Lasher, W. R. (2011). Practical financial management (6th ed.). Mason, OH: South-Western.
Unit I due 16 Feb 2016 at 6pm EST
1) Critique the benefits and drawbacks of proprietorships and partnerships as a form of business organization.Your response should be at least 250 words in length
2) Contrast the information provided in the balance sheet and income statement. (See unit I study guide attached) Your response should be at least 250 words in length
Unit II due 18 Feb 2016 at 6pm EST
1) Explain free cash flow and its importance to a business. Your response should be at least 250 words in length
2) Differentiate between the different users of financial information, their needs and sources of information organization. Your response should be at least 250 words in length
3) You are given the following selected financial information for The Blatz Corporation.
Income Statement Balance Sheet
COGS $750 Cash $250
Net Income $160 Net fixed assets $850
Current ratio 2.3
Inventory Turnover 6.0 x
ACP 45 days
Debt ratio 49.12%
Calculate accounts receivable, inventory, current assets, current liabilities, debt, equity, ROA, and ROE.
Unit III due 20 Feb 2016 at 6pm EST
1) Define each part of a financial plan and discuss the importance of these components in managerial decision making. Your response should be at least 250 words in length.
2) Construct a pro forma income statement for the first year and second year for the following assumptions:
- Units of Sales in Year 1: 110,000
- Price per Unit: $11
- Variable cost per unit: 30%
- Fixed Costs: $125,000
- Income taxes: 15%
- Interest Expense: $200,000
- In year 2, Price per unit increases to $11.50, and unit of sales increases by 5%, all other assumptions remain the same.
3) Calculate the sustainable growth based on the following information:
• Earnings after taxes = $35,000
• Equity = $100,000
4) Calculate a table of interest rates for 5 years based on the following information:
- The pure interest rate is 2%
- Inflation expectations for year 1 = 3%, year 2 =4%, years 3-5 =5%
- The default risk is .1% for year one and increases by .1% over each year
- Liquidity premium is 0 for year 1 and increases by .2% each year
- Maturity risk premium is 0 for years 1 and 2 and .3% for years 3-5
Unit IV due 22 Feb 2016 at 6pm EST
1) Present value of single sum problem
You are going to be given $45,000 in 7 years. Assuming an interest rate of 2.5%, what is the present value of this amount?
2) Future value of annuity problem
You deposit $10,000 into a retirement account at the end of the next 10 years earning 9% interest, what is the future value of your retirement after 10 years?
3) Perpetuity problem
What is the value of a perpetuity with an annual payment of $50 and a discount rate of 4%?
4) Perpetuity problem
What is the value of a perpetuity with an annual payment of $100 and a discount rate of 6%?
5) Future value of single sum problem
You put $2,000 in an investment account today which will earn 8% over the next 14 years, what is the future value?