PART 1 Introduction to Managerial Finance CHAPTERS IN THIS PART 1 2 3 The Role and Environment of Managerial Finance Financial Statements and Analysis Cash Flow and Financial Planning INTEGRATIVE CASE 1: TRACK SOFTWARE, INC. CHAPTER 1 The Role and Environment of Managerial Finance INSTRUCTOR’S RESOURCES Overview This chapter introduces the student to the field of finance and explores career opportunities in both financial services and managerial finance. The three basic legal forms of business
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decision is taken to enter a new manufacturing company, and current organization in that industry could be bought, or a new organization be started from the beginning (Van Horne, & Wachowicz, 2008). 5 How financial objective can be different in case of non for profit organization. 5 The financial objectives of the not-for-profit organization must agree with the objective of the organization and financial constraints. For example, if the not-for-profit organization is particularly pleased to
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CHAPTER 2 Present Values, The Objectives of the Firm, and Corporate Governance Answers to Practice Questions 1. The face value of the treasury security is $1,000. If this security earns 5%, then in one year we will receive $1,050. Thus: NPV = C0 + [C1/(1 + r)] = −$1000 + ($1050/1.05) = 0 This is not a surprising result because 5 percent is the opportunity cost of capital, i.e., 5 percent is the return available in the capital market. If any investment earns a rate of return equal to the opportunity
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Lockheed Martin – The Cost of Equity Tyrone Harris TUI University Introduction I will discuss the cost of equity of Lock Heed Martin and its comparison with other companies within the industry. Discussion Capital Asset Pricing Model (CAPM) The assumptions that have been taken to calculate the cost of equity of the Lockheed Martin is: The Capital Asset Pricing Model is selected to compute the cost of capital. The risk free rate is assumed as the
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Typical business-case topics include: •Executive Summary •Business Opportunity •Alternatives •Benefits •Costs •Financial Analysis •Assumptions •Constraints •Market Analysis •Organizational Considerations •Sensitivity Analysis •Project Description •Implementation Plan •Recommendations The executive summary highlights the key points in the business case. These include important benefits and the return on investment. The business opportunity describes the motivation
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analytical review include: Actual financial results compared to budgeted or projected figures compiled before that accounting period. How do actual results compare to management estimates before the accounting period? 9. What do the statements of cash flows and changes in equity indicate regarding the strengths and weaknesses of each company’s financial performance and position? The below financial statements provide information on the financial activities of Virgin and Qantas. Much like the performance
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as you buy it you own. A company will also reflect on the concept of tax. If the asset is worth a lot of money then acquisition of this asset will have ramifications on taxable income. If you purchase the asset for instance then there will be less cash in the business therefore less taxable income at the end of the year whereas on the other hand if the asset is leased on an operating lease basis then the company will make payments, considered rental expenses, much less than the purchase price which
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earnings per share); a 12.6% growth from the previous year. Operating cash flow; while lower than 2000 and 2001 has shown a modest increase since 2002 and continues to be positive due to the company’s variable cost structure. This is in-part is due to more efficient working capital investments and “other” adjustments to income, awarding the company a 10% increase in net cash flow year-over-year. Linear Technology has increased its cash holdings to excess of $1.5 billion through employing cost savings
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Introduction While United States Generally Accepted Accounting Principles (U.S. GAAP) are required throughout the United States, other countries utilize other methods of classifying their financial statement items. While the standards of accounting differ among many countries, there has recently been an effort to attain a universal set of standards under International Financial Reporting Standards (IFRS). While this has not yet been achieved, multiple countries have made an effort to converge
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(a) | (b) | Account Name | Statement | Type of Account | Accounts payable | BS | CL | Accounts receivable | BS | CA | Accruals | BS | CL | Accumulated depreciation | BS | FA* | Administrative expense | IS | E | Buildings | BS | FA | Cash | BS | CA | Common stock (at par) | BS | SE | Cost of goods sold | IS | E | Depreciation | IS | E | Equipment | BS | FA | General expense | IS | E | Interest expense | IS | E | Inventories | BS | CA | Land | BS | FA | Long-term debt
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