Devry
BUSN379 Week 1 Homework
Please complete the following exercises from
Chapter 2 of your textbook and post them in the Dropbox.
Chapter 2: 8, 14, and 19
Week
1Assignment. Chapter 2: 8, 14, and 19
2.8. What is the OCF?(5/5)
2.14 a.What is the OCF?(20/20)
b. What is the cash flow to
creditors? (Show work):
c. What is the cash flow
to stockholders? (Show work):
d. What is the addition to the NWC
(the change in the NWC)? Find the cash flow from assets then use the cash flow
from assets equation to find the change in NWC (Show work):
2.19.a.What is the Net
Income?(15/15)
b. What
is the operating cash flow for the year? (Show work):
c. Explanation
of results.
Devry
BUSN379 Week 2 Homework
Please complete the following exercises from
Chapters 4 and 5 of your textbook and post them in the Dropbox.
Chapter 4: 8, 17, and 18
Chapter 5: 1, 4, and 12
Week
2Assignment.Chapter 4: 8, 17, and 18 and Chapter 5: 1, 4, and 12
4.8.What is the Rate of
Return? (6/6)
4.17.What must you invest
today? Find the PV of a lump sum.(6/6)
4.18. What is the FV.Find the FV of a lump sum.(6/6)
a.First Scenario:
b.If you wait 10 years,
the value of your deposit at your retirement will be:
5.1. Find the PV of each cash flow:(6/6)
5.4. Find the PV of an Annuity and a Perpetuity: (8/8)
To
find the PV of a perpetuity, we use the equation:PV = C / r
5.12.Find the EAR: (8/8)
Devry
BUSN379 Week 3 Homework
Chapter 6: 16
Chapter 7: 11 and 12
Week
3Assignment.Chapter 6: 16 and Chapter 7: 11 and 12
6.16.Find % Change of Bond
Bill and Ted(24/24)
a.If the YTM suddenly rises to 9 percent:(Show
work):
b.If the YTM suddenly falls to
5 percent:
c.
d. What does this problem tell you about the
interest rate risk of longer-term
bonds?
7.11.With a return of 8
percent on this stock, how much should you pay? (4/4)
7.12.Value a stock with two different required
returns. Use the constant growth model.(12/12)
a.Price @
required return of 12%:
b.Price @
required return of 8%:
c.What
does a higher required return meanto the stock ?
6.16d:
All else the same, the longer the maturity of a
bond, the greater is
its price
sensitivity to changes in interest rates.
7.12c All else held constant, a higher required return means
that the stock will
sell for a lower price.
Also, notice that the stock price is very sensitive to
the required return. In
this case, the required return fell by 1/3 but the
stock price more than
doubled.
Devry
BUSN379 Week 4 Homework
Please complete the following exercises from
Chapter 8 of your textbook and post them in the Dropbox.
Chapter 8: 3, 4, 5, and 6
Chapter
7: 3, 4, 5, and 6
8.3.Which Project should be
accepted A or B?(4/4)
8.4.Calculate AAR, the average net income divided
by the average book value.(12/12)
a.Average
net income =
b.Average
book value =
c.AAR
=
8.5.Calculate
IRR:(8/8)
a.IRR =
b.Should the project be accepted and
why?
.
8.6. Calculate NPV:the PV of the outflows minus by the PV of the
inflows.(16/16)
a.@ 9% required return.
b.Should the project be accepted:
c.@ 21% required return.
d.Should the project be accepted:
week 5
Homework (graded)
Please complete the following exercises from Chapter 11 of your textbook and post them in the Dropbox.
Chapter 11: 4, 7, 17, and 29
week 6
Homework (graded)
Please complete the following exercises from Chapters 12 and 13 of your textbook and post them in the Dropbox.
Chapter 12: 3, 5, 6, and 15
Chapter 13: 1
week 7
Homework (graded)
Please complete the following exercises from Chapter 17 of your textbook and post them in the Dropbox.
Chapter 17: 6, 7, and 14
