All Tutorials will be E-mailed immediately (automatically) after the Payment and can also be Downloaded by clicking on Tutorial Bucket.
Please Check your Spam Email if you do not get the Tutorial.
Click Here to Submit New Syllabus (If course has changed or if you need help with any other course)
Shopping Cart
Your shopping cart is empty!
Categories
FIN 515 Week 3 Problem Set
$8.00

FIN 515 Week 3 Problem Set

This Tutorial was purchased 6 times & rated A by student like you.

 

This Tutorial contains following Attachments

  • FIN 515 Week 3 Problem Set.docx

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%. What does the IRR rule say about whether you should invest?

 

19.

You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5,000 and will be posted for one year. You expect that it will generate additional revenue of $500 per month. What is the payback period?

 

21.

You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $10 million. Investment A will generate $2 million per year (starting at the end of the first year) in perpetuity. Investment B will generate $1.5 million at the end of the first year and its revenues will grow at 2% per year for every year after that.

  • a. Which investment has the higher IRR?
  • b. Which investment has the higher NPV when the cost of capital is 7%?

c. In this case, for what values of the cost of capital does picking the higher IRR give the correct answer as to which investment is the best opportunity?

 

 

Chapter 8 (260–262)

1.

Pisa Pizza, a seller of frozen pizza, is considering introducing a healthier version of its pizza that will be low in cholesterol and contain no trans fats. The firm expects that sales of the new pizza will be $20 million per year. While many of these sales will be to new customers, Pisa Pizza estimates that 40% will come from customers who switch to the new, healthier pizza instead of buying the original version.

a.       Assume customers will spend the same amount on either version. What level of incremental sales is associated with introducing the new pizza?

 

b.      Suppose that 50% of the customers who will switch from Pisa Pizza’s original pizza to its healthier pizza will switch to another brand if Pisa Pizza does not introduce a healthier pizza. What level of incremental sales is associated with introducing the new pizza in this case?

 

6.

Cellular Access, Inc. is a cellular telephone service provider that reported net income of $250 million for the most recent fiscal year. The firm had depreciation expenses of $100 million, capital expenditures of $200 million, and no interest expenses. Working capital increased by $10 million. Calculate the free cash flow for Cellular Access for the most recent fiscal year.

 

12.

A bicycle manufacturer currently produces 300,000 units a year and expects output levels to remain steady in the future. It buys chains from an outside supplier at a price of $2 a chain. The plant manager believes that it would be cheaper to make these chains rather than buy them. Direct in-house production costs are estimated to be only $1.50 per chain. The necessary machinery would cost $250,000 and would be obsolete after 10 years. This investment could be depreciated to zero for tax purposes using a 10-year straight-line depreciation schedule. The plant manager estimates that the operation would require $50,000 of inventory and other working capital upfront (year 0), but argues that this sum can be ignored because it is recoverable at the end of the 10 years. Expected proceeds from scrapping the machinery after 10 years are $20,000.

If the company pays tax at a rate of 35% and the opportunity cost of capital is 15%, what is the net present value of the decision to produce the chains in-house instead of purchasing them from the supplier?

Write a review

Order Id


Order Id will be kept Confidential
Your Name:


Your Review:
Rating:   A   B   C   D   F  

Enter the code in the box below:



Related Tutorials
$8.00

This Tutorial was purchased 3 times & rated No rating by student like you.

Chapter 26 (page 903): 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? ..
$3.00

This Tutorial was purchased 3 times & rated A+ by student like you.

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 compan..
$3.00

This Tutorial was purchased 3 times & rated B+ by student like you.

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 a..
$15.00

This Tutorial was purchased 10 times & rated A by student like you.

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 ..
$8.00

This Tutorial was purchased 1 times & rated No rating by student like you.

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 struc..
$3.00

This Tutorial was purchased 3 times & rated B+ by student like you.

The Role of Financial Managers in Ethical Corporate Governance (graded) Does the financial manager have a greater responsibility or a lesser responsibility for maintaining ethical corporate governance? Why or why not? What is or will be your approach to ethical corporate governance now or in ..
$3.00

This Tutorial was purchased 1 times & rated No rating by student like you.

Examples of Real Agency Problems and How They Could Have Been Prevented (graded) Do some research and find some historical or current real life examples of agency problems. Will the measures discussed in the text help to prevent problems like your examples in the future? What else would you a..
$8.00

This Tutorial was purchased 3 times & rated A by student like you.

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 portf..
$8.00

This Tutorial was purchased 3 times & rated A+ by student like you.

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. a.       What was your realized return?   b.      How much o..
$3.00

This Tutorial was purchased 0 times & rated No rating by student like you.

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 pro..
$3.00

This Tutorial was purchased 2 times & rated B+ by student like you.

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. Calcu..
$8.00

This Tutorial was purchased 4 times & rated A by student like you.

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...
$15.00

This Tutorial was purchased 3 times & rated A+ by student like you.

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 pla..
$3.00

This Tutorial was purchased 0 times & rated No rating by student like you.

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. ..
$3.00

This Tutorial was purchased 3 times & rated A+ by student like you.

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 d..
$10.00

This Tutorial was purchased 12 times & rated A by student like you.

This Tutorial contains 3 Different Course Projects   First Course Project The 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 o..
$3.00

This Tutorial was purchased 0 times & rated No rating by student like you.

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, op..
$3.00

This Tutorial was purchased 2 times & rated A+ by student like you.

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 ca..
$8.00

This Tutorial was purchased 4 times & rated A by student like you.

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..
$7.00

This Tutorial was purchased 4 times & rated No rating by student like you.

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 ..
$3.00

This Tutorial was purchased 1 times & rated No rating by student like you.

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. •   &..
$8.00

This Tutorial was purchased 4 times & rated A by student like you.

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?     ..
$6.00

This Tutorial was purchased 2 times & rated A+ by student like you.

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 woul..
$7.00

This Tutorial was purchased 1 times & rated No rating by student like you.

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 o..
$3.00

This Tutorial was purchased 3 times & rated B+ by student like you.

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. Calc..
$3.00

This Tutorial was purchased 1 times & rated No rating by student like you.

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 m..
$15.00

This Tutorial was purchased 7 times & rated A by student like you.

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 ..
$15.00

This Tutorial was purchased 3 times & rated No rating by student like you.

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 ..
$15.00

This Tutorial was purchased 6 times & rated A+ by student like you.

1. (TCO A) In the United States, which of the following types of organization has the greatest revenue in total? (Points : 5) a. Sole proprietorship b. C corporation c. S corporation d. Limited partnership 1.1) Which of the following is not a step in the WACC valuation method? A) Co..
$25.00

This Tutorial was purchased 7 times & rated A by student like you.

This Tutorial contains Week 3 Course Project (3 Sets) Week  6 Course Project (2 Sets) ..
$40.00

This Tutorial was purchased 11 times & rated A+ by student like you.

FIN 515 Final Exam Set 1 FIN 515 Final Exam Set 2 FIN 515 Final Exam Set 3 ..
$26.00

This Tutorial was purchased 2 times & rated A+ by student like you.

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 Budge..
$90.00

This Tutorial was purchased 7 times & rated A by student like you.

  This tutorial doesnt 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 ..
$10.00

This Tutorial was purchased 5 times & rated B+ by student like you.

Question 1. 1. (TCO G) If Company A and Company B are in the same industry and use the same production method, and Company A’s asset turnover is higher than that of Company B, then all else equal we can conclude (Points : 10)   Question 2. 2. (TCO G) If Moon Corporation has an increa..
$10.00

This Tutorial was purchased 4 times & rated A by student like you.

Question 1.      Question :        (TCO G) If Company A and Company B are in the same industry and use the same production method, and Company A’s asset turnover is higher than that of Company B, then all else equal we can conclude &..
$20.00

This Tutorial was purchased 9 times & rated B+ by student like you.

Question included in these Midterms could be found on this link     FIN 515 Midterm Exam Set 1 (New) Link:http://www.fin515.com/product-73-FIN-515-Midterm-Exam-Set-1-(New)   FIN 515 Midterm Exam Set 2 (New) Link:http://www.fin515.com/product-72-FIN-515-M..
$10.00

This Tutorial was purchased 4 times & rated A by student like you.

Once again, your team is the key financial management team for your company. The company’s CEO is now looking to expand its operations by investing in new property, plant, and equipment. Your team recently calculated the WACC for your company, which will now be useful in evaluating the project’s ..
$10.00

This Tutorial was purchased 0 times & rated A+ by student like you.

Once again, your team is the key financial management team for your company. The company’s CEO is now looking to expand its operations by investing in new property, plant, and equipment. In order to effectively evaluate the project’s effectiveness, you have been asked to determine the firm’s weig..
$10.00

This Tutorial was purchased 4 times & rated A+ by student like you.

Continuing with your Week 2 Project, now your CEO after reviewing your earlier Week 2 PowerPoint submission has asked your team to complete an additional benchmark analysis task, before the upcoming Board Meeting. For this part of the project your team needs to do an analysis of the market and op..
$10.00

This Tutorial was purchased 5 times & rated A by student like you.

As the new financial manager of your company, the CEO has asked your team to provide a brief analysis of the company’s performance to present at the upcoming board of directors meeting. The CEO has asked that you assess the company’s performance against your company’s industry. Thus, to do this, ..
$25.00

This Tutorial was purchased 4 times & rated A by student like you.

FIN 515 Week 2 Project Financial Statement Analysis (Nike) FIN 515 Week 3 Project Financial Statement Analysis (Nike) FIN 515 Week 6 Project Calculating the Weighted Average Cost of Capital (Nike) FIN 515 Week 7 Project Capital Budgeting Analysis (Nike) ..
Tags:
FIN 515 © 2017 All Rights Reserved.Powered by:Ash Tutorial