not be submitted for marking. Answer the ONE compulsory question in Section A on pages 2 to 5. The question requirements are on page 5, which is detachable for ease of reference. Answer TWO of the four questions in Section B on pages 8 to 15. Maths Tables and Formulae are provided on pages 17 to 21. These pages are detachable for ease of reference. The list of verbs as published in the syllabus is given for reference on the inside back cover of this question paper. Write your candidate number, the
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Supplement of Formulae and Present Value Tables Formulae 1. CAPITAL STRUCTURE a) After-Tax Marginal Cost of Debt: kb = k(1− T) or where b) (1− T)I F k = interest rate; T = corporate tax rate; I = annual interest payment on debt; F = face value of debt Cost of Preferred Shares: kp = Dp NPp where c) Dp = stated annual dividend payment on shares; NPp = net proceeds on preferred share issue Cost of Common Equity: i) Cost of Common Shares (Capitalization of Dividends with Constant
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Capital Budgeting Assignment 2 Ebony N. Robinson FIN 534: Financial Management January 30, 2011 Professor: Dr. Glenn L. Stevens Strayer University Abstract The Net Present Value rule states that when making an investment decision, choose the project with the highest NPV. If the objective is to maximize wealth, then “the NPV rule always gives the correct answer (Berk and DeMarzo, 2011).” According to the text, we use the NPV rule to evaluate capital
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Introduction The time value of money concept is fundamental to the analysis of cash inflow and outflow decisions covering periods of over one year. Additionally, the concept of time value of money is important to financial decision-making because it emphasizes earning a return on invested capital, recognizes that earning a return makes $1 worth more today than $1 received in the future and it can be applied to future cash flows in order to compare different streams of income. A dollar to be paid
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Chapter 6 Time Value of Money LEARNING OBJECTIVES After reading this chapter, students should be able to: • Convert time value of money (TVM) problems from words to time lines. • Explain the relationship between compounding and discounting, between future and present value. • Calculate the future value of some beginning amount, and find the present value of a single payment to be received in the future. • Solve for time or interest rate, given the other three
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20/09/2011 4.1 The Timeline Chapter 4 The Time Value of Money • A timeline is a linear representation of the timing of potential cash flows. • Drawing a timeline of the cash flows will help you visualize the financial problem. Copyright © 2011 Pearson Education. All rights reserved. Copyright © 2011 Pearson Education. All rights reserved. 4-2 4.1 The Timeline (cont’d) • Assume that you made a loan to a friend. You will be repaid in two payments, one at the end of each year over the
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© Nikada/iStockphoto.com Chapter 28 Time Value of Money © Cengage Learning. All rights reserved. No distribution allowed without express authorization. In Chapter 1, we saw that the primary objective of financial management is to maximize the intrinsic value of a firm’s stock. We also saw that stock values depend on the timing of the cash flows investors expect from an investment—a dollar expected sooner is worth more than a dollar expected further in the future. Therefore, it is essential
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Chapter 1 Multiple Choice Questions 1. This book is mainly about A) financial decisions made by households B) financial decisions made by corporations C) financial decisions made by governments D) none of the above Answer: B Type: Easy Page: 3 2. Finance, generally, deals with A) money B) markets C) people D) all of the above Answer: D Type:
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Name: THINH QUANG LE Date: 06/10/2015 Final Exam Answer Chapter 1 1. Financial management is the subset of management that focuses on generating financial information that can be used to improve decision making. 2. For profit organizations, the goal of proprietary is making profit (maximizing revenue). 3. Accounting is a system for keeping track of the financial status of an organization and the financial results of its activities. 4. Finance is a field that focuses on the alternative
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Management controls are about influencing human behavior Result control (USA) Check results to make sure that employees make right results Performance measurement: * Financial * Non-financial Incentives: * Extrinsic * Intrinsic Elements of result controls * Empowerment & decentralization * Performance indicators & targets * Consequences of own actions and decisions * Rewards * Manu organizational levels: alignment Conditions for effective results controls:
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