Sunday, December 29, 2019

Women played a major role in the fight against inequality...

Women played a major role in the fight against inequality and discrimination against female gender for generations. Throughout the 20th century and up to WWI, most women saw their primary roles as being housewives and mothers, and less than 30 percent of women worked outside the home. That was the context for Demi Hansen’s life but during WWII she became a Rosie the Riveter. Women had no self-representation other than from their husbands and fathers, until WWII when opportunity’s were previously only for men was given to women which significant changes for Demi Hansen in her home and workplace. (Katz, lecture, 1/30/14) Demi Hansen was born on September 25, 1925 in Long Beach, California. Growing up from a family of five children Hansen†¦show more content†¦Women during the 1930’s are being portrayed as the â€Å"Industrial Revolution† in the home and advertisement illustrating women â€Å"elegantly manicured and coiffed.† Being part of the â€Å"Industrial Revolution† in the home, Hansen like any other women effected by the advertisement feel it was her job everyday to â€Å"clean the house, dinners prepared, and put the boys to sleep.† (Hansen interview, 3/23/14; Ruth Schwartz Cowan P. 484-488) Everything has started to change for Hansen when WWII began and Hansen’s husband was drafted like all other men’s in the neighborhood, â€Å"it was the duty of men’s to serve for its country when it’s in need.† Three months after Hansen’s husband was drafted, the first time she had the thought of â€Å"the new era of women† as she recalled, â€Å"seeing the Long Beach Labor Newspaper with Rosie the Riveter on the front page.† As a way to advertise and encourage women to become wartime workers, â€Å"federal government publicized women’s industrial work as patriotic support for the war by personifying the worker as â€Å"Rosie the Riveter.† Lif e changed drastically across the country as men were drafted and called into active duty. Ruth Milkman in her article also talks about â€Å"the redefining of men’s jobs and women’s jobs,† with women having the ability to being employed in places like in the military but still with existence ofShow MoreRelated Paper761 Words   |  4 Pages In the 1790s members of the industry in both Paris and London were working on inventions to try to mechanise paper-making. In England John Dickenson produced the cylinder machine that was operational by 1809. Although useful for smaller enterprises, this lacked the large scale potential of the machine resulting from the invention of Nicholas-Louis Robert in Paris, which had a more complicated incubation period. The last of the early improvements to this machine were financed by the Fourdrinier brothersRead MoreReflection Paper836 Words   |  4 Pagesand integrating quotes. Before my papers were full of â€Å"she saidâ₠¬  and â€Å"she would say†; which was boring and showed poor ability to lengthen my word choice. I also had a tendency to just throw quotes in and not integrate it into my writings. By the end of my English 101 class my papers began to present with words like â€Å"the author noted†, or â€Å"she stated† along with many other word choices and proper ways of using quotes. Here is an example from my final research paper: â€Å"Author Stephanie Jackson, a certifiedRead MoreOn Behalf of Paper1685 Words   |  7 PagesFor centuries, people have read and learned on paper. It has loyally served man as the ideal vehicle for conveying our thoughts, feelings, and ideas. In recent years, an opponent has risen: computers. The computer brought the world to our fingertips, to the palm of our hands, but is this competitor superior? Should we drop the written and printed empire that had dominated and quenched our thirst for knowledge for so long? Paper has served an ever-changing world well, constantly adapting and morphingRead MoreReflection Paper1317 Words   |  6 Pagesused to struggle with forming my thoughts into writing, let alone a paper. I was never confident with what I wrote. My writing had no greater purpose other than the assignment. My writing process included: writing my paper, proofreading it, and turning it in. Once the paper left my hands, it also left my mind. Throughout this course we worked with others, visited the writing lab, wrote critiques, and we were able to revise our papers. I believe that all of this is has caused me to grow greatly as aRead More History of Paper1180 Words   |  5 Pages The first historical mention of paper is 104 A.D. in China. The Empress of China at that time loved books and wanted to have a lot of them made. At the time everything was written on silk scrolls which were extremely expensive and time consuming to make. 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Saturday, December 21, 2019

The Roman Empire and Risk - 1084 Words

Did you ever think that a simple board game like Risk could relate to something as supreme and substantial as the Roman Republic? The board game Risk is a strategic, turn-based game in which players try to expand their empire and dominate the world. Players hope to gain power by conquering territories and by strengthening their army. To gain land, participants of the game must roll dice and score higher than the defender of the territory. Many times, territory is fought over, but other times the land is too strong to be conquered. Strategies are used to help fortify, expand and protect empires. The Roman Republic (509 B.C. - 27 B.C) was extremely powerful due to a large, strong army with lots of territory. Rome started off as a small city†¦show more content†¦3). This included major empires such as Egypt, Persia, Syria, Carthage and Greece (Fisher, par. 3). Furthermore, the Romans expanded into Celt territories to the north and west, â€Å"while also pushing back Germanic p eoples in the north† (Fisher, par. 3). Also, the Roman army fought a ten year struggle to control the Etruscan city of Veii (Gill, par. 9). Every territory the Romans conquered, power and wealth increased majorly. In the end, conquering land is the major objective of Risk; similarly the Roman Republic made this their overall goal in which they successfully achieved. In the game of Risk, strategizing is the key to winning. There is an abundance of diverse strategies, but some work better than others. Deploying a large amount of force on border territories to impede invasion is a common strategy that is very effective. Opponents will not be able to conquer this territory, which will allow the player to then switch to offense. Another strategy that is often used is aggression or invasion with force and belligerence. In addition, players will frequently surround pieces of land, in hope that the inside will collapse. The most popular strategy is definitely alliance. An alliance is when a group of empires form an association for mutual benefit. Furthermore, this could help both empires in invading and defending. For example, a player could agree to defend another player’s territory if that person agrees toShow MoreRelatedThe Roman And Roman Empire1068 Words   |  5 PagesThe Roman Empire, which was centered in the city of Rome, was the most extensive western civilization of ancient times. With its major advancements and prosperity it is hard to believe that the Roman Empire suddenly collapsed and fell into a time known as the Dark Ages. After a period of struggles for the Roman Empire, the empire gradually fell. Rome was the most successful civilization of its time. 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Friday, December 13, 2019

Solutions of Financial Management Free Essays

Chapter 1 An Overview of Financial Management Learning Objectives After reading this chapter, students should be able to: ? Identify the three main forms of business organization and describe the advantages and disadvantages of each one. ? Identify the primary goal of the management of a publicly held corporation, and understand the relationship between stock prices and shareholder value. ? Differentiate between what is meant by a stock’s intrinsic value and its market value and understand the concept of equilibrium in the market. We will write a custom essay sample on Solutions of Financial Management or any similar topic only for you Order Now Briefly explain three important trends that have been occurring in business that have implications for managers. ? Define business ethics and briefly explain what companies are doing in response to a renewed interest in ethics, the consequences of unethical behavior, and how employees should deal with unethical behavior. ? Briefly explain the conflicts between managers and stockholders, and explain useful motivational tools that can help to prevent these conflicts. Identify the key officers in the organization and briefly explain their responsibilities. Lecture Suggestions Chapter 1 covers some important concepts, and discussing them in class can be interesting. However, students can read the chapter on their own, so it can be assigned but not covered in class. We spend the first day going over the syllabus and discussing grading and other mechanics relating to the course. To the extent that time permits, we talk about the topics that will be covered in the course and the structure of the book. We also discuss briefly the fact that it is assumed that managers try to maximize stock prices, but that they may have other goals, hence that it is useful to tie executive compensation to stockholder-oriented performance measures. If time permits, we think it’s worthwhile to spend at least a full day on the chapter. If not, we ask students to read it on their own, and to keep them honest, we ask one or two questions about the material on the first mid-term exam. One point we emphasize in the first class is that students should print a copy of the PowerPoint slides for each chapter covered and purchase a financial calculator immediately, and bring both to class regularly. We also put copies of the various versions of our â€Å"Brief Calculator Manual,† which in about 12 pages explains how to use the most popular calculators, in the copy center. Students will need to learn how to use their calculators immediately as time value of money concepts are covered in Chapter 2. It is important for students to grasp these concepts early as many of the remaining chapters build on the TVM concepts. We are often asked what calculator students should buy. If they already have a financial calculator that can find IRRs, we tell them that it will do, but if they do not have one, we recommend either the HP-10BII or 17BII. Please see the â€Å"Lecture Suggestions† for Chapter 2 for more on calculators. DAYS ON CHAPTER: 1 OF 58 DAYS (50-minute periods) Answers to End-of-Chapter Questions 1-1When you purchase a stock, you expect to receive dividends plus capital gains. Not all stocks pay dividends immediately, but those corporations that do, typically pay dividends quarterly. Capital gains (losses) are received when the stock is sold. Stocks are risky, so you would not be certain that your expectations would be met—as you would if you had purchased a U. S. Treasury security, which offers a guaranteed payment every 6 months plus repayment of the purchase price when the security matures. 1-2No, the stocks of different companies are not equally risky. A company might operate in an industry that is viewed as relatively risky, such as biotechnology—where millions of dollars are spent on RD that may never result in profit. A company might also be heavily regulated and this could be perceived as increasing its risk. Other factors that could cause a company’s stock to be viewed as relatively risky include: heavy use of debt financing vs. equity financing, stock price volatility, and so on. 1-3If investors are more confident that Company A’s cash flows will be closer to their expected value than Company B’s cash flows, then investors will drive the stock price up for Company A. Consequently, Company A will have a higher stock price than Company B. -4No, all corporate projects are not equally risky. A firm’s investment decisions have a significant impact on the riskiness of the stock. For example, the types of assets a company chooses to invest in can impact the stock’s risk—such as capital intensive vs. labor intensive, specialized assets vs. general (multipurpose) assets—and how they choose to finance those assets can also impact risk. 1-5A firm’s i ntrinsic value is an estimate of a stock’s â€Å"true† value based on accurate risk and return data. It can be estimated but not measured precisely. A stock’s current price is its market price—the value based on perceived but possibly incorrect information as seen by the marginal investor. From these definitions, you can see that a stock’s â€Å"true long-run value† is more closely related to its intrinsic value rather than its current price. 1-6Equilibrium is the situation where the actual market price equals the intrinsic value, so investors are indifferent between buying or selling a stock. If a stock is in equilibrium then there is no fundamental imbalance, hence no pressure for a change in the stock’s price. At any given time, most stocks are reasonably close to their intrinsic values and thus are at or close to equilibrium. However, at times stock prices and equilibrium values are different, so stocks can be temporarily undervalued or overvalued. 1-7If the three intrinsic value estimates for Stock X were different, I would have the most confidence in Company X’s CFO’s estimate. Intrinsic values are strictly estimates, and different analysts with different data and different views of the future will form different estimates of the intrinsic value for any given stock. However, a firm’s managers have the best information about the company’s future prospects, so managers’ estimates of intrinsic value are generally better than the estimates of outside investors. 1-8If a stock’s market price and intrinsic value are equal, then the stock is in equilibrium and there is no pressure (buying/selling) to change the stock’s price. So, theoretically, it is better that the two be equal; however, intrinsic value is a long-run concept. Management’s goal should be to maximize the firm’s intrinsic value, not its current price. So, maximizing the intrinsic value will maximize the average price over the long run but not necessarily the current price at each point in time. So, stockholders in general would probably expect the firm’s market price to be under the intrinsic value—realizing that if management is doing its job that current price at any point in time would not necessarily be maximized. However, the CEO would prefer that the market price be high—since it is the current price that he will receive when exercising his stock options. In addition, he will be retiring after exercising those options, so there will be no repercussions to him (with respect to his job) if the market price drops—unless he did something illegal during his tenure as CEO. 1-9The board of directors should set CEO compensation dependent on how well the firm performs. The compensation package should be sufficient to attract and retain the CEO but not go beyond what is needed. Compensation should be structured so that the CEO is rewarded on the basis of the stock’s performance over the long run, not the stock’s price on an option exercise date. This means that options (or direct stock awards) should be phased in over a number of years so the CEO will have an incentive to keep the stock price high over time. If the intrinsic value could be measured in an objective and verifiable manner, then performance pay could be based on changes in intrinsic value. However, it is easier to measure the growth rate in reported profits than the intrinsic value, although reported profits can be manipulated through aggressive accounting procedures and intrinsic value cannot be manipulated. Since intrinsic value is not observable, compensation must be based on the stock’s market price—but the price used should be an average over time rather than on a spot date. 1-10The three principal forms of business organization are sole proprietorship, partnership, and corporation. The advantages of the first two include the ease and low cost of formation. The advantages of the corporation include limited liability, indefinite life, ease of ownership transfer, and access to capital markets. The disadvantages of a sole proprietorship are (1) difficulty in obtaining large sums of capital; (2) unlimited personal liability for business debts; and (3) limited life. The disadvantages of a partnership are (1) unlimited liability, (2) limited life, (3) difficulty of transferring ownership, and (4) difficulty of raising large amounts of capital. The disadvantages of a corporation are (1) double taxation of earnings and (2) setting up a corporation and filing required state and federal reports, which are complex and time-consuming. 1-11Stockholder wealth maximization is a long-run goal. Companies, and consequently the stockholders, prosper by management making decisions that will produce long-term earnings increases. Actions that are continually shortsighted often â€Å"catch up† with a firm and, as a result, it may find itself unable to compete effectively against its competitors. There has been much criticism in recent years that U. S. firms are too short-run profit-oriented. A prime example is the U. S. auto industry, which has been accused of continuing to build large â€Å"gas guzzler† automobiles because they had higher profit margins rather than retooling for smaller, more fuel-efficient models. -12Useful motivational tools that will aid in aligning stockholders’ and management’s interests include: (1) reasonable compensation packages, (2) direct intervention by shareholders, including firing managers who don’t perform well, and (3) the threat of takeover. The compensation package should be sufficient to attract and retain a ble managers but not go beyond what is needed. Also, compensation packages should be structured so that managers are rewarded on the basis of the stock’s performance over the long run, not the stock’s price on an option exercise date. This means that options (or direct stock awards) should be phased in over a number of years so managers will have an incentive to keep the stock price high over time. Since intrinsic value is not observable, compensation must be based on the stock’s market price—but the price used should be an average over time rather than on a spot date. Stockholders can intervene directly with managers. Today, the majority of stock is owned by institutional investors and these institutional money managers have the clout to exercise considerable influence over firms’ operations. First, they can talk with managers and make suggestions about how the business should be run. In effect, these institutional investors act as lobbyists for the body of stockholders. Second, any shareholder who has owned $2,000 of a company’s stock for one year can sponsor a proposal that must be voted on at the annual stockholders’ meeting, even if management opposes the proposal. Although shareholder-sponsored proposals are non-binding, the results of such votes are clearly heard by top management. If a firm’s stock is undervalued, then corporate raiders will see it to be a bargain and will attempt to capture the firm in a hostile takeover. If the raid is successful, the target’s executives will almost certainly be fired. This situation gives managers a strong incentive to take actions to maximize their stock’s price. 1-13a. Corporate philanthropy is always a sticky issue, but it can be justified in terms of helping to create a more attractive community that will make it easier to hire a productive work force. This corporate philanthropy could be received by stockholders negatively, especially those stockholders not living in its headquarters city. Stockholders are interested in actions that maximize share price, and if competing firms are not making similar contributions, the â€Å"cost† of this philanthropy has to be borne by someone–the stockholders. Thus, stock price could decrease. b. Companies must make investments in the current period in order to generate future cash flows. Stockholders should be aware of this, and assuming a correct analysis has been performed, they should react positively to the decision. The Mexican plant is in this category. Capital budgeting is covered in depth in Part 4 of the text. Assuming that the correct capital budgeting analysis has been made, the stock price should increase in the future. c. U. S. Treasury bonds are considered safe investments, while common stock are far more risky. If the company were to switch the emergency funds from Treasury bonds to stocks, stockholders should see this as increasing the firm’s risk because stock returns are not guaranteed—sometimes they go up and sometimes they go down. The firm might need the funds when the prices of their investments were low and not have the needed emergency funds. Consequently, the firm’s stock price would probably fall. 1-14a. No, TIAA-CREF is not an ordinary shareholder. Because it is one of the largest institutional shareholders in the United States and it controls nearly $280 billion in pension funds, its voice carries a lot of weight. This â€Å"shareholder† in effect consists of many individual shareholders whose pensions are invested with this group. b. The owners of TIAA-CREF are the individual teachers whose pensions are invested with this group. c. For TIAA-CREF to be effective in wielding its weight, it must act as a coordinated unit. In order to do this, the fund’s managers should solicit from the individual shareholders their â€Å"votes† on the fund’s practices, and from those â€Å"votes† act on the majority’s wishes. In so doing, the individual teachers whose pensions are invested in the fund have in effect determined the fund’s voting practices. 1-15Earnings per share in the current year will decline due to the cost of the investment made in the current year and no significant performance impact in the short run. However, the company’s stock price should increase due to the significant cost savings expected in the future. -16The board of directors should set CEO compensation dependent on how well the firm performs. The compensation package should be sufficient to attract and retain the CEO but not go beyond what is needed. Compensation should be structured so that the CEO is rewarded on the basis of the stock’s performance over the long run, not the sto ck’s price on an option exercise date. This means that options (or direct stock awards) should be phased in over a number of years so the CEO will have an incentive to keep the stock price high over time. If the intrinsic value could be measured in an objective and verifiable manner, then performance pay could be based on changes in intrinsic value. Since intrinsic value is not observable, compensation must be based on the stock’s market price—but the price used should be an average over time rather than on a spot date. The board should probably set the CEO’s compensation as a mix between a fixed salary and stock options. The vice president of Company X’s actions would be different than if he were CEO of some other company. 17. Setting the compensation policy for three division managers would be different than setting the compensation policy for a CEO because performance of each of these managers could be more easily observed. For a CEO an award based on stock price performance makes sense, while in this situation it probably doesn’t make sense. Each of the managers could still be given stock awards; however, rather than the award being based on stock price it could be determined from some observable measure like increased gas output, oil output, etc. Answers to End-of-Chapter Problems We present here some intermediate steps and final answers to end-of-chapter problems. Please note that your answer may differ slightly from ours due to rounding differences. Also, although we hope not, some of the problems may have more than one correct solution, depending on what assumptions are made in working the problem. Finally, many of the problems involve some verbal discussion as well as numerical calculations; this verbal material is not presented here. 2-1FV5 = $16,105. 10. 2-2PV = $1,292. 10. 2-3I/YR = 8. 01%. 2-4N = 11. 01 years. 2-5N = 11 years. 2-6FVA5 = $1,725. 22; FVA5 Due = $1,845. 99. 2-7PV = $923. 98; FV = $1,466. 4. 2-8PMT = $444. 89; EAR = 12. 6825%. 2-9a. $530. d. $445. 2-10a. $895. 42. b. $1,552. 92. c. $279. 20. d. $499. 99; $867. 13. 2-11a. 14. 87%. 2-12b. 7%. c. 9%. d. 15%. 2-13a. 10. 24 years. c. 4. 19 years. 2-14a. $6,374. 97. d(1). $7,012. 47. 2-15a. $2,457. 83. c. $2,000. d(1). $2,703. 61. 2-16PV7% = $1,428. 57; PV14% = $714. 29. 2-179%. 2-18a. Stream A: $1,251. 25. 2-19a. $423,504. 48. b. $681,537. 69. c(2). $84,550. 80. 2-20Contract 2; PV = $10,717,847. 14. 2-21a. 30-year payment plan; PV = $68,249,727. b. 10-year payment plan; PV = $63,745,773. c. Lump sum; PV = $61,000,000. 2-22a. $802. 43. c. $984. 88. 2-23a. $881. 7. b. $895. 42. c. $903. 06. d. $908. 35. e. $910. 97. 2-24a. $279. 20. b. $276. 84. c. $443. 72. 2-25a. $5,272. 32. b. $5,374. 07. 2-26$17,290. 89; $19,734. 26. 2-27a. Bank A = 4%. 2-28INOM = 7. 8771%. 2-293%. 2-30a. E = 63. 74 yrs. ; K = 41. 04 yrs. b. $35,825. 33. 2-31a. $35,459. 51. b. $27,232. 49. 2-32$496. 11. 2-33$17,659. 50. 2-34a. PMT = $10,052. 87. b. Yr 3: Int/Pymt = 9. 09%; Princ/Pymt = 90. 91%. 2-35a. PMT = $34,294. 65. b. PMT = $7,252. 78. c. Balloon PMT = $94,189. 69. 2-36a. $5,308. 12. b. $4,877. 09. 2-37a. 50 mos. b. 13 mos. c. $112. 38. 2-38$309,015. 2-39$36,950. 2-40$9,385. 3-1$1,000,000. 3-2$2,500,000. -3$3,600,000. 3-4$20,000,000. 3-5a, possibly c. 3-6$89,100,000. 3-7a. $50,000. b. $115,000. 3-8 NI = $450,000; NCF = $650,000; OCF = $650,000. 3-910,500,000 shares. 3-10a. $2,400,000,000. b. $4,500,000,000. c. $5,400,000,000. d. $1,100,000,000. 3-11$12,681,482. 3-12a. $592 million. b. RE04 = $1,374 million. c. $1,600 million. d. $15 million. e. $620 million. 3-13a. $90,000,000. b. NOWC05 = $192,000,000; NOWC04 = $210,000,000. c. OC04 = $460,000,000; OC05 = $492,000,000. d. FCF = $58,000,000. 3-14a. $2,400,000. b. NI = 0; NCF = $3,000,000. c. NI = $1,350,000; NCF = $2,100,000. 4-1AR = $800,000. 4-2D/A = 58. 33%. 4-3TATO = 5; EM = 1. . 4-4M/B = 4. 2667. 4-5P/E = 12. 0. 4-6ROE = 8%. 4-7$112,500. 4-815. 31%. 4-9$142. 50. 4-10NI/S = 2%; D/A = 40%. 4-112. 9867. 4-12TIE = 2. 25. 4-13TIE = 3. 86. 4-14ROE = 23. 1%. 4-15(ROE = +5. 54%; QR = 1. 2. 4-167. 2%. 4-17a. 4-186. 0. 4-19$262,500. 4-20$405,682. 4-21$50. 4-22A/P = $90,000; Inv = $90,000; FA = $138,000. 4-23a. Current ratio = 1. 98; DSO = 76. 3 days; Total assets turnover = 1. 73; Debt ratio = 61. 9%. 4-24a. TIE = 11; EBITDA covera ge = 9. 46; Profit margin = 3. 40%; ROE = 8. 57%. 6-1b. Upward sloping yield curve. c. Inflation expected to increase. d. Borrow long term. 6-22. 25%. 6-36%; 6. 33%. 6-41. 5%. 6-50. %. 6-621. 8%. 6-75. 5%. 6-88. 5%. 6-96. 8%. 6-106. 0%. 6-111. 55%. 6-120. 35%. 6-131. 775%. 6-14a. r1 in Year 2 = 6%. b. I1 = 2%; I2 = 5%. 6-15r1 in Year 2 = 9%; I2 = 7%. 6-1614%. 6-177. 2%. 6-18a. r1 = 9. 20%; r5 = 7. 20%. 6-19a. 8. 20%. b. 10. 20%. c. r5 = 10. 70%. 7-1$935. 82. 7-2a. 7. 11%. b. 7. 22%. c. $988. 46. 7-3$1,028. 60. 7-4YTM = 6. 62%; YTC = 6. 49%; most likely yield = 6. 49%. 7-5a. VL at 5% = $1,518. 98; VL at 8% = $1,171. 19; VL at 12% = $863. 78. 7-6a. C0 = $1,012. 79; Z0 = $693. 04; C1 = $1,010. 02; Z1 = $759. 57; C2 = $1,006. 98; Z2 = $832. 49; C3 = $1,003. 65; Z3 = $912. 41; C4 = $1,000. 00; Z4 = $1,000. 00. -710-year, 10% coupon = 6. 75%; 10-year zero = 9. 75%; 5-year zero = 4. 76%; 30-year zero = 32. 19%; $100 perpetuity = 14. 29%. 7-815. 03%. 7-9a. YTM at $829 ? 15%. 7-10a. YTM = 9. 69%. b. CY = 8. 875%; CGY = 0. 816%. 7-11a. YTM = 10. 37%; YTC = 10. 15%; YTC. b. 10. 91%. c. -0. 54% (based on YTM); -0. 76% (based on YTC). 7-12a. YTM = 8%; YTC = 6. 1%. 7-13VB = $974. 42; YTM = 8. 64%. 7-1410. 78%. 7-15a. 5 years. b. YTC = 6. 47%. 7-16$987. 87. 7-17$1,067. 95. 7-188. 88%. 7-19a. ABS = 6. 3%; F = 8%. 7-20a. 8. 35%. b. 8. 13%. 8-1[pic] = 11. 40%; ( = 26. 69%; CV = 2. 34. 8-2bp = 1. 12. 8-3r = 10. 9%. 8-4rM = 11%; r = 12. 2%. 8-5a. = 1. b. r = 13%. 8-6a. [pic]Y = 14%. b. (X = 12. 20%. 8-7bp = 0. 7625; rp = 12. 1%. 8-8b = 1. 33. 8-94. 5%. 8-104. 2%. 8-11r = 17. 05%. 8-12rM – rRF = 4. 375%. 8-13a. ri = 15. 5%. b(1). rM = 15%; ri = 16. 5%. c(1). ri = 18. 1%. 8-14bN = 1. 16. 8-157. 2%. 8-16rp = 11. 75%. 8-171. 7275. 8-18a. $0. 5 million. d(2). 15%. 8-19a. CVX = 3. 5; CVY = 2. 0. c. rX = 10. 5%; rY = 12%. d. Stock Y. e. rp = 10. 875%. 8-20a. rA = 11. 30%. c. (A = 20. 8%; (p = 20. 1%. 8-21a. ri = 6% + (5%)bi. b. 15%. c. Indifference rate = 16%. 9-1D1 = $1. 6050; D 3 = $1. 8376; D5 = $2. 0259. 9-2[pic] = $6. 25. 9-3[pic] = $21. 20; rs = 11. 30%. 9-4b. $37. 80. c. 34. 09. 9-5$60. 9-6rp = 8. 33%. 9-7a. 13. 33%. b. 10%. c. 8%. d. 5. 71%. 9-8a. $125. b. $83. 33. 9-9a. 10%. b. 10. 38%. 9-10$23. 75. 9-11$13. 11. 9-12a(1). $9. 50. a(2). $13. 33. a(3). $21. 00. a(4). $44. 00. b(1). Undefined. b(2). -$48. 00, which is nonsense. 9-13a. rC = 8. 6%; rD = 5%. b. No; [pic] = $32. 61. 9-14[pic] = $27. 32. 9-15a. P0 = $32. 14. b. P0 = $37. 50. c. P0 = $50. 00. d. P0 = $78. 28. 9-16P0 = $19. 89. 9-17a. $713. 33 million. b. $527. 89 million. c. $42. 79. 9-186. 25%. 9-19a. $2. 10; $2. 205; $2. 31525. b. PV = $5. 29. c. $24. 72. d. $30. 00. e. $30. 00 9-20a. P0 = $54. 11; D1/P0 = 3. 55%; CGY = 6. 45%. 9-21a. 24,112,308. b. $321,000,000. c. $228,113,612. d. $16. 81. 9-22$35. 00. 9-23a. New price = $44. 26. b. beta = 0. 5107. 9-24a. $2. 01; $2. 31; $2. 66; $3. 06; $3. 52. b. P0 = $39. 43. c. D1/P0 2006 = 5. 10%; CGY2006 = 6. 9%; D1/P0 2011 = 7. 00%; CGY2011 = 5%. 1 0-1rd(1 – T) = 7. 80%. 10-2rp = 8%. 10-3rs = 13%. 10-4rs = 15%; re = 16. 11%. 10-5Projects A through E should be accepted. 10-6a. rs = 16. 3%. b. rs = 15. 4%. c. rs = 16%. d. rs AVG = 15. 9%. 10-7a. rs = 14. 83%. b. F = 10%. c. re = 15. 81%. 10-8rs = 16. 51%; WACC = 12. 79%. 10-9WACC = 12. 72%. 10-10WACC = 11. 4%. 10-11wd = 20%. 10-12a. rs = 14. 40%. b. WACC = 10. 62%. c. Project A. 10-13re = 17. 26%. 10-1411. 94%. 10-15a. g = 9. 10%. b. Payout = 50. 39%. 10-16a. g = 8%. b. D1 = $2. 81. c. rs = 15. 81%. 10-17a. g = 3%. b. EPS1 = $5. 562. 10-18a. rd = 7%; rp = 10. 20%; rs = 15. 72%. b. WACC = 13. 86%. c. Projects 1 and 2 will be accepted. 10-19a. Projects A, C, E, F, and H should be accepted. b. Projects A, F, and H should be accepted; $12 million. c. Projects A, C, F, and H should be accepted; $15 million. 10-20a. rd(1 – T) = 5. 4%; rs = 14. 6%. b. WACC = 10. 92%. 11-1NPV = $7,486. 68. 11-2IRR = 16%. 11-3MIRR = 13. 89%. 11-44. 34 years. 11-5DPP = 6. 51 years. 11-6a. 5%: NPVA = $3. 52; NPVB = $2. 87. 0%: NPVA = $0. 58; NPVB = $1. 04. 15%: NPVA = -$1. 91; NPVB = -$0. 55. b. IRRA = 11. 10%; IRRB = 13. 18%. c. 5%: Choose A; 10%: Choose B; 15%: Do not choose either one. 11-7a. NPVA = $866. 16; IRRA = 19. 86%; MIRRA = 17. 12%; PaybackA = 3 yrs; Discounted Payback = 4. 17 yrs; NPVB = $1,225. 25; IRRB = 16. 80%; MIRRB = 15. 51%; PaybackB = 3. 21 yrs; D iscounted Payback = 4. 58 yrs. 11-8a. Without mitigation: NPV = $12. 10 million; With mitigation: NPV = $5. 70 million. 11-9a. Without mitigation: NPV = $15. 95 million; With mitigation: NPV = -$11. 25 million. 11-10Project A; NPVA = $30. 16. 11-11NPVS = $448. 86; NPVL = $607. 0; Accept Project L. 11-12IRRL = 11. 74%. 11-13MIRRX = 13. 59%. 11-14a. HCC; PV of costs = -$805,009. 87. c. HCC; PV of costs = -$767,607. 75. LCC; PV of costs = -$686,627. 14. 11-15a. IRRA = 20%; IRRB = 16. 7%; Crossover rate ? 16%. 11-16a. NPVA = $14,486,808; NPVB = $11,156,893; IRRA = 15. 03%; IRRB = 22. 26%. b. Crossover rate ? 12%. 11-17a. NPVA = $200. 41; NPVB = $145. 93. b. IRRA = 18. 1%; IRRB = 24. 0%. c. MIRRA = 15. 10%; MIRRB = 17. 03%. f. MIRRA = 18. 05%; MIRRB = 20. 48%. 11-18a. No; PVOld = -$89,910. 08; PVNew = -$94,611. 45. b. $2,470. 80. c. 22. 94%. 11-19b. NPV10% = -$99,174; NPV20% = $500,000. d. 9. 54%; 22. 7%. 11-20$10,239. 20. 11-21MIRR = 10. 93%. 11-22$250. 01. 12-1a. $12,000,000. 12-2a. $2 ,600,000. 12-3$4,600,000. 12-4b. Accelerated method; $12,781. 64. 12-5E(NPV) = $3,000,000; (NPV = $23. 622 million; CV = 7. 874. 12-6a. -$178,000. b. $52,440; $60,600; $40,200. c. $48,760. d. NPV = -$19,549; Do not purchase. 12-7b. -$126,000. c. $42,518; $47,579; $34,926. d. $50,702. e. NPV = $10,841; Purchase. 12-8a. Expected CFA = $6,750; Expected CFB = $7,650; CVA = 0. 0703. b. NPVA = $10,036; NPVB = $11,624. 12-9NPV5 = $2,211; NPV4 = -$2,081; NPV8 = $13,329. 12-10a. NPV = $37,035. 13. b. +20%: $77,975. 63; -20%: NPV = -$3,905. 37. c. E(NPV) = $34,800. 21; (NPV = $35,967. 84; CV = 1. 03. 13-1a. E(NPV) = -$446,998. 50. b. E(NPV) = $2,806,803. 16. c. $3,253,801. 66. 13-2a. Project B; NPVB = $2,679. 46. b. Project A; NPVA = $3,773. 65. c. Project A; EAAA = $1,190. 48. 13-3NPV190-3 = $20,070; NPV360-6 = $22,256. 13-4A; EAAA = $1,407. 85. 13-5Projects A, B, C, and D; Optimal capital budget = $3,900000. 13-6NPVA = $9. 93 million. 13-7Machine B; Extended NPVB = $3. 67 million. 13-8EAAY = $7,433. 12. 13-9Wait; NPV = $2,212,964. 13-10No, NPV3 = $1,307. 29. 13-11a. Accept A, B, C, D, and E; Capital budget = $5,250,000. b. Accept A, B, D, and E; Capital budget = $4,000,000. c. Accept B, C, D, E, F, and G; Capital budget = $6,000,000. 13-12a. NPV = $4. 6795 million. b. No, NPV = $3. 2083 million. c. 0. 13-13a. NPV = -$2,113,481. 31. b. NPV = $1,973,037. 39. c. E(NPV) = -$70,221. 96. d. E(NPV) = $832,947. 27. e. $1,116,071. 43. 14-1QBE = 500,000. 14-230% debt and 70% equity. 14-3a. E(EPSC) = $5. 10. 14-4bU = 1. 0435. 14-5a. ROELL = 14. 6%; ROEHL = 16. 8%. b. ROELL = 16. 5%. 14-6a(1). -$60,000. b. QBE = 14,000. 14-7No leverage: ROE = 10. 5%; ( = 5. 4%; CV = 0. 51; 60% leverage: ROE = 13. 7%; ( = 13. 5%; CV = 0. 99. 14-8rs = 17%. 14-9a. P0 = $25. b. P0 = $25. 81. 14-10a. FCA = $80,000; VA = $4. 80/unit; PA = $8. 0/unit. 14-11a. 10. 96%. b. 1. 25. c. 1. 086957. d. 14. 13%. e. 10. 76%. 14-12a. EPSOld = $2. 04; New: EPSD = $4. 74; EPSS = $3. 27. b. 339,750 units. c. QNew, Debt = 272,250 units. 14-13Debt used: E(EPS) = $5. 78; (EPS = $1. 05; E(TIE) = 3. 49(. Stock used: E(EPS) = $5. 51; (EPS = $0. 85; E(TIE) = 6. 00(. 15-1Payout = 55%. 15-2P0 = $60. 15-3P0 = $40. 15-4D0 = $3. 44. 15-5$3,250,000. 15-6Payout = 31. 39%. 15-7a. $1. 44. b. 3%. c. $1. 20. d. 33? %. 15-8a. 12%. b. 18%. c. 6%; 18%. d. 6%. e. 28,800 new shares; $0. 13 per share. 15-9a(1). $3,960,000. a(2). $4,800,000. a(3). $9,360,000. a(4). Regular = $3,960,000; Extra = $5,400,000. c. 5%. d. 15%. 16-1103. 41 days; 86. 99 days; $400,000; $32,000. 16-273 days; 30 days; $1,178,082. 16-3$1,205,479; 20. 5%; 22. 4%; 10. 47%; bank debt. 16-4a. 83 days. b. $356,250. c. 4. 87(. 16-5a. DSO = 28 days. b. A/R = $70,000. 16-6a. 32 days. b. $288,000. c. $45,000. d(1). 30. d(2). $378,000. 16-7a. 57. 33 days. b(1). 2(. b(2). 12%. c(1). 46. 5 days. c(2). 2. 1262(. c(3). 12. 76%. 16-8a. ROET = 11. 75%; ROEM = 10. 80%; ROER = 9. 16%. 16-9b. $420,000. c. $35,000. 16-10a. Oct. loan = $22,800. 17-1AFN = $410,000. 17-2AFN = $610,000. 17-3AFN = $200,000. 17-4a. $133. 50 million. b. 39. 06%. 17-5a. $5,555,555,556. b. 30. 6%. c. $13,600,000. 7-6$67 million; 5. 01. 17-7$156 million. 17-8a. $480,000. b. $18,75 0. 17-9? S = $68,965. 52. 17-10$34. 338 million; 34. 97 ? 35 days. 17-11$19. 10625 million; 6. 0451. 17-12a. $2,500,000,000. b. 24%. c. $24,000,000. 17-13a. AFN = $128,783. b. 3. 45%. 17-14a. 33%. b. AFN = $2,549. c. ROE = 13. 06%. 18-1a. $5. 00. b. $2. 00. 18-2$27. 00; $37. 00. 18-3a, b, and c. 18-4$1. 82. 18-5rd = 5. 95%; $91,236. 18-6b. Futures = +$4,180,346; Bond = -$2,203,701; Net = $1,976,645. 18-7a. $3. 06; $4. 29. b. 16. 67%, 61. 46%; -100%. c. -16. 67%; -100%; 63. 40%. d. No; $30. 00 and $27. 00. e. Yes; $37. 50 and $37. 50. 19-10. 6667 pound per dollar. 9-227. 2436 yen per shekel. 19-31 yen = $0. 00907. 19-41 euro = $0. 68966 or $1 = 1. 45 euros. 19-5 |Dollars per 1,000 Units of: | |Pounds |Can. Dollars |Euros |Yen |Pesos |Kronas | |$1,747. 10 |$820. 60 |$1,206. 90 |$8. 97 |$93. 10 |$128. 10 | 19-76. 49351 krones. 19-815 kronas per pound. 19-10rNOM-U. S. = 4. 6%. 19-11117 pesos. 19-12b. $1. 6488. 19-13a. $2,772,003. b. $2,777,585. c. $3,333,333. 19-14+$250,000. 19-15b. $19 ,865. 19-16$468,837,209. 19-17a. $52. 63; 20%. b. 1. 5785 SF per U. S. $. c. 41. 54 Swiss francs; 16. 92%. 20-155. 6%; 50%. 20-2$196. 6. 20-3CR = 25 shares. 20-4a. D/AJ-H = 50%; D/AM-E = 67%. 20-5a. PV cost of leasing = -$954,639; Lease equipment. 20-6a. EV = -$3; EV = $0; EV = $4; EV = $49. d. 9%; $90. 20-8a. PV cost of owning = -$185,112; PV cost of leasing = -$187,534; Purchase loom. 20-9b. Percent ownership: Original = 80%; Plan 1 = 53%; Plans 2 and 3 = 57%. c. EPS0 = $0. 48; EPS1 = $0. 60; EPS2 = $0. 64; EPS3 = $0. 86. d. D/A0 = 73%; D/A1 = 13%; D/A2 = 13%; D/A3 = 48%. 21-1P0 = $37. 04. 21-2P0 = $43. 48. 21-3$37. 04 to $43. 48. 21-4a. 16. 8%. b. V = $14. 93 million. 21-5NPV = -$6,747. 71; Do not purchase. 21-6a. 14%. b. TV = $1,143. 4; V = $877. 2. How to cite Solutions of Financial Management, Papers