written reports will be accepted. Each group will hand in only one typed assignment. The assignments should be between four and eight pages in standard formatting. For the cases, you should try to put yourself in the shoes of the case participants at the time of the case and you must take a position regarding the problem in the case and make a specific recommendation on how to solve it. Support your recommendation as succinctly and as effectively as you can. The case questions given below are designed to
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case projections for a potential acquisition of Mercury Athletic, we have concluded that this is a positive net present value project, and that AGI should proceed with the acquisition. Under Mr. Liedtkes operating assumptions, we calculate the value of Mercurys discounted cash flows to be $624.446 million, and the acquisition price to be $156.643 million, yielding a net present value of $467,804 for AGI. Our calculations indicate that this project becomes even more attractive financially when potential
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semi-annually. At the end of the distribution period the account balance will equal zero. Note that the first deposit will be made at the end of year 1 and the first distribution payment will be received at the end of year 21. Required: a) Draw a time line depicting all of the cash flows associated with Melanie Inc.’s view of the retirement annuity. [2 marks] b) How large a sum must Melanie Inc. accumulate by the end of year 21 to provide the 30-year, $60,000 annuity? [3 marks] c) How large
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Lifetime Value Lifetime value (LTV) is calculated initially for groups (segments) of customers. Once determined, it can be attributed back to individual members of the group. To understand LTV, let’s look at a typical lifetime value table calculated for a group of 50,000 bank customers who have the same credit card performance as that shown by the previous example. Year 1 6.0% Year 2 8.0% 3,000 Year 3 10.0% 3,240 a Referral Rate b Referred Customers c Retention 75.0% 80.0% 85.0% Rate d Retained
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Exercises due Oct 1 The classic transportation problem. You as an employee of the Department of Homeland Security (DHS) are in charge of maintaining the readiness of emergency supplies at various distribution sites within a region that may be subjected to natural or human caused disasters. These supplies come from manufacturers located at other sites within a larger region. These supplies need replacing periodically, whether used or not. The problem you face each month is to determine how much of
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RMIT FINAL EXAMINATION FACULTY OF BUSINESS SCHOOL OF ECONOMICS AND FINANCE BAFI-1100 FINANCIAL DECISION MAKING FIRST SEMESTER 2004 DATE: TIME: INSTRUCTIONS: 1. This is a CLOSED BOOK EXAMINATION 2. The examination represents 60% of the assessment in this subject. 3. All answers are to be made on the examination paper. 4. All questions should be attempted; there is no choice between questions 5. The use of a calculator is permitted, however
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75% *The nominal interest rate cannot be negative; no one will invest at a negative rate. CHAPTER 2 4. The Treasury announces an auction of $10 billion par value of 52-week Treasury bills. $2 billion of noncompetitive bids are received. The competitive bids are as follows: Price per $1 of par Par value 0.9200 $3 billion 0.9194 $3 billion 0.9188 $4 billion 0.9180 $2 billion 0.9180 $2 billion 0.9178 $6 billion Compute the price per dollar of par
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How to use Microsoft Excel for financial calculations? Microsoft Office Excel is a great computer program that is widely used throughout the financial industry. Excel is an invaluable tool in Finance and Accounting. Of course professionals also use special financial calculators. But a financial calculator can be expensive for students. It is not intuitive to use and unless they become investment bankers or realtors, most students will never use it after finishing the financial course. Fortunately
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project the value of the project to see if it is going to bring them the profits they desire. For example, if a business owner is interested in acquiring a new company, he or she must look at different aspects of the company as it is now and project the value over several years to ensure that a profit will be made. In the case presented, two companies are being compared to see which would be the better company to acquire based on income statement and cash flow projections, Net present value (NPV), and
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CONTROLLING THE RATE OF RETURN Return on investment is normally used to judge the managerial performance in an investment center. Managers therefore try to control and improve the ROI of their investment center. Rate-of-return regulation was used most regularly to determine reasonable prices for goods supplied by utility companies. This regulation is considered fair due to the fact that they give the company the opportunity to recover costs incurred by providing consumers with their goods or services
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