rackets in Germany. The project life is expected to be two years (at which time, an end to protectionist sentiment in the U.S. will lead to an end to trade restrictions). The required investment in the project is a. DM 25,000,000 in plant and equipment, b. DM 5,000,000 in working capital. The projected after-tax cash flows from the project are DM 20,000,000 for the next two years, in addition to DM5,000,000 from the liquidation of working capital in two years. The spot exchange rate (S$/DM) is $0.6500/DM1 . The interest rate in the U.S. (RUS ) is 6 percent per year while the German interest rate (RDM ) 11 percent per year. Assuming that the firm has a WACC of 12%, showing all calculations indicate whether the project should be accepted. Solution Predicted Exchange Rates If the real rate of interest is the same in all countries (due to the international mobility of capital) the International Fisher Effect implies that differences in nominal interest rates will signal differences in the expected rates of inflation across countries. Given that RUS is 6 percent per year and that the German interest rate RDM is 11 percent...
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...Assignment 1 1. How has the composition of federal, state, and local government spending changed over the past 40 years? What social and economic factors might have contributed to this change in how governments spend their funds? In the 1960’s 49.5% of federal spending was on national defense. The shift from then until 2007 was mostly comprised of decreasing spending on national defense and an increase on spending of healthcare from 2.9% to 24.9%, also an increase of social security spending from 13.4% to 20.3%. Which is a very large increase in healthcare spending, almost a 100% increase from the year 1960 to 2007; also a very large increase in social security spending. Social security spending is the largest portion of government spending. At the state and local levels most of the spending has remained relatively the same. The only exception is healthcare spending, which has more than doubled from 1960 to 2007. Health spending at state and local levels went from 8.2% to 20.7%. The increases in social security and healthcare costs could be attributed to the aging baby boomer population (approximated at 75 million people). This large portion of the US population has had increasing social security needs and increasing healthcare needs. The decrease in national defense could be attributed to several different things including globalization, diminishing international trade laws, the break up of the Soviet Union...
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...Andrew Wolford BYS330 Principles of Finance Week Four Assignment March 4th, 2014 Chapter Ten Study Problem 10-4: (Payback period, NPV, PI, and IRR calculations) You are considering a project with an initial cash outlay of $80,000.00 and expected free cash flows of $20,000.00 at the end of each year for 6 years. The required rate of return for this project is 10 percent. a. What is the project’s payback period? Remember first that payback period is the number of years needed to recover the initial cash outlay related to an investment as is determined by the number of years just prior to complete payback + the unplaid-back amount at beginning of yearfree cash flow in year payback is completed. Here, simply enough, you just have to take the initial cash outlay of $80,000.00 divided by the incremental cash flow of $20,000.00. So, the payback period is 4 years. b. What is the project’s NPV? First, NPV or net present value is the present value of an investment’s annual free cash flow less the investment’s initial outlay. Present Value ______________________________________________________________________________ Free cash x Factor at 10 percent = Present Value ______________________________________________________________________________ Inflow year 1 $20,000.00 x 11+0...
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...Assignment 1 Economics for Management – GSB728 Due on: 07/06/2010 University of New England Victor M. Ayala Lancheros Student # 220070594 Word Count: 1,152 Economics for Management – GSB728 PART 1 Question # 1 Demand for Bus Services: D1 = 3,500 – 350P1 + 25P2 + 2Y Supply for Bus Services: S1 = 100P1 The market equilibrium point is obtained where S1 = D1 therefore, 100P1 = 3,500 – 350P1 + 25P2 + 2Y Substituting for Price of Taxi trips (P2 = $1,000) and Income (Y=$50,000), then: 450P1 = 3,500 + 25(1,000) + 2(50,000) P1= $285.55 per Bus Trip (Equilibrium Price). Question # 2 In order to find the equilibrium quantity, the Price per Bus Trip obtained above (P1 = $285.55) is plugged into either the Demand (D1) or Supply (S1) equations so that: D1 = 3,500 – 350P1 + 25P2 + 2Y D1 = 3,500 – 350(285.55) + 25(1,000) + 2(50,000) D1 = 28,555 Bus Trips per year (Equilibrium Quantity). Or Alternatively: S1 = 100P1 S1 = 100(285.55) = 28,555 Bus Trips per Year (Equilibrium Quantity). To illustrate the results in questions 1 and 2, a schedule for the Supply (S1) and Demand (D1) functions is provided below. As shown on the Assignment 1 Page 2 of 9 Economics for Management – GSB728 schedule, the market equilibrium is reached where supply and demand intersect and the market clears. P1 (Dollars per Trip) D1 (Trips per Year) S1 (Trips per year) 0 128,500 0 50 111,000 5,000 100 93,500 10,000 150 76,000 15,000 200 58,500 20,000 250 41,000 25,000 285.55 28,555 28,555 300 23,500 30,000......
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... JWI 530: Financial Management I Academic Submissions and Evaluations Assignment 2: Management Accounting Application Due Week 10, Day 7 (Weight: 22.5%) In this assignment you will demonstrate your understanding of capital investment techniques by evaluating the following three case studies. The homework answers and all this homework help was offered at and you should not submit or make it your own. We provide homework answers at http://allhomeworktutors.com/ and the work may have already be submitted for marking. Case Analysis 1 – Weight 20% of total assignment You work for a small, local telecommunications company. In five years, the company plans to undertake a major upgrade to its servers and other IT infrastructure. Management estimates that it will need up to $450,000 to cover all related costs; however, as a fairly young company, the goal is to pay for the upgrade with cash and not to take out loans. Right now, you have $300,000 in a bank account established for Capital Investments. This account pays 6% interest, compounded annually. A member of the finance department has approached you with an investment opportunity for the $300,000 that covers a five-year period and has the following projected after-tax cash flows: |Year |Projected Cash | | |Flow | | | | |1 |$94,000 | | ...
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...| | | Assignment 2 Instructions Save the file in your course folder, and name it with Assignment, the section number, and your first initial and last name. For example, Jessie Robinson's assignment 1R for Section 1 would be named Assignment1JRobinson. Type the answers to the assignment's questions. Use complete sentences unless the question says otherwise. You will have more than one day to complete an assignment. At the end of each day, be sure to save your progress. Review Lesson 4 of the Course Overview for instructions about turning in your assignments. Assignment 2: Financial Planning (25.0 points) 1. Describe one short-term goal that you have and at least one thing you will need to do in order to accomplish that goal. (2-4 sentences. 1.0 points) I have a short term goal of getting a job and in order to do that I will first have to catch up in school. Then, go job hunting at local restaurants and facility’s where teenagers can work. 2. Describe one long-term goal that you have and at least two things you will need to do in order to accomplish that goal. (2-4 sentences. 1.0 points) One of my long term goals is to go to college and I will accomplish this by getting good grades and also working hard in track, so it that I could get as much financial as possible. I would also apply for...
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...| | ACCT11 FINANCE AND ACCOUNTING ASSIGNMENT | | | | | | | Lorem | | | QUESTION #1 ANSWER: A.) The variable costs per unit are as follows: * Wages - $3500 * Tinting – 500 x $4.00 per sq. ft. x $3.00= $6000 * Total Variable Costs= $9500 * Variable Costs Per Unit= $9500/500 units= $19 per unit The total fixed costs are as follow: * Rent - $3000 * Amortization - $5000 * Total Fixed Cost= $8000 B.) The break-even point in number of windows to be tinted is shown below using a spreadsheet calculation: BREAK EVEN POINT CALCULATION | IN UNITS | FIXED COSTS | | PRICE PER UNIT SOLD -VARIABLE COST PER UNIT | | | | THE NUMBERS: | $8,000.00 | | $35.00 | - $19.00 | | | | BREAK EVEN POINT: | 500 | | Therefore, 500 windows would have to be sold to make the break-even point. C.) Number of windows to be tinted to earn an income of $14,000: FORMULA: | FORMULA EXPLAINED: | 16x-8000=1400016x=22000x= 1375 | (contribution margin times X number of units, less $8000 fixed costs = $14,000 income) | | Checking my numbers: | | $8,000 | fixed | | $26,125 | $19 each variable * 1375 units) | | $34,125 | total costs | | $48,125 | net sales for 1375 units sold at $35 | | $14,000 | net sales less fixed and variable costs | Therefore, the total number of windows to be tinted can be expressed as x= 1375, or 1375 windows would need to be tinted to earn an......
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...money needed is attractive because they can continue to strike into new sources of money over time. The goal of the markets is to increase investor confidence by participation that is more active. The markets require a free flow of information to run smoothly and efficiently and the internet can be used for up-to-the minute trade information. Money Market is an integral part of the financial market of a country. It provides a medium for the redistribution of short term loan able funds among financial institutions, which perform this function by selling deposits of various types, certificate of deposits and discounting of bills, treasury bills etc. The participants in the money market are the central bank, commercial banks, the government, finance companies, contractual saving institutions like the pension funds, insurance companies, savings and loan associations etc. The instruments that are generally traded in the money market constitute treasury bills, short-term central bank and government bonds, negotiable certificates of deposits, bankers’ acceptances and commercial papers like the bills of exchange and promissory notes, mutual funds etc. The money market in Bangladesh is in its transitional stage. The various constituent parts of it are in the process of formation, while continuous efforts are being made to develop appropriate and adequate instruments to be traded in the market. At present, government treasury bills of varying maturity, Bangladesh Bank Bills and......
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...ASSIGNMENT 1: DUE SEPTEMBER 23, 2014 Problem 1 (a) “The fact that firms so heavily rely on their internal capital market as a source of financing is strong evidence that internal markets are more efficient than external markets.” ANSWER Although internal capital is preferable to external capital based on the reasons below: * According to the pecking order theory (Myers, 1984; Myers & Majluf, 1984), firms follow a hierarchical financing pattern. Thus, firms would prefer internal funds (retained earnings) to external funds because: * External capital would result in higher cost of capital, due to direct costs such as underwriters’ fees and indirect costs such as under-pricing. * Using internal capital is much easier for managers because the cost of capital is lower and investment decisions do not need to be scrutinised by investors. * Reliance on internal capital/funds is the cheaper source of financing. However, it does not indicate that external markets are less efficient than internal markets in any way. (b) “The stock price of a company paying out a regular dividend can be expected to fall on the payment date, not on the record date or the ex-dividend date.” This statement is false. Investors begin to trade their shares on the ex-dividend date after a company has declared its dividend policy, and this is when the stock price of a company can be expected to change or fall. Thus, stock prices fall on the ex-dividend dates to......
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...Finance 260 Assignment 2 To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/finance-260-assignment-2/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com Finance 260 Assignment 2 1. First City Bank pays 7% simple interest on its savings account balances, whereas Second City Bank pays 7% compounded annually. If you made a $6,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 9 years? 2. At 6.5 percent interest, how long does it take to quadruple your money? 3. You are scheduled to receive $15,000in two years. When you receive it, you will invest it for six more years at 7.1 percent per year. How much will you have in eight years? 4. Investment X offers to pay you $5,200 per year for eight years, whereas investment Y offers to pay you $7,300 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5 percent? 5. First National Bank charges 13.2 percent compounded monthly on its business loans. First United Bank charges 13.5 percent compounded semiannually. As a potential borrower, which bank would you go to for a new loan? 6. You want to have $75,000 in your savings account 12 years from now, and you are prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.8 percent interest, what amount must you deposit......
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...Finance 260 Assignment 2 To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/finance-260-assignment-2/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com Finance 260 Assignment 2 1. First City Bank pays 7% simple interest on its savings account balances, whereas Second City Bank pays 7% compounded annually. If you made a $6,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 9 years? 2. At 6.5 percent interest, how long does it take to quadruple your money? 3. You are scheduled to receive $15,000in two years. When you receive it, you will invest it for six more years at 7.1 percent per year. How much will you have in eight years? 4. Investment X offers to pay you $5,200 per year for eight years, whereas investment Y offers to pay you $7,300 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5 percent? 5. First National Bank charges 13.2 percent compounded monthly on its business loans. First United Bank charges 13.5 percent compounded semiannually. As a potential borrower, which bank would you go to for a new loan? 6. You want to have $75,000 in your savings account 12 years from now, and you are prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.8 percent interest, what amount must you deposit......
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...Finance 260 Assignment 2 To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/finance-260-assignment-2/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com Finance 260 Assignment 2 1. First City Bank pays 7% simple interest on its savings account balances, whereas Second City Bank pays 7% compounded annually. If you made a $6,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 9 years? 2. At 6.5 percent interest, how long does it take to quadruple your money? 3. You are scheduled to receive $15,000in two years. When you receive it, you will invest it for six more years at 7.1 percent per year. How much will you have in eight years? 4. Investment X offers to pay you $5,200 per year for eight years, whereas investment Y offers to pay you $7,300 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5 percent? 5. First National Bank charges 13.2 percent compounded monthly on its business loans. First United Bank charges 13.5 percent compounded semiannually. As a potential borrower, which bank would you go to for a new loan? 6. You want to have $75,000 in your savings account 12 years from now, and you are prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.8 percent interest, what amount must you deposit......
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...Subject Code Subject Name Assessment Type Due Date Submitted via ACC 201 Finance Group Assignment (maximum 3 students) Friday of Week 11 before mid-night 1st June 2012 Email shagunkhemka@hotmail.com Weight 30% of the total assessment You are required to ANSWER THE FOLLOWING QUESTION. The assignment must be typed, and you must attach a cover sheet duly signed and dated. Students are encouraged to use excel spreadsheets for their calculations. Students are reminded to follow the Plagiarism Guidelines, and any suspicious assignments would be further investigated. The lecturer will discuss the plagiarism guidelines during the semester. If the students need any assistance with regards to referencing, or understanding plagiarism, they should contact the lecturer directly. Any queries regarding this assessment task should be directed towards your lecturer. Page 1 of 3 One year ago, your company purchased a machine for $210,000. You have learned that a new machine is available that offers many advantages; you can purchase this new machine for $260,000 today. It will be depreciated on a straight-line basis over ten years and has a salvage value of $10,000. You can expect that this new machine will produce a gross margin (revenue minus operating expenses other than depreciation) of $40,000 in the first year and this is expected to grow by $5,000 for the first 4 years (until the end of year 5) after which is expected to remain the same. The current machine is......
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...JOURNAL OF ECONOMICS AND FINANCE EDUCATION Volume 9 Number 2 Winter 2010 29 Using Microsoft Corporation to Demonstrate the Optimal Capital Structure Trade-off Theory John C. Gardner, Carl B. McGowan Jr., and Susan E. Moeller1 ABSTRACT In this paper, we apply the trade-off theory of capital structure to Microsoft. We use data for bond ratings, bond risk premiums, and levered CAPM betas to compute the cost of equity and the weighted average cost of capital for Microsoft at different debt levels. This study shows the impact of increasing financial leverage on WACC. As financial leverage increases, the WACC decreases until the optimal debt ratio is reached, after which, the WACC begins to rise. At this debt ratio, the value of Microsoft will be maximized. Our results indicate the optimal debt ratio for Microsoft is 37.5 percent. Introduction One of the most difficult concepts for finance students to learn and for faculty to teach is how a firm determines its optimal capital structure. While most corporate finance textbooks stress the importance of maximizing the value of the firm by minimizing its opportunity cost of capital, how a firm can actually achieve the appropriate debt–to–capital ratio is often a mystery. Brigham and Ehrhardt (2008) in Financial Management: Theory and Practice outline a framework that can be used by financial practitioners to determine a firm’s optimal capital structure. Modigliani and Miller (1958 and 1963) provide the basis for the......
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