Financial Management Principles And Applications 2nd Edition Sheridan Titman ,Arthur J. Keown ,John D. Martin - Solutions

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What is a reason for reviewing the user requirements document with the client? A. To gain the client's acceptance of the detailed design. B. To verify mutual understanding of project resources. C. To verify mutual understanding of the detailed project plan. D. To verify mutual understanding of
A checkpoint review in the project plan indicates a: A. Status report is due. B. Go/no-go decisions. C. Change control meeting. D. Planned date for user sign-off.
The column chart that shows the number of resources assigned to a project over time is called a: A. Resource list B. Resource responsibility chart C. Resource histogram D. Resource allocation
"Fast-tracking" a project means: A. That the project relies on a "cookie cutter" approach, duplicating a prior, successful project plan. B. Aggressively managing the critical path during the execution phase of the project. C. That project activities which are normally done in a series are done in
Which assumption would be the MOST important in creating a high level budget? A. The use of open source programming. B. The members of a project team. C. The quality plan. D. The hourly rate for project members.
Which of the following graphical presentations of a project plan is MOST appropriate for presenting to upper management? A. CPM (Critical Path Method) B. Gantt Bar chart C. PDM (Precedence Diagram Method) D. PERT (Program Evaluation and Review Technique)
A Forcing conflict resolution mode is characterized by: A. A give-and-take attitude. B. De-emphasizing areas of difference. C. Retreating or withdrawing from an actual or potential disagreement.D. A win-lose scenario.
Which of the following is LEAST important for management to provide to the project? A. Periodic corporate communication on project milestone successes. B. Frequent informal project checkpoint meetings with stakeholders on project status and progress. C. Detailed hands-on consulting assistance to
What is one mission of the project steering committee? A. Provide project management support. B. Provide assistance with completion of tasks. C. Provide oversight and governance. D. Provide cost benefit analysis for the project manager.
Which of the following groups would BEST define who the stakeholders are in a project? A. The project team members, the executive staff of your company, the client's executive staff, and the functional department heads of your company. B. The project team members, sponsors, the executive staff of
Project sponsors have the greatest influence on the scope, quality, duration and cost of a project during which phase? A. Planning phase B. Execution phase C. Close Out phase D. Development phase
An organization is faced with choosing from a number of projects and creates an evaluation matrix. Which of the following criteria is likely to be the LEAST important? A. Cost B. Degree of Change within business C. Alignment to business needs D. Training
Which of the following is an effective outcome of a change management process? A. Minimizes productivity loss during the project. B. Strictly prohibits any change of scope during the entire project. C. Encourages frequent change during the project life cycle. D. Balances project risk and cost
Which will be detailed in the project planning document(s) with respects to the project manager? A. How performance will be evaluated B. Technical certifications held C. Vacation schedule D. Names of the project team members
Formal stakeholder acceptance of project deliverables occurs during which process? A. Scope verification B. Project scheduling C. Quality checking D. Project budget creation
A charge for the rental of a room that will be used for a project meeting is an example of what kind of cost? A. Unavoidable B. Fixed C. Variable D. Unforeseen
When you can be certain that the statement of work document is complete? A. After the system users, managers, and sponsors have reviewed and approved the work document. B. After the project sponsor has accepted the statement of work, and the project is within the proposed budget. C. When consensus
One of the developers on your project disagrees with the current corporate development standards, and believes an alternative approach to the task is superior. You do not have the technical expertise to make a valid judgment as to whether the developer has a better approach. What should you do? A.
What would most improve the project development process? A. Supplementing the budget in mission critical areas. B. Adding additional staff with special expertise in key areas. C. Utilizing a standard, well-defined project development methodology. D. Extending the overall timeline for the project to
The ratio of Budgeted Cost of Work Performed to Budgeted Cost of Work Scheduled (BCWP/BCWS) is called A. Critical Ratio (CR) B. Cost Variance (CV) C. Cost Performance Index (CPI) D. Schedule Performance Index (SPI)
You project plan designates several development phases. Some of the phases overlap. Your plan indicates where executive management involvement should occur. Executive management involvement includes the sign-off upon completion of a phase and approval for the start of the next phase. The plan
The project is well under way and you notice that the enthusiastic support of an executive stakeholder has diminished. You believe the executive now has doubt about the project. Which three abilities would best help a project manager resolve this situation? (Choose three) A. The ability to manage
The firm you are working with, Certkiller.com, has a number of stakeholders with a wide variety of backgrounds. The stakeholders do not agree on the objectives for the project. What is the first thing you should do in order to resolve the differences the stakeholders have with respect to the
Exhibit :Task A is dependent on the completion of Task B. Task C is dependent on the starting of Task B. Place the tasks in the order in which they will start. Tasks Task A Task B Task C Task order Place first task here Place second task here Certkiller.com Place third task here
Which component is used to estimate resource requirements, activity durations, and costs? A. Project plan B. Implementation plan C. Business requirements D. Work breakdown structure (WBS)
Which two methods are valid for developing project task duration estimates? (Choose two) A. Historical data B. Expert judgement C. Value engineering D. Stochastic estimating E. Bottoms-up estimating
What is the core function of a project manager? A. Project integration B. Client interface C. Systems design D. Quality assurance E. Facilitating meetings
During the planning and implementation phases, there is often a need to conduct tradeoffs between several approaches to the project execution. The trade-offs are made between A. Scope, issues, and risks. B. Risk, schedule, and quality. C. Cost, schedule, and quality. D. Overhead, direct cost, and
What are swap contracts and how are they used in the management of interest rate risk?
We are the bartages ang forwards varaus exchange-traded futures contracts in implementing a risk management strategy designed to address the problem of commodity price risk?
How can forward contracts be used as a nak management tool?
What is the role of insurance in managing the risks that a firm faces?
What is corporate risk management?
(Interest rate swap) The Prince Racket Company manufactures a line of tennis and racket ball equipment. The firm recently entered into a loan agreement for $20 million that carries a floating rate of interest equal to LIBOR plus 100 basis points (one percent). The loan has a 5-year maturity and
(Interest rate swap) Marx and Winter, Inc. operates a chain of retail clothing stores throughout the Midwestern part of the U.S. The firm recently entered into a loan agreement for $20 million that carries a floating rate of interest equal to LIBOR plus 50 basis points (one-half percent). The loan
(Related to Checkpoint 20.3 on page 670) (Call option valuation) You've just been introduced to the Black-Scholes option pricing model and want to give it a try, and would like to use it to calculate the value of a call option on TriHawk stock. Currently, TriHawk" common stock is selling for $25.00
(Related to Checkpoint 20.3 on page 670) (Call option valuation) Consider the following call option: the current price of the stock on which the call option is written is $20.00, the exercise or strike price of the call option is $18.00 the maturity of the option is 90 days or 25 year the
(Hedging commodity price risk) Minelli Enterprises uses large amounts of copper in the manufacture of ceiling fans. The firm has been very concerned about the detrimental impact of rising copper prices on its earnings and has decided to hedge the price risk associated with its next quarterly
What would the profit or loss graph (similar to Figure 20.7) look like for this option? In drawing this graph, assume that the option is being evaluated on its expiration date. What are the maximum profits, maximum losses, and the break-even point?
(Calculating put option payouts) Currently a put contract with an exercise price of $5 on a share of Milybe Aerospace's common stock is selling for (that is, its premium is)
(Put option payouts) Draw a profit or loss graph (similar to Figure 20.7) for a put contract with an exercise price of $45 for which a $5 premium is paid. You may assume that the option is being evaluated on its expiration date. Identify the break-even price of the underlying stock. What are the
(Calculating call option payouts) Currently a call contract with an exercise price of $10 on a share of List Aerospace's common stock is selling for (that is, its premium is) $2. What would the profit or loss graph (similar to that in Figure 20.7) look like for this option? In drawing this graph,
(to Checkpoint 20,2 on pages) (Call option payouts: Draw a profit or loss graph (similar to that in Figure 20.7) for a call contract with an exercise price of $50 for which a $5 premium is paid. You may assume that the option is being evaluated on its expiration date. Identify the break-even point,
(Margin requirements and marking to market) Discuss how the exchange requirements that mandate traders to put up collateral in the form of a margin www. requirement and to use this account to mark their profits or losses for the day serve to eliminate credit or default risk?
(late in Checkmani 20.4 in page ) (Hedging with forward ccontracts) The Specialty Chemical Company operates a crude oil refinery located in New Iberia, LA The company refines crude oil and sells the by-products to companies that make plastic bottles and jugs. The firm is currently planning for its
(Forward contract payout) Repeat Problem 20-1, but this time draw the profit or loss- graph from the perspective of the individual who sold (is short) the forward contract
(Forward contract payout) Construct a delivery daic profit or loss graph similar to Figure 20.2 for a long position in a forward contract with a delivery price of $65. Analyze the profit or loss for values of the underlying asset ranging from $40 to $80.
Chemical plants rely upon crude oil as the base material for the manufacture of a whole host of products. How might such a firm hedge the risk of a price increase in the cost of crude oil spanning the next 12 months of its operations?
What is a swap contract? How are swap contracts used to hedge interest rate risk?
Define a call option and contrast it with a put option.
What is a futures contract?
What are the limitations of the use of forward contracts to construct a hedge against price risk? How does a futures exchange control for these limitations?
Describe how forward contracts can be used to hedge the risk of fluctuating commodity prices for finns that must purchase them in the future.
What is a forward contract and how does it typically differ from an exchange-traded futures contract?
(Potated to The Business of Lite: Do You Moed Lite hesurance age 654 In the box feature titled The Business of Life: Do you need life insurance? what are some common sense guidelines that can be used to answer this question?
Firms regularly use insurance as a means of managing their risk exposure. What are some of the types of risks that are typically transferred to insurance companies through the use of insurance contracts?
What is the risk management policy followed by the Chesapeake Energy Corporation (CHK) with respect to the price of oil and gas it receives for its future production?
A firm's cash flows are risky for a number of reasons. Identify and discuss five sources of risk or volatility in firm cash flows.
Define the term risk management.
(ed to Bogard at me Majon Wintreme to a feky World on page 650) In the Regardless of Your Major feature the need to engage in risk management is linked to the day-to-day activities of firm employees from multiple functional areas including operations, marketing, and accounting. What are the two
Define and contrast the folowing types of financial derivatives: options, futures, and forwards?
What is meant by the term francia derivative cont
What are the imitations of forward contracts as tools for managing risk?
What is a forward contract? Contrast a forward contract with a spot contract
Compute the Canadian dolar/yen spot rate from the data in the preceding table.
You own $10,000 The dollar rate in Tokyo is 216.6752 The yen rate in New York is given in the preceding table. Are arbitrage profits possible? Set up an arbitrage scheme with your capital. What is the gain in dollars?
Compute the indirect quote for the spot and forward Canadian dollar contract
An American business needs to pay (a) 15.000 Canadian dollars, (b) 1.5 million yen, and (c) 56,000 Swiss francs to businesses abroad. What are the dollar payments to the respective countries?
What does interest rate carity refer to? Use the following data in your response to the remaining Questions?
What does the term arbitrage profits mean?
What new problems and factors are encountered in international as opposed to domestic financial management?
(ame to Checkpoint 18.3 on page 635) (International capital budgeting) An American firm is considering a new project in the country of Geeblaistan. This new project will produce the following cash flows measured in BLAs, the currency of Geeblaistan, which are expected to be repatriated to the
(flat in Checkpoied 163 page 636) (International capital budgeting) Assume you are working for a firm based in America that is considering a new project in the country of Tambivia. This new project will produce the following cash flows measured in TABS (the currency of Tambivia), which are expected
(Purchasing-power parity) If a new Samsung Blu-Ray machine costs 4,000 in Japan. and the current spot rate is .104/5, how much should this machine cost in the United States?
(Purchasing-power parity) If a new iMac costs $1.400 and the spot rate for euros is .76/$, what is the price in euros for the iMac
(Interest rate parity) On August 8, 2008, the three-month risk-free rate of interest in the U.S. was 3.75% and it was 3% in Japan. If the spot exchange rate were 009074, what would you expect the forward exchange rate to be? How does this estimate compare to the 3-month forward exchange rate found
(Interest rate parity) On August 8, 2008 the six-month risk-free rate of interest in Switzerland was 4%. If the spot exchange rate for dollars for Swiss francs is 0.9252 and the six-month forward exchange rate is 0.9270, what would you expect the U.S. six- month risk-free rate to be?
(en in point on page 528) Determining the percent-per-annum premium or discount) You are in need of Swiss (Switzerland) francs in six months, but before entering a forward contract to buy them, you would like to know their premium or discount from the existing spot rate. Calculate the premium or
(Foreign exchange arbitrage) You own $10,000. The dollar rate in Tokyo is 216.67526. The yen rate in New York is given in the previous table. Are arbitrage profits possible? Set up an arbitrage scheme with your capital. What is the gain (loss) in dollars?
(Bid, ask, and forward rates) The spreads on the contracts as a percent of the asked rates are 4 percent for yen, 3 percent for Canadian dollars, and 6 percent for Swiss francs. Show, in a table similar to the previous one, the bid rates for the different spot and forward rates.
(Converting currencies) An American business pays $20,000, $5,000, and $15,000 to suppliers in Japan, Switzerland, and Canada, respectively. How much, in local currencies, do the suppliers receive?
elated to Cinecapoint 15.1 on page 25) (Converting currencies) An American business needs to pay (a) 15,000 Canadian dollars, (b) 1.5 million yen, and (c) 55,000 Swiss francs to businesses abroad. What are the dollar payments to the respective countries?
(Rosso to Cheekpot 19.2 on p000 82) (Determining the percent-per-annum premium or discount) You are in need of Canadian dollars in six months, but before entering a forward contract to buy them, you would like to know their premium or discount from the existing spot rate. Calculate the premium or
(med to Checkpoint 13.2 on pogo 620) (Determining the percent-per-annum premium or discount) You are in need of Canadian dollars in six months, but before entering a forward contract to buy them, you would like to know their premium or discount from the existing spot rate. Calculate the premium or
(Spot rates) Compute the Canadian dollar/yen and the yen/Swiss franc spot rate from the data in the preceding table.
(Foreign exchange arbitrage) You own $10,000. The dollar rate in Tokyo is 216.6743. The yen rate in New York is given in the previous table. Are arbitrage profits possible? Set up an arbitrage scheme with your capital. What is the gain in dollars?
(Bid, spot, and forward rates) The spreads on the contracts as a percent of the asked rates are 2 percent for yen, 3 percent for Canadian dollars, and 5 percent for Swiss francs. Show, in a table similar to the preceding one, the bid rates for the different spot and forward rates.
(Indirect quotes) Compute the indirect quote for the spot and forward Canadian dollar, yen, and Swiss franc contracts.
(Converting currencies) An American business pays $10,000, $15,000, and $20,000 to suppliers in Japan, Switzerland, and Canada, respectively. How much, in local currencies, do the suppliers receive?
(ed Chakoot 19.1 on page 625) (Converting currencies) An American. business needs to pay (a) 10,000 Canadian dollars, (b) 2 million yen, and (c) 50,000 Swiss francs to businesses abroad. What are the dollar payments to the respective countries?
A corporation desires to enter a particular foreign market. The DFI analysis indicates that a direct investment in the plant in the foreign country is not profitable. What other course of action can the company take to enter the foreign market? What are the important considerations?
How is the direct foreign investment decision made? What are the inputs to this decision process? Are the inputs more complicated than those to the domestic investment problem? If so, why?
What risks are associated with direct foreign investment? How do these risks differ from those encountered in domestic investment?
In the New York exchange market, the forward rate for the Indian currency, the rupee, is not quoted. If you were exposed to exchange risk in rupees, how could you cover your position?
What steps can a firm take to reduce foreign exchange rate risk? Indicate at least two different techniques.
Define exchange rate risk and political risk.
How do purchasing-power parity, interest rate parity, and the International Fisher Effect explain the relationships between the current spot rate, the future spot rate, and the forward rate?
What are the markets and mechanics involved in engaging in simple arbitrage?
What is meant by arbitrage profits?
(ed to The Buses of Life International Invesung on page 4) Why is the diversification that international investing provides to individual investors of value?

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Financial Management Principles And Applications 2nd Edition Sheridan Titman ,Arthur J. Keown ,John D. Martin - Solutions

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