FIN 540 – Homework Chapter 20  © 2013 Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University. FIN 540 Homework Chapter 20    Page 1 of 2   Directions: Answer the following five questions on a separate document. Explain how […]

Review the”Minimizing Risk” video segment below:   In the video segment, you will watch an interview with two great investors of the twentieth century.  Imagine you are Harry Reasoner, and you are allowed to ask Peter Lynch one question about market risk, discount rates, or the weighted average cost of capital (WACC). What question would you ask?  Why do you feel that is an important […]

Assume you are presented with the following mutually exclusive investments whose expected net cash flows are as follows: EXPECTED NET CASH FLOWS: Year Project A Project B 0 −$400 −$650 1 −528 210 2 −219 210 3 −150 210 4 1,100 210 5 820 210 6 990 210 7 −325 210 1. (a) What is each project’s IRR? (b) If each project’s cost of capital […]

A risky $400,000 investment is expected to generate the following cash flows: Year 1 2 3 4 $145,300 $175,445 $156,788 $145,000 A. If the firm’s cost of capital is 10 percent, should the investment be made? B. An alternative use for the $400,000 is a four-year U.S. Treasury bond that pays $28,000 annually and repays the $400,000 at maturity. Management believes that the cash inflows […]

By Tuesday, July 1, 2014 submit a 4-5 page report based on the following problem: Mary has been working for a university for almost 25 years and is now approaching retirement. She wants to address several financial issues before her retirement and has asked you to help her resolve the situations below. Her assignment to you is to provide a 4-5 page report, addressing each of the following […]

Corporations often use different costs of capital for different operating divisions. Using an example, calculate the weighted cost of capital (WACC). What are some potential issues in using varying techniques for cost of capital for different divisions? If the overall company weighted average cost of capital (WACC) were used as the hurdle rate for all divisions, would more conservative or riskier divisions get a greater […]

Galaxy International is a small privately held company in the Northeast U.S. which manufactures high- tech carbon composite skis for the U.S. market. The company has been in business for 20 years, has 125 employees, and has $50 million in annual sales. Its owner, Jeremy Riven, is an ex-Olympic skier who developed the proprietary technology and bonding polymers that give Galaxy skis their unique flexibility, […]

1. Financial Forecasting. Small Motors Inc, which is currently operating at full capacity, has sales of $29,000, current assets of $1,600, current liabilities of $1,200, net fixed assets of $27,500, and a 5 percent profit margin. The firm has no long-term debt and does not plan on acquiring any. The firm does not pay any dividends. Sales are expected to increase by 4.5 percent next year. […]

Your assignment is to create a 5-page argumentative/persuasive research paper given one of the following options: Option 1. Argue for or against an established theory involving Mergers and Acquisitions or Financial Ratio Analysis. Option 2. Argue for or against your own theory involving Mergers and Acquisitions or Financial Ratio Analysis. Option 3. Argue for or against a business decision, organizational plan, business philosophy, policy decision, […]

Ratio Analysis                                                        Compute the ratios below for Blue Bill Corporation based on the financial statements provided. Ending inventory was $1,237.6 for year 2010.                            After calculating the various ratios, analyze the overall financial health of Blue Bill Corporation.                            Values presented on […]