HW #3: For Tuesday, Feb 8th …
If you encounter financial terms with which you are not familiar, the Glossary provided on the Yahoo! Finance website at http://biz.yahoo.com/f/g/ may be of help. 1. Read Sections 5.6 through 5.10 in Chapter 5 – Evaluating a Single Project and Sections 13.1 through 13.4 in Chapter 13 – The Capital Budgeting Process from the course textbook. Note, as mentioned in class, the error in the definition of “EBIT” on page 552 in Chapter 13 which should read “Earnings Before Interest and Taxes.” Also, in Example 13-3 at the bottom of page 556, leverage, λ, is erroneously called the “debt-equity ratio” whereas it should be called the “debt fraction” or the “debt-to-capital” ratio. 2. Answer Questions 5-12, 5-14, 5-16, 5-17, 5-46, 5-47 and 5-54 found at the end of Chapter 5. Write up your answers, showing all work, neatly and concisely on 8.5 x 11 inch paper. Be sure your name appears at the top of each page and staple multiple pages together. Submit your answers at the beginning of class. Late submittals will not be accepted. All work is to be your own, consistent with the University Honor Council’s Guide to Academic Integrity. 3. Read “Assessing a Company’s Future Financial Health” (HBS 9-911-412) handed out in class and then complete the financial analysis of SciTronics by filling in the blanks on pages 6 through 10. Then complete The Case of the Unidentified Industries on pages 10 and 11. Explain your choices in The Case of the Unidentified Industries in a one-page typed essay and submit it, with the booklet, in class. Be sure to write your name on the cover of the booklet and on the top of the essay. Be prepared to discuss your analysis in class. Everyone is expected to submit his or her own work, consistent with the University Honor Council’s Guide to Academic Integrity.