FIN 486 Entire Course NEW

UOP FIN 486 Entire Course NEW
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FIN 486 Week 1 Assignment Part 3 JJ’s Jammers Summary
FIN 486 Week 1 Assignment Part 1 Financial Statement
Construction and Part 2 Cash Flow Reconciliation
FIN 486 Week 1 Video Summary (350 Words)
FIN 486 Week 2 Individual Assignment (Chapter 5, Chapter 8)
FIN 486 Week 2 Team Assignment (P4-6, P4-19)
FIN 486 Week 3 Individual Assignment (P10–2,P10–7, P10–10,
P10–14, P10–21, P11–1, P11–4, P11–7, P11–8, P11–9)
FIN 486 Week 3 Video Summary Short Term Finance
FIN 486 Week 3 Team Assignment
FIN 486 Week 4 Individual Assignment P12-1, P12-3, P12-6,
P12-17, P12-19)
FIN 486 Week 4 Team Assignment Case Study O’Grady Apparel
Company
FIN 486 Week 4 Risk and Return Summary
FIN 486 Week 5 Individual Assignment Eboy Corporation
FIN 486 Week 5 Team Assignment Case Study Casa de Diseno
FIN 486 Week 5 Summary Long Term Financing
FIN 486 Week 5 Team Assignment Asor Products, Inc
FIN 486 Week 1 DQ 1
FIN 486 Week 1 DQ 2
FIN 486 Week 1 Individual Assignment Business Ethics (2
Papers)
FIN 486 Week 2 DQ 1

FIN 486 Week 2 DQ 2
FIN 486 Week 2 Learning Team Assignment Department
Budgets (2 Papers)
FIN 486 Week 3 DQ 1
FIN 486 Week 3 DQ 2
FIN 486 Week 3 Individual Assignment Long-Term Financial
Needs (2 Papers)
FIN 486 Week 4 DQ 1
FIN 486 Week 4 DQ 2
FIN 486 Week 4 Individual Assignment Capital Budgeting
Scenarios
FIN 486 Week 5 Learning Team Assignment Strategic Financial
Plan (2 Papers)

UOP FIN 486 Week 1 Assignment Part 1 Financial Statement
Construction and Part 2 Cash Flow Reconciliation NEW
week-1-assignment-part-1-financial-statement-
construction-and-part-2-cash-flow-reconciliation-recent
Part 1: Financial Statement Construction Exercise
Take the following results for JJ’s Jammers and create a Balance
Sheet and Income Statement in the 2012 columns of the
template showing JJ’s Jammers 2011 results (In alphabetical
order). Make sure you make the embedded calculations for the
caption accounts (like total Current Assets or Gross Profit)
Accounts Receivable 77251: Cash and Securities 315954:
Goodwill and Other Assets 448484: Inventories 40712: less:
Accumulated Depreciation -594200: Other Current Assets
21349: Plant & Equipment 1023458: Accounts payables and
accruals 373807: Accrued Taxes 19: Additional Paid in Capital
842967: Common Stock 179798: Long Term Debt 563748:
Notes payable 10578: Retained Earnings 166634: Treasury
stock (571,320) shares -25303.
Cost of Goods sold 1158228: Depreciation and Amortization
83729: Dividends 5310: Interest (5.5%) 56000: Net Sales
1701013: Selling and Admin Expenses 247637: Taxes (33%)
51287.
Part 2: Cash Flow Reconciliation

Now that you have completed the Balance Sheet and Income
Statement portion of the assignment, conduct a Cash Flow
Reconciliation. You will need to use net figures as indicated by
the line items.

UOP FIN 486 Week 1 Assignment
week-1-assignment-part-3-jj%E2%80%99s-jammers-
summary-recent
Write a 525- to 700-word summary that includes the following:
Explain how the three different parts of the Financial Statement
work together to provide a picture of how the business is
operating.
Explain the role of the Financial Manager in stewarding the
company’s resources.
Formulate and write your opinion as to whether the market for
JJ’s Jammers is good based on the financial results depicted in
the 2011 and 2012 results.

FIN 486 Week 1 DQ 1
What are a chief financial officer’s (CFO) two roles? Use real-world
examples to explain why these roles are important to a company’s
success.
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FIN 486 Week 1 DQ 2
Explain business ethics in your own words. Why are business ethics
important in strategic planning?
Howdobusinessethicsaffecttheworkplace?
Week-1-DQ-2

UOP FIN 486 Week 1 Individual Assignment Business Ethics (2
Papers) NEW
week-1-individual-assignment-business-ethics-recent
This Tutorial contains 2 Different Papers
Write a 700- to 1,050-word paper describing the demise of
Enron Corporation® and WorldCom®.
Identify major factors that led to the dissolution of Enron
Corporation® and WorldCom®.
Explain specific ethical violations in accounting practices at
Enron Corporation® and WorldCom®.
Describe the role of business ethics in strategic financial
planning.
Cite readings and at least one other source, including the
Internet.
Format your paper consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment.

UOP FIN 486 Week 1 Video Summary (350 Words) NEW
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FIN 486 Week 1 Video Summary (350 Words) NEW

FIN 486 Week 2 DQ 1
Why are financial ratios used to assess a company’s financial
performance? Why are sales reports, profits, debts, or current
liability reports insufficient? How have financial ratios been used in
your company? Do you think they are an effective assessment of
financial performance? If so, why? If not, why?
Week-2-DQ-1

FIN 486 Week 2 DQ 2
If you had to pick three commonly calculated ratios to analyze the
financial health of a company, which would you analyze? Why
would you choose those ratios?
Week-2-DQ-2

UOP FIN 486 Week 2 Individual Assignment (Chapter 5, Chapter
8) NEW
week-2-individual-assignment-new
FIN 486 Week 2 Individual Assignment (5-1,5-4,5-5,5-8,5-10,5-
17,5-21,P8-3,P8-4,P8-9,P8-10,P8-13,P8-24,P8-25,P8-26)
P8–3 Risk preferences Sharon Smith, the financial manager for
Barnett Corporation, wishes to evaluate three prospective
investments: X, Y, and Z. Sharon will evaluate each of these
investments to decide whether they are superior to
investments that her company already has in place, which have
an expected return of 12% and a standard deviation of 6%. The
expected returns and standard deviations of the investments
are as follows:
a. If Sharon were risk neutral, which investments would she
select? Explain why.
b. If she were risk averse, which investments would she select?
Why?
c. If she were risk seeking, which investments would she select?
Why?
d. Given the traditional risk preference behavior exhibited by
financial managers, which investment would be preferred?
Why?

Investment Expected return Standard deviation
X 14% 7%
Y 12 8
Z 10 9
P8–4 Risk analysis Solar Designs is considering an investment
in an expanded product line. Two possible types of expansion
are being considered. After investigating the possible
outcomes, the company made the estimates shown in the
following table.
Expansion A Expansion B
Initial investment $12,000 $12,000
Annual rate of return
Pessimistic 16% 10%
Most likely 20% 20%
Optimistic 24% 30%
a. Determine the range of the rates of return for each of the two
projects.
b. Which project is less risky? Why?
c. If you were making the investment decision,which one would
you choose? Why? What does this decision imply about your
feelings toward risk?
d. Assume that expansion B’s most likely outcome is 21% per
year and that all other facts remain the same. Does your answer
to part c now change? Why?
P8–9 Rate of return, standard deviation, and coefficient of
variation Mike is searching for a stock to include in his current
stock portfolio. He is interested in Hi-Tech, Inc.; he has been
impressed with the company’s computer products and believes
that Hi-Tech is an innovative market player. However, Mike
realizes that any time you consider a technology stock, risk is a
major concern. The rule he follows is to include only securities
with a coefficient of variation of returns below 0.90.
Mike has obtained the following price information for the
period 2012 through 2015. Hi-Tech stock, being growth-

oriented, did not pay any dividends during these 4 years.
Stock price
Year Beginning End
2012 $14.36 $21.55
2013 21.55 64.78
2014 64.78 72.38
2015 72.38 91.80
a. Calculate the rate of return for each year, 2012 through 2015,
for Hi-Tech stock.
b. Assume that each year’s return is equally probable, and
calculate the average return over this time period.
c. Calculate the standard deviation of returns over the past 4
years. (Hint: Treat these data as a sample.)
d. Based on b and c, determine the coefficient of variation of
returns for the security.
e. Given the calculation in d, what should be Mike’s decision
regarding the inclusion of Hi-Tech stock in his portfolio?
P8–10 Assessing return and risk Swift Manufacturing must
choose between two asset purchases. The annual rate of return
and the related probabilities given in the following table
summarize the firm’s analysis to this point.
Project 257 Project 432
Rate of return Probability Rate of return Probability
−10% 0.01 10% 0.05
10 0.04 15 0.10
20 0.05 20 0.10
30 0.10 25 0.15
40 0.15 30 0.20
45 0.30 35 0.15
50 0.15 40 0.10
60 0.10 45 0.10
70 0.05 50 0.05
80 0.04 100 0.01
a. For each project, compute: (1) The range of possible rates of

return. (2) The expected return. (3) The standard deviation of
the returns. (4) The coefficient of variation of the returns.
b. Construct a bar chart of each distribution of rates of return. c.
Which project would you consider less risky? Why?
P8–13 Portfolio return and standard deviation Jamie Wong is
considering building an investment portfolio containing two
stocks, L and M. Stock L will represent 40% of the dollar value
of the portfolio, and stock M will account for the other 60%. The
expected returns over the next 6 years, 2015–2020, for each of
these stocks are shown in the following table.
Expected return
Year Stock L Stock M
2015 14% 20%
2016 14 18
2017 16 16
2018 17 14
2019 17 12
2020 19 10
a. Calculate the expected portfolio return, rp, for each of the 6
years.
b. Calculate the expected value of portfolio returns, , over the 6-
year period.
c. Calculate the standard deviation of expected portfolio
returns, , over the 6-year period.
d. How would you characterize the correlation of returns of the
two stocks L and M?
e. Discuss any benefits of diversification achieved by Jamie
through creation of the portfolio.
P8–24 Capital asset pricing model (CAPM) For each of the cases
shown in the following table, use the capital asset pricingmodel
to find the required return.
Case Risk-free rate, RF Market return, rm Beta,β
A 5% 8% 1.30
B 8 13 0.90

C 9 12 −0.20
D 10 15 1.00
E 6 10 0.60
P8–25 Beta coefficients and the capital asset pricing model
Katherine Wilson is wondering how much risk she must
undertake to generate an acceptable return on her portfolio.
The risk-free return currently is 5%. The return on the overall
stock market is 16%. Use the CAPM to calculate how high the
beta coefficient of Katherine’s portfolio would have to be to
achieve each of the following expected portfolio returns.
a. 10%
b. 15%
c. 18%
d. 20%
e. Katherine is risk averse. What is the highest return she can
expect if she is unwilling to take more than an average risk?
P8–26 Manipulating CAPM Use the basic equation for the
capital asset pricing model (CAPM) to work each of the
following problems.
a. Find the required return for an asset with a beta of 0.90 when
the risk-free rate and market return are 8% and 12%,
respectively.
b. Find the risk-free rate for a firm with a required return of
15% and a beta of 1.25 when the market return is 14%.
c. Find the market return for an asset with a required return of
16% and a beta of 1.10 when the risk-free rate is 9%.
d. Find the beta for an asset with a required return of 15%
when the risk-free rate and market return are 10% and 12.5%,
respectively.
P5–1 Using a time line The financial manager at Starbuck
Industries is considering an investment that requires an initial
outlay of $25,000 and is expected to result in cash inflows of
$3,000 at the end of year 1, $6,000 at the end of years 2 and 3,
$10,000 at the end of year 4, $8,000 at the end of year 5, and

$7,000 at the end of year 6.
a. Draw and label a time line depicting the cash flows associated
with Starbuck Industries’ proposed investment.
b. Use arrows to demonstrate, on the time line in part a, how
compounding to find future value can be used to measure all
cash flows at the end of year 6.
c. Use arrows to demonstrate, on the time line in part b, how
discounting to find present value can be used to measure all
cash flows at time zero.
d. Which of the approaches—future value or present value—do
financial managers rely on most often for decision making?
Why?
P5–4 Future values For each of the cases shown in the following
table, calculate the future value of the single cash flow
deposited today at the end of the deposit period if the interest
is compounded annually at the rate specified.
Case Single cash flow Interest rate Deposit period (years)
A $ 200 5% 20
B 4,500 8 7
C 10,000 9 10
D 25,000 10 12
E 37,000 11 5
F 40,000 12 9
P5–5 Time value You have $1,500 to invest today at 7% interest
compounded annually.
a. Find how much you will have accumulated in the account at
the end of (1) 3 years, (2) 6 years, and (3) 9 years.
b. Use your findings in part a to calculate the amount of interest
earned in (1) the first 3 years (years 1 to 3), (2) the second 3
years (years 4 to 6), and (3) the third 3 years (years 7 to 9).
c. Compare and contrast your findings in part b. Explain why
the amount of interest earned increases in each succeeding 3-
year period.
P5–8 Time value Misty needs to have $15,000 at the end of 5

years to fulfill her goal of purchasing a small sailboat. She is
willing to invest a lump sum today and leave the money
untouched for 5 years until it grows to $15,000, but she
wonders what sort of investment return she will need to earn
to reach her goal. Use your calculator or spreadsheet to figure
out the approximate annually compounded rate of return
needed in each of these cases:
a. Misty can invest $10,200 today.
b. Misty can invest $8,150 today.
c. Misty can invest $7,150 today.
P5–10 Present value calculation Without referring to the
preprogrammed function on your financial calculator, use the
basic formula for present value, along with the given
opportunity cost, r, and the number of periods, n, to calculate
the present value of $1 in each of the cases shown in the
following table.
Case Opportunity cost, r Number of periods, n
A 2% 4
B 10 2
C 5 3
D 13 2
P5–17 Cash flow investment decision Tom Alexander has an
opportunity to purchase any of the investments shown in the
following table. The purchase price, the amount of the single
cash inflow, and its year of receipt are given for each
investment. Which purchase recommendations would you
make, assuming that Tom can earn 10% on his investments?
Investment Price Single cash inflow Year of receipt
A $18,000 $30,000 5
B 600 3,000 20
C 3,500 10,000 10
D 1,000 15,000 40
P5–21 Time value: Annuities Marian Kirk wishes to select the
better of two 10-year annuities, C and D. Annuity C is an

ordinary annuity of $2,500 per year for 10 years. Annuity D is
an annuity due of $2,200 per year for 10 years.
a. Find the future value of both annuities at the end of year 10
assuming that Marian can earn (1) 10% annual interest and (2)
20% annual interest.
b. Use your findings in part a to indicate which annuity has the
greater future value at the end of year 10 for both the (1) 10%
and (2) 20% interest rates.
c. Find the present value of both annuities, assuming that
Marian can earn (1) 10% annual interest and (2) 20% annual
interest.
d. Use your findings in part c to indicate which annuity has the
greater present value for both (1) 10% and (2) 20% interest
rates.
e. Briefly compare, contrast, and explain any differences
between your findings using the 10% and 20% interest rates in
parts b and d.

UOP FIN 486 Week 2 Learning Team Assignment Department
Budgets (2 Papers) NEW
week-2-learning-team-assignment-department-budgets-
recent
Your Learning Team is the financial management team for
Huffman Trucking, responsible for creating the financial
portion of a strategic plan.
You must obtain information from the marketing, sales,
operations, and human resources departments to complete it.
Resource: Virtual Organizations
Review Huffman Trucking's financial information within the
Virtual Organizations web link located on the course materials
page.
Create a spreadsheet for each department manager to complete
his or her budget. Refer to the finance and accounting
information for budget examples.
Include an area in each spreadsheet for managers to list major
assumptions.
Draft a memo directed to department managers, containing the
following information:
· A summary of team players and their role in creating a
strategic plan
· Instructions explaining how managers should complete their
budgets in the spreadsheets, including information needed to

prepare a cash flow budget,
and to time cash coming in and going out
Create a sales forecast predicting sales over the next 2 years.
Use financial information available on the Huffman Trucking
Web site to create the forecast.
Format the memo consistent with APA guidelines.

UOP FIN 486 Week 2 Team Assignment (P4-6, P4-19) NEW
week-2-team-assignment-recent
P4–6
Finding operating and free cash flows Consider the following
balance sheets and selected data from the income statement of
Keith
Corporation.
Keith Corporation Balance Sheets
December 31 Assets 2015 2014 Cash $ 1,500 $ 1,000
Marketable securities 1,800 1,200 Accounts receivable 2,000
1,800 Inventories 2,900 2,800 $ 8,200 $ 6,800 Gross fixed
assets $29,500 $28,100 Less: Accumulated depreciation 14,700
13,100 Net fixed assets $14,800 $15,000 Total assets $23,000
$21,800 Total current assets Liabilities and stockholders’
equity Keith Corporation Balance Sheets
December 31 Assets 2015 2014 Cash $ 1,500 $ 1,000 Accounts
payable $ 1,600 $ 1,500 Notes payable 2,800 2,200 200 300 $
4,600 $ 4,000 5,000 5,000 $ 9,600 $ 9,000 $10,000 $10,000
3,400 2,800 Total stockholders’ equity $13,400 $12,800 Total
liabilities and stockholders’ equity $23,000 $21,800 Accruals
Total current liabilities
Long-term debt
Total liabilities
Common stock
Retained earnings Keith Corporation Income Statement Data
(2015) Keith Corporation Balance Sheets

December 31 Assets
Cash 2015 2014 $ 1,500 $ 1,000 Depreciation expense $1,600
Earnings before interest and taxes (EBIT) 2,700 Interest
expense 367 Net profits after taxes 1,400 Tax rate 40% a.
Calculate the firm’s net operating profit after taxes (NOPAT) for
the year
ended December 31, 2015, using Equation 4.1.
b. Calculate the firm’s operating cash flow (OCF) for the year
ended
December 31, 2015, using Equation 4.3. c. Calculate the firm’s
free cash flow (FCF) for the year ended December
31, 2015, using Equation 4.4.
d. Interpret, compare, and contrast your cash flow estimates in
parts b
and c.
P4–19
Integrative: Pro forma statements Red Queen Restaurants
wishes
to prepare financial plans. Use the financial statements and the
other
information provided below to prepare the financial plans.
The following financial data are also available: (1) The firm has
estimated that its sales for 2016 will be $900,000. (2) The firm
expects to pay $35,000 in cash dividends in 2016. (3) The firm
wishes to maintain a minimum cash balance of $30,000. (4)
Accounts receivable represent approximately 18% of annual
sales. (5) The firm’s ending inventory will change directly with
changes in
sales in 2016. (6) A new machine costing $42,000 will be
purchased in 2016. Total
depreciation for 2016 will be $17,000. (7) Accounts payable
will change directly in response to changes in

sales in 2016. (8) Taxes payable will equal one-fourth of the tax
liability on the pro
forma income statement. (9) Marketable securities, other
current liabilities, long-term debt, and
common stock will remain unchanged. a. Prepare a pro forma
income statement for the year ended December 31,
2016, using the percent-of-sales method.
b. Prepare a pro forma balance sheet dated December 31, 2016,
using the
judgmental approach.
c. Analyze these statements, and discuss the resulting external
financing
required. Red Queen Restaurants Income Statement for the
Year Ended December 31, 2015

UOP FIN 486 Week 2 Video Summary NEW
week-2-video-summary-recent
FIN 486 Week 2 Video Summary NEW

FIN 486 Week 3 DQ 1
In your own words, explain capital budgeting. Why is it important
to a company’s long-term success? Provide an example of poorly
performed capital budgeting. How does this affect a company’s
long-term success?
Week-3-DQ-1

FIN 486 Week 3 DQ 2
Why is capital budgeting part of a company’s long-term strategic planning
process? What are the pros and cons of these methods:
o NPV
o Simple payback
o IRRTo purchase this material click below link
Week-3-DQ-2

UOP FIN 486 Week 3 Individual Assignment Long-Term
Financial Needs (2 Papers) NEW
week-3-individual-assignment-long-term-financial-needs-
recent
You are the head of the Huffman Trucking accounting
department. The chief executive officer (CEO) has asked you to
prepare a financial report addressing long-term financial
needs.
Resource: Virtual Organizations
Examine financial information for Huffman Trucking, within
the Virtual Organization web link located on the course
materials page.
Read the New Strategic Directions Memo. Calculate external
funds needed (EFN) to create the pro forma balance sheet.
Calculate the following year-end ratios for the pro forma
statements:
· Profit as a percentage of sales
· Current ratio
· Asset ratio
Prepare a 500- to 850-word financial report for the CEO
containing the EFN calculation, the ratio calculations, and an
explanation of how

you reached the calculations. Explain which income statement
and balance sheet items you assumed were variable instead of
fixed.
Format your paper consistent with APA guidelines.

UOP FIN 486 Week 3 Individual Assignment (P10–2,P10–7,
P10–10, P10–14, P10–21, P11–1, P11–4, P11–7, P11–8, P11–9)
NEW
week-3-individual-assignment-recent
P10–2 Payback comparisons Nova Products has a 5-year
maximum acceptable payback period. The firm is considering
the purchase of a new machine and must choose between two
alternative ones. The first machine requires an initial
investment of $14,000 and generates annual after-tax cash
inflows of $3,000 for each of the next 7 years. The second
machine requires an initial investment of $21,000 and provides
an annual cash inflow after taxes of $4,000 for 20 years. a.
Determine the payback period for each machine. b. Comment
on the acceptability of the machines, assuming that they are
independent projects. c. Which machine should the firm accept?
Why? d. Do the machines in this problem illustrate any of the
weaknesses of using payback? Discuss.
P10–7 Net present value: Independent projects Using a 14%
cost of capital, calculate the net present value for each of the
independent projects shown in the following table, and indicate
whether each is acceptable.
P10–10 NPV: Mutually exclusive projects Hook Industries is
considering the replacement of one of its old drill presses.
Three alternative replacement presses are under
consideration. The relevant cash flows associated with each are

shown in the following table. The firm’s cost of capital is 15%.
· a. Calculate the net present value (NPV) of each press.
· b. Using NPV, evaluate the acceptability of each press.
· c. Rank the presses from best to worst using NPV.
· d. Calculate the profitability index (PI) for each press.
· e. Rank the presses from best to worst using PI.
P10–14 Internal rate of return For each of the projects shown
in the following table, calculate the internal rate of return
(IRR). Then indicate, for each project, the maximum cost of
capital that the firm could have and still find the IRR
acceptable.
Project A Project B Project C Project D
Initial investment
(CF0) $90,000 $490,000 $20,000 $240,000
Year (t) Cash inflows (CFt)
1 $20,000 $150,000 $7,500
$120,000
2 25,000 150,000 7,500
100,000
3 30,000 150,000 7,500
80,000
4 35,000 150,000 7,500
60,000
5 40,000 — 7,500 —
P10–21 All techniques, conflicting rankings Nicholson Roofing
Materials, Inc., is considering two mutually exclusive projects,
each with an initial investment of $150,000. The company’s
board of directors has set a maximum 4-year payback
requirement and has set its cost of capital at 9%. The cash

inflows associated with the two projects are shown in the
following table.
Cash inflows (CFt)
Year Project A Project B
1 $45,000 $75,000
2 45,000 60,000
3 45,000 30,000
4 45,000 30,000
5 45,000 30,000
6 45,000 30,000
a. Calculate the payback period for each project.
b. Calculate the NPV of each project at 0%.
c. Calculate the NPV of each project at 9%.
d. Derive the IRR of each project.
e. Rank the projects by each of the techniques used. Make and
justify a recommendation.
f. Go back one more time and calculate the NPV of each project
using a cost of capital of 12%. Does the ranking of the two
projects change compared to your answer in part e? Why?
P11–1 Classification of expenditures Given the following list of
outlays, indicate whether each is normally considered a capital
expenditure or an operating expenditure. Explain your
answers. LG 2 a. An initial lease payment of $5,000 for
electronic point-of-sale cash register systems b. An outlay of
$20,000 to purchase patent rights from an inventor c. An outlay
of $80,000 for a major research and development program d.
An $80,000 investment in a portfolio of marketable securities e.
A $300 outlay for an office machine f. An outlay of $2,000 for a
new machine tool g. An outlay of $240,000 for a new building h.
An outlay of $1,000 for a marketing research report
P11–4 Sunk costs and opportunity costs Masters Golf Products,

Inc., spent 3 years and $1,000,000 to develop its new line of
club heads to replace a line that is becoming obsolete. To begin
manufacturing them, the company will have to invest
$1,800,000 in new equipment. The new clubs are expected to
generate an increase in operating cash inflows of $750,000 per
year for the next 10 years. The company has determined that
the existing line could be sold to a competitor for $250,000.
a. How should the $1,000,000 in development costs be
classified?
b. How should the $250,000 sale price for the existing line be
classified?
c. Depict all the known relevant cash flows on a time line.
P11–7 Book value Find the book value for each of the assets
shown in the accompanying table, assuming that MACRS
depreciation is being used. See Table 4.2 on page 120 for the
applicable depreciation percentages.
Asset Installed cost Recovery period (years) Elapsed time
since purchase (years)
A $ 950,000 5 3
B 40,000 3 1
C 96,000 5 4
D 350,000 5 1
E 1,500,000 7 5
P11–8 Book value and taxes on sale of assets Troy Industries
purchased a new machine 3 years ago for $80,000. It is being
depreciated under MACRS with a 5-year recovery period using
the percentages given in Table 4.2 on page 000. Assume a 40%
tax rate.
a. What is the book value of the machine?
b. Calculate the firm’s tax liability if it sold the machine for each

of the following amounts: $100,000; $56,000; $23,200; and
$15,000.
P11–9 Tax calculations For each of the following cases,
determine the total taxes resulting from the transaction.
Assume a 40% tax rate. The asset was purchased 2 years ago
for $200,000 and is being depreciated under MACRS using a 5-
year recovery period. (See Table 4.2 on page 120 for the
applicable depreciation percentages.)
a. The asset is sold for $220,000.
b. The asset is sold for $150,000.
c. The asset is sold for $96,000.
d. The asset is sold for $80,000.

UOP FIN 486 Week 3 Team Assignment NEW
week-3-team-assignment-recent
a) Calculate the after-tax cost of
debt
b) Calculate the cost of preferred
stock
c) Calculate the cost of retained
earnings
d) calculate the cost of common
stock
e) calculate the firms weighted average cost of capital using
retained earnings and the capital structure
weights
f) calculate the firms weighted average cost of capital using new
common stock and the capital structure
weights
a. Cost of debt:
Proceeds from sale of $1,000 par value bond:

b. Cost of preferred stock: rp = Dp ÷ Np
c. Cost of common stock: rj = RF + [bj × (rm − RF)]
d. Weighted average cost of capital: ra = (wi × ri) + (wp × rp) +
(ws × rn)
e. 1. Change in risk Premium: Change in beta × market risk
premium
Note: 17.5% − 15.7% = 1.8%
2. Revised weighted average cost of capital: ra = (wi x ri) + (ws x
rn)

UOP FIN 486 Week 3 Video Summary Short Term Finance NEW
week-3-video-summary-short-term-finance-recent
FIN 486 Week 3 Video Summary Short Term Finance NEW

FIN 486 Week 4 DQ 1
What are major areas of risk in financial management? What are
major areas of financial risk in your company? Which risk
management techniques are important to your company? Why?
Week-4-DQ-1

FIN 486 Week 4 DQ 2
What is capital structure? Why does it matter in terms of a
company’s financial performance? How does a company’s capital
structure affect overall risk?
Week-4-DQ-2

UOP FIN 486 Week 4 Individual Assignment Capital Budgeting
Scenarios NEW
week-4-individual-assignment-capital-budgeting-
scenarios-recent
Choose a scenario from the Capital Budgeting Worksheet to
review and analyze. Using net present value, determine the
proposal’s appropriateness and economic viability.
Prepare a 500-word report explaining your calculations and
conclusions. Answer the following in your report:
Explain the effect of a higher or lower cost of capital on a firm’s
long-term financial decisions.
Analyze the use of capital budgeting techniques in strategic
financial management.
Format your report consistent with APA guidelines.

UOP FIN 486 Week 4 Individual Assignment (P12-1, P12-3, P12-
6, P12-17, P12-19) NEW
week-4-individual-assignment-recent
P12–1
Recognizing risk Caradine Corp., a media services firm with net
earnings of $3,200,000 in the last year, is considering the
following projects.
LG 1
The media services business is cyclical and highly competitive.
The board of directors has asked you, as chief financial officer,
to do the following:
a.Evaluate the risk of each proposed project and rank it “low,”
“medium,” or “high.”
b.Comment on why you chose each ranking.
P12–3
Breakeven cash inflows and risk Blair Gasses and Chemicals is a
supplier of highly purified gases to semiconductor
manufacturers. A large chip producer has asked Blair to build a
new gas production facility close to an existing semiconductor
plant. Once the new gas plant is in place, Blair will be the
exclusive supplier for that semiconductor fabrication plant for
the subsequent 5 years. Blair is considering one of two plant
designs. The first is Blair’s “standard” plant, which will cost $30
million to build. The second is for a “custom” plant, which will
cost $40 million to build. The custom plant will allow Blair to

produce the highly specialized gases that are required for an
emerging semiconductor manufacturing process. Blair
estimates that its client will order $10 million of product per
year if the traditional plant is constructed,but if the customized
design is put in place, Blair expects to sell $15 million worth of
product annually to its client. Blair has enough money to build
either type of plant, and, in the absence of risk differences,
accepts the project with the highest NPV. The cost of capital is
12%.
LG 2
a.Find the NPV for each project. Are the projects acceptable?
b.Find the breakeven cash inflow for each project.
c.The firm has estimated the probabilities of achieving various
ranges of cash inflows for the two projects as shown in the
following table. What is the probability that each project will
achieve at least the breakeven cash inflow found in part b?
d.Which project is more risky? Which project has the
potentially higher NPV? Discuss the risk–return trade-offs of
the two projects.
e.If the firm wished to minimize losses (that is, NPV < $0),
which project would you recommend? Which would you
recommend if the goal were to achieve a higher NPV?
P12–6
Impact of inflation on investments You are interested in an
investment project that costs $40,000 initially. The investment
has a 5-year horizon and promises future end-of-year cash
inflows of $12,000, $12,500, $11,500, $9,000, and $8,500,
respectively. Your current opportunity cost is 6.5% per year.
However, the Fed has stated that inflation may rise by 1.5% or
may fall by the same amount over the next 5 years.
LG 2
Assume a direct positive impact of inflation on the prevailing
rates (Fisher effect) and answer the following questions.

(Assume that inflation has an impact on the opportunity cost,
but that the cash flows are contractually fixed and are not
affected by inflation).
a.What is the net present value (NPV) of the investment under
the current required rate of return?
b.What is the net present value (NPV) of the investment under a
period of rising inflation?
c.What is the net present value (NPV) of the investment under a
period of falling inflation?
d.From your answers in a, b, and c, what relationship do you see
emerge between changes in inflation and asset valuation?
P12–17
Real options and the strategic NPV Jenny Rene, the CFO of Asor
Products, Inc., has just completed an evaluation of a proposed
capital expenditure for equipment that would expand the firm’s
manufacturing capacity. Using the traditional NPV
methodology, she found the project unacceptable because
LG 6
NPVtraditional = −$1,700 < $0
Before recommending rejection of the proposed project, she
has decided to assess whether there might be real options
embedded in the firm’s cash flows. Her evaluation uncovered
three options:
Option 1: Abandonment. The project could be abandoned at the
end of 3 years, resulting in an addition to NPV of $1,200.
Option 2: Growth. If the projected outcomes occurred, an
opportunity to expand the firm’s product offerings further
would become available at the end of 4 years. Exercise of this
option is estimated to add $3,000 to the project’s NPV.
Option 3: Timing. Certain phases of the proposed project could
be delayed if market and competitive conditions caused the
firm’s forecast revenues to develop more slowly than planned.
Such a delay in implementation at that point has an NPV of

$10,000.
Jenny estimated that there was a 25% chance that the
abandonment option would need to be exercised, a 30% chance
that the growth option would be exercised, and only a 10%
chance that the implementation of certain phases of the project
would affect timing.
a.Use the information provided to calculate the strategic NPV,
NPVstrategic, for Asor Products’ proposed equipment
expenditure.
b.Judging on the basis of your findings in part a, what action
should Jenny recommend to management with regard to the
proposed equipment expenditure?
c.In general, how does this problem demonstrate the
importance of considering real options when making capital
budgeting decisions?
P12–19
Capital rationing: NPV approach A firm with a 13% cost of
capital must select the optimal group of projects from those
shown in the following table, given its capital budget of $1
million.
LG 6
a.Calculate the present value of cash inflows associated with
each project.
b.Select the optimal group of projects, keeping in mind that
unused funds are costly.

UOP FIN 486 Week 4 Risk and Return Summary NEW
week-4-risk-and-return-summary-recent
FIN 486 Week 4 Risk and Return Summary NEW

UOP FIN 486 Week 4 Team Assignment Case Study O’Grady
Apparel Company NEW
week-4-team-assignment-case-study-
o%E2%80%99grady-apparel-company-recent
O’Grady Apparel Company was founded nearly 160 years ago
when an Irish merchant named Garrett O’Grady landed in Los
Angeles with an inventory of heavy canvas, which he hoped to
sell for tents and wagon covers to miners headed for the
California goldfields. Instead, he turned to the sale of harder-
wearing clothing.
Today, O’Grady Apparel Company is a small manufacturer of
fabrics and clothing whose stock is traded in the OTC market. In
2015, the Los Angeles–based company experienced sharp
increases in both domestic and European markets resulting in
record earnings. Sales rose from $15.9 million in 2014 to $18.3
million in 2015 with earnings per share of $3.28 and $3.84,
respectively.
European sales represented 29% of total sales in 2015, up from
24% the year before and only 3% in 2010, 1 year after foreign
operations were launched. Although foreign sales represent
nearly one-third of total sales, the growth in the domestic
market is expected to affect the company most markedly.
Management expects sales to surpass $21 million in 2016, and
earnings per share are expected to rise to $4.40. (Selected

income statement items are presented in Table 1.)
Because of the recent growth, Margaret Jennings, the corporate
treasurer, is concerned that available funds are not being used
to their fullest potential. The projected $1,300,000 of internally
generated 2016 funds is expected to be insufficient to meet the
company’s expansion needs. Management has set a policy of
maintaining the current capital structure proportions of 25%
long-term debt, 10% preferred stock, and 65% common stock
equity for at least the next 3 years. In addition, it plans to
continue paying out 40% of its earnings as dividends. Total
capital expenditures are yet to be determined.
Jennings has been presented with several competing
investment opportunities by division and product managers.
However, because funds are limited, choices of which projects
to accept must be made. A list of investment opportunities is
shown in Table 2. To analyze the effect of the increased
financing requirements on the weighted average cost of capital
(WACC), Jennings contacted a leading investment banking firm
that provided the financing cost data given in Table 3. O’Grady
is in the 40% tax bracket.
TABLE 1
Selected Income Statement Items
TABLE 2
TABLE 3 Financing Cost Data
Long-term debt: The firm can raise $700,000 of additional debt
by selling 10-year, $1,000, 12% annual interest rate bonds to
net $970 after flotation costs. Any debt in excess of $700,000

will have a before-tax cost, rd, of 18%.
Preferred stock: Preferred stock, regardless of the amount sold,
can be issued with a $60 par value and a 17% annual dividend
rate. It will net $57 per share after flotation costs.
Common stock equity: The firm expects its dividends and
earnings to continue to grow at a constant rate of 15% per year.
The firm’s stock is currently selling for $20 per share. The firm
expects to have $1,300,000 of available retained earnings. Once
the retained earnings have been exhausted, the firm can raise
additional funds by selling new common stock, netting $16 per
share after underpricing and flotation costs.
TO DO:
a. Over the relevant ranges noted in the following table,
calculate the after-tax cost of each source of financing needed
to complete the table.
Source of capital Range of new financing After-tax
cost (%)
Long-term debt $0–$700,000 _________
$700,000 and above _________
Preferred stock $0 and above _________
Common stock equity $0–$1,300,000 _________
$1,300,000 and above _________

UOP FIN 486 Week 5 Individual Assignment Eboy Corporation
NEW
week-5-individual-assignment-eboy-corporation-recent
The current balance in accounts receivable for Eboy
Corporation is $443,000. This level was achieved with annual
(365 days) credit sales of $3,544,000. The firm offers its
customers credit terms of net 30. However, in an effort to help
its cash flow position and to follow the actions of its rivals, the
firm is considering changing its credit terms from net 30 to
2/10 net 30. The objective is to speed up the receivable
collections and thereby improve the firm’s cash flows. Eboy
would like to increase its accounts receivable turnover to 12.0.
The firm works with a raw material whose current annual
usage is 1,450 units. Each finished product requires one unit of
this raw material at a variable cost of $2,600 per unit and sells
for $4,200 on terms of net 30. It is estimated that 70% of the
firm’s customers will take the 2% cash discount and that, with
the discount, sales of the finished product will increase by 50
units per year. The firm’s opportunity cost of funds invested in
accounts receivable is 12.5%.
In analyzing the investment in accounts receivable, use the
variable cost of the product sold instead of the sale price
because the variable cost is a better indicator of the firm’s
investment.

TO DO
Create a spreadsheet similar to Table 15.3 to analyze whether
the firm should initiate the proposed cash discount. What is
your advice? Make sure that you calculate the following:
· a. Additional profit contribution from sales.
· b. Average investment in accounts receivable at present
(without cash discount).
· c. Average investment in accounts receivable with the
proposed cash discount.
· d. Reduction in investment in accounts receivable.
· e. Cost savings from reduced investment in accounts
receivable.
· f. Cost of the cash discount.
· g. Net profit (loss) from initiation of proposed cash
discount.

UOP FIN 486 Week 5 Individual Assignment Final NEW
week-5-individual-assignment-final-recent
FIN 486 Week 5 Individual Assignment Final NEW

UOP FIN 486 Week 5 Learning Team Assignment Strategic
Financial Plan (2 Papers) NEW
http://www.uopassignments.com/fin-486-uop/fin-
486-week-5-learning-team-assignment-strategic-
financial-plan-(2-papers)-recent
Resource: The previously completed budgeting spreadsheets
Create the financial portion of the strategic plan. The plan must
include 3 years of income statements, balance sheets, and cash
flow statements.
Write a 700- to 1,050-word memo that explains the plan’s
major assumptions and identifies areas of risk. The memo must
include the following:
· A review of cash flow statements and a recommendation of
implementing new short-term working capital strategies on
long-term cash flow
· An explanation of corporate risk mitigation techniques used in
capital budgeting
· An analysis of the effect of a company’s capital structure on
strategic financial planning and how it affects risk
Refer to the Mergent Online database available in the
University Library for financial plan examples.
Format your memo consistent with APA guidelines.

UOP FIN 486 Week 5 Summary Long Term Financing NEW
week-5-summary-long-term-financing-recent

UOP FIN 486 Week 5 Team Assignment Asor Products, Inc NEW
week-5-team-assignment-asor-products,-inc-recent
evaluation of a proposed capital expenditure for equipment
that would expand the firm's manufacturing capacity. Using the
traditional NPV methodology, she found the project
unacceptable because NPV traditional = -$1,700 < $0 Before
recommending rejection of the proposed project, she has
decided to assess whether there might be real options
embedded in the firm's cash flows. Her evaluation uncovered
three options:
Option 1; Abandonment; The project could be abandoned at the
end of 3 years, resulting in an addition to NPV of $1,200.
Option 2; Expansion; If the project outcomes occurred, an
opportunity to expand the firm's product offerings further
would become available at the end of 4 years. Exercise of this
option is estimated to add $ 3,000 to the projects NPV.
Option 3: Delay; Certain phases of the proposed project could
be delayed if market and competitive conditions caused the
firm's forecast revenues to develop more slowly than planned.
Such a delay in implementation at that point has a NPV of
$10,000.
Jenny estimated that there was a 25% chance that the
abandonment option would need to be exercised, a 30% chance
that the expansion option would be exercises, and only a 10%

chance that the implementation of certain phases of the project
would have to be delayed.
a) use the information provided to calculate the strategic NPV,
NPV strategic , for Asor Products' proposed equipment
expenditure.
b) judging on the basis of the findings in part a, what action
should jenny recommend to management with regard to the
proposed equipment expenditure?
c) In general, how does this problem demonstrate the
importance of considering real options when making capital
budgeting decisions?

UOP FIN 486 Week 5 Team Assignment Case Study Casa de
Diseno NEW
week-5-team-assignment-case-study-casa-de-diseno-
recent
Chapter 16
Case Study: Casa de Diseno
In January 2012, Teresa Leal was named treasurer of Casa de
Diseno. She decided that she could best orient herself by
systematically examining each area of the company’s financial
operations. She began by studying the firm’s short-term
financial activities.Casa de Diseno is located in Southern
California and specializes in a furniture line called “Ligne
Moderna.” Of high quality and contemporary design, the
furniture appeals to the customer who wants something unique
for his or her home or apartment. Most Ligne Miderna furniture
is built by special order because a wide variety of upholstery,
accent trimming, and colors is available. The product line is
distributed through exclusive dealership arrangements with
well-established retail stores. Casa de Diseno’s manufacturing
process virtually eliminates the use of wood. Plastic and metal
provide the basic framework, and wood is used only for
decorative purposes.
Casa de Diseno entered the plastic-furniture market in late
2004. The company markets its plastic-furniture products as

indoor-outdoor items under the brand name “Futuro.” Futuro
plastic furniture emphasizes comfort, durability, and
practicality and is distributed through wholesalers. The Futuro
line has been very successful, accounting for nearly 40 percent
of the firm’s sales and profits in 2011. Casa de Diseno
anticipates some additions to the Futuro line and also some
limited change of direction in its promotion in an effort to
expand the applications of the plastic furniture.
Leal has decided to study the firm’s cash management
practices. To determine the effects of these practices, she must
first determine the current operating and cash conversion
cycles. In her investigations, she found that Casa de Diseno
purchases all of its raw materials and production supplies on
open account. The company is operating at production levels
that preclude volume discounts. Most suppliers do not offer
cash discounts, and Casa de Diseno usually receives credit
terms of net 30. An analysis of Casa de Diseno’s accounts
payable showed that its average payment period is 30 days.
Leal consulted industry data and found that the industry
average payment period was 39 days. Investigation of six
California furniture manufacturers revealed that their average
payment period was also 39- days.
Next, Leal studied the production cycle and inventory policies.
Casa de Diseno tries not to hold any more inventory than
necessary in either raw materials or finished goods. The
average inventory age was 110 days. Leal determined that the
industry standard, as reported in a survey done by Furniture
Age, the trade association journal, was 83 days.
Casa de Diseno sells to all of its customers on a net-60 basis, in
line with the industry trend to grant such credit terms on
specialty furniture. Leal discovered, by aging the accounts
receivable, that the average collection period for the firm was
75 days. Investigation of the trade association’s and California
manufacturers’ averages showed that the same collection

period existed where net-60 credit terms were given. Where
cash discounts were offered, the collection period was
significantly shortened. Leal believed that if Casa de Diseno
were to offer credit terms of 3/10 net 60, the average collection
period could be reduced by 40 percent.
Casa de Diseno was spending an estimated $26,500,000 per
year on operating-cycle investments. Leal considered this
expenditure level to be the minimum she could expect the firm
to disburse during 2012. Her concern was whether the firm’s
cash management was as efficient as it could be. She knew that
the company paid 15 percent annual interest for its resource
investment. For this reason, she was concerned about the
financing cost resulting from any inefficiencies in the
management of Casa de Diseno’s cash conversion cycle. (Note:
Assume a 365-day year and that the operating –cycle
investment per dollar of payables, inventory, and receivables is
the same.)
To Do
A. Assuming a constant rate for purchases, production, and sale
throughout the year, what are Casa de Diseno’s existing
operating cycle (OC), cash conversion cycle(CCC), and resource
investment need?
B. If Leal can optimize Casa de Diseno’s operating cycle (OC),
cash conversion cycle (CCC), and resource investment need to
be under these more efficient condition?
C. In terms of resource investment requirements, what is the
cost of Casa de Diseno’s Operational inefficiency?
D. (1) If in addition to achieving industry standards for
payables and inventory, the firm can reduce the average
collection period by offering credit terms of 3/10 net 60, what
additional savings in resource investment costs will result from
the shortened cash conversion cycle, assuming that the level of

sales remains constant?
(2) If the firm’s sales (all on credit) are $40,000,000 and 45% of
the customers are expected to take the cash discount, by how
much will the firm’s annual revenues be reduced as a result of
the discount?
(3) If the firm’s variables cost of the $40,000,000 in sales is
80%, determine the reduction in the average investment in
accounts receivable and the annual savings that will result from
this reduced investment, assuming that sales remain constant.
(4) If the firm’s bad-debts expenses decline from 2% to 1.5% of
sales, what annual savings will result, assuming that sales
remain constant?
(5) Use your findings in parts (2) through (4) to assess whether
offering the cash discount can be justified financially. Explain
why or why not.
E. On the basis of your analysis in parts a through d, what
recommendations would you offer Teresa Leal?
F. Review for Teresa Leal the key sources of short-term
financing, an account payable, that she may consider for
financing Casa de Diseno’s resource investment need calculated
in part b. Be sure to mention both unsecured and secured
sources.

FIN 486 Entire Course NEW

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