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Chapter 1 CFIN5 Chapter 1 Solutions 1-1 Finance deals with decisions about money. Finance decisions deal with how money is raised and used 1-2 Simply stated, everyone should have a basic understanding of finance because everyone faces financial decisions daily, […]

Chapter 10 CFIN5 Chapter 10 Solutions 10-1 a. 1 3 Operating income before depreciation $25,000 $25,000 Depreciation* (19 ,800) ( 9 ,000) b. 1 3 After-tax NOI $ 3,120 $ 9,600 ADD: depreciation (non-cash expense) 19 ,800 9 ,000 Operating […]

Chapter 11 CFIN5 Chapter 11 Solutions 11-1 a. Equation solution (set up): é ù –é ù ê ú + = + ê ú ê ú + ë û ê ú ë û 10 10 1 11 (1 YTM) $1,077 $60 […]

Chapter 12 CFIN5 Chapter 12 Solutions 12-1 Sales $200,000 Variable operating costs (60%) (120,000) 12-2 Total assets = $6,000,000 Shares of stock = 80,000 EBIT = $700,000 70% debt 40% debt EBIT $700,000 $700,000 Interest (504 ,000) (216 ,000) Earnings […]

Chapter 13 CFIN5 Chapter 13 Solutions 13-1 Capital budget = $50,000,000 13-2 Capital budget = $120,000 Debt/assets ratio = 50% Net income = $100,000 Amount of capital budget that will be raised using equity = $120,000 x (1 – 0.5) […]

Chapter 14 CFIN5 Chapter 14 Solutions 14-1 Inventory conversion period = 45 days DSO = 30 days DPO = 20 days a. Cash conversion cycle = 45 days + 30 days – 20 days = 55 days 14-2 Sales = […]

Chapter 15 CFIN5 Chapter 15 Solutions 15-1 Following is the cash budget for the next three months: Month 1 Month 2 Month 3 Sales $130,000 $130,000 $130,000 Raw materials 91,000 91,000 91,000 Cash Receipts: Collection of sales in month of […]

Chapter 16 CFIN5 Chapter 16 Solutions 16-1 The following table shows the initial forecast and the AFN: Current Growth Initial Forecast Total assets $800,000 x 1.20 $960,000 $800,000 $836,000 AFN $124,000 Sales $250,000 x 1.20 $300,000 Net profit margin 5.0% […]

Chapter 2 CFIN5 Chapter 2 Solutions 2-1 Publically-traded companies are required to provide adequate financial information to their shareholders. Information generally is provided through financial reports that a company periodically produces, which 2-2 (a) The balance sheet shows, at a […]

Chapter 3 CFIN5 Chapter 3 Solutions 3-1 Free and efficient financial markets allocate funds more efficiently than would occur without free financial markets. As a result, the real output of the economy is increased with such financial markets; 3-2 In […]

Chapter 4 CFIN5 Chapter 4 Solutions (Most solutions are rounded in the final answers, not in the intermediate computations.) 0 1 2 3 4 4-1 -700 FV = ? 0 1 2 14 15 4-2 -2,500 FV = ? FV15 […]

Chapter 5 CFIN5 Chapter 5 Solutions 5-1 1,000($29-$28)+1,000(4 0.10) $1.40 Return= = =0.05=5.0% 1,000($28) $28 ´ 5-2 40($9-$10)+40(0.50) -$0.50 Return= = =-0.05=-5.0% 40($10) $10 5-3 ($44-$42)+2(0.05) $2.10 Return= = =0.05=5.0% $42 $42 5-4 $156-$150+0 $6 Return= = =0.04=4.0% $150 $150 […]

Chapter 6 CFIN5 Chapter 6 Solutions 6-1 $1,000 Minimum $40 stock price 25 = = 6-2 a. Each bond can be converted into 40 shares of common stock. b. $1,000 Minimum $25 stock price 40 = = ; As long […]

Chapter 7 CFIN5 Chapter 7 Solutions 7-1 Total dollar return per share = ($19 – $20) + 4($0.20) = -$0.20 a. $19 – $20 $0.80 -$0.20 Rate of = 0.01 1.0% return $20 $20 $20 + = =- =- b. […]

5Chapter 8 CFIN5 Chapter 8 Solutions 8-1 a. r ˆ = (0.2)(19%) + (0.7)(9%) + (0.1)(4%) = 10.5% b. 2 2 2 = (0.2)(19 – 10.5 + (0.7)(9 – 10.5 + (0.1)(4 – 10.5 20.25 4.5% ) ) ) s […]

Chapter 9 CFIN5 Chapter 9 Solutions 9-1 6 1 1(1.10) Value PV of CFs 36,950 36,950(4.355261) 160,926.88 0.10 é ù – ê ú ê ú = = = = ê ú ê ú ë û 9-2 a. 4 1 1(1.16) […]