...Elliott Slater BUSN 5200 Week 1 Homework Assignment 8/25/2013 1. The field of finance is basically deciding what to do with the money you have, and the field of accounting deals with figuring out how much money you have. 2. The two departments that the finance function is divided into are treasurer and controller. The treasurer’s office is responsible for managing the firm’s cash and credit, its financial planning, and its capital expenditures. The controller’s office handles cost and financial accounting, tax payments, and management information systems. 3. The three forms of business generally encountered in the US is sole proprietorship where one person owns everything, partnership where two or more people jointly own everything, and corporation where owners may be any number of people who all own shares of the business/stock. 4. The basic goal of a business is to maximize the wealth of the owners/stockholders. 5. Wealth is what each of the owners possesses as a result of being an owner, and it is stated on a piece of paper in the “share of stock” that gives the owner the right or claim to receive money from the corporation. 6. The three main factors that affect the market price of a corporation’s stock is expected EPS which is the profits per share, timing of cash flows, and risk which is the possibility of not getting expected cash flows or of having to pay them to someone else. 7. Saying that the basic financial goal of a business is to...
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...BUSN 5200 Homework Assignment for Week 6: 1. Why do we say money has time value? When speaking of time value of money, it refers to the fact that money to be received or paid at different times is worth different amounts as time moves forward. 2. Why is it important for business managers to be familiar with time value of money concepts? This is important for managers to understand because they are expected to maximize the value of todays and all future dollars. Understanding money has a different value at different times will help them make better decisions for future business. 3. Define Present Value. Present value tells us what future money would be worth if we had that money today. 4. Define Future Value. Future value is the value of the item or cash at a specific time/date in the future. 5. What are present value and future value interest factors? (as in PVIF and FVIF) - PVIF is the factor that can be used to make calculations for finding the present value of a series of values. PVIF = FV (1/(1+r)t ) - FVIF is used to calculate the future value of an amount per dollar of its present value with considerations of interest. FVIF = PV ( (1+r)n – 1 / r) 6. (calculating future value) You buy a 6 year, 8% CD for $1,000. Interest is compounded annually. How much is it worth at maturity? r = .08 n = 6 PV = 1,000 FV = $1,586.87*** 7. (calculating present value) What's the present value of $1,000...
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...cial information contained in financial statements and reports. Line managers must be able to understand financial information contained in financial statements and reports in order to evaluate their unit's financial performance, to communicate clearly with other managers, and to apply financial information when making decisions. Human resources management professionals must understand financial statements and principles if they are to effectively assist line managers and be strategic partners with other business functions. This course will focus on the interpretation and use of basic financial information by nonfinancial managers, not on the production of financial statements and reports. (FINC 5000 cannot be substituted for BUSN 5200.) Requisites None OBJECTIVES OUTCOMES Outcome Expectation Students have a basic familiarity with the field of finance and an understanding of the financial goal of a business, and they have an appreciation for the ethical considerations inherent in financial management. Students can explain the broad structure of the financial field, how the finance department functions in a typical organization and they can define the financial goal of all business firms, differentiating between wealth and profit maximization. Also, students can give illustrations of the...
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...BUSN 5200 Homework Assignment for Week 1: 1. Describe the field of finance. How is it different from the field of accounting? Finance is a multifaceted field that relates to many aspects of life and business and it is beneficial to understand its impact. Knowing how finance works in different areas is crucial in budgeting investing and making your assets go far. In the text, Finance consists of three areas; corporate finance, investments and financial institutions. Corporate finance ( synonymous with business finance). Investments, which consist of financial assets like stocks, bonds; in this field you deal a lot with stock brokers as well as security or financial analysts. Financial institutions which are most commonly banks, insurance agencies, etc. and deal with financial transactions. There is a fourth element which the former three categories fall under which is international finance; however, is overseas and expands the definition of finance. Accounting vs Finance. Accountants should possess at least a general knowledge and more depending on their occupation because Finance and Accounting should go hand in hand, meaning one cannot exist without the other. In areas of corporate finance it is required to have accounting experience or education because many accounting principles use finance in its business decisions and duties. Additionally, as finance grows and changes it affects accounting practices, i.e. financial statements. Furthermore, cost accounting...
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