1. What are the three basic questions Financial Managers must answer? 2. What are the three...

Transcribed Image Text:

1. What are the three basic questions Financial Managers must answer? 2. What are the three major forms of business organization and identify their respective strengths and weaknesses. 3. Explain why maximizing the current value of the firm's stock is the appropriate goal for management. 4. What are agency problems, and why do they exist within a corporation? Discuss how agency conflicts affect the goal of maximizing shareholder value. Chapter # 3 1. Explian the DuPont analysis and write down its formula? 2. What are the major categories of financial ratios and what are some of the problems associated with financial statement analysis? 3. What are four elements of financial planning and explain six steps in financial planning model? 4. What is the internal growth rate? 5. What is the sustainable growth rate? 6. What are the major determinants of growth? 7. The most recent financial statements for ABC, Inc., are shown here: Sales Costs Balance Sheet 4.800 Current assets 6084 Cumm Liabilities 134 3.849 Fixed assets 5183 Long-term de 2,47 Exity 7,056 Retained in 200 Texes (19%) 36 Net 624 Total 11.267 Total The company is running at full capacity and the company maintains a constant 30 percent dividend payout ratio. Like every other firm in its industry, next year's sales are projected to increase by exactly 12 percent. What is the external financing needed (EFN) and plug variable options to adjust this EFN? Calculate Internal and Sustainable Growth rates of a company? 1. You are reviewing a new project and have estimated the following cash flows: -Year 0: CF=-165,000 CF-63,120; CF=70,800; -Year 1: -Year 2: -Year 3: CF 91,080; NI-13,620 NI-3,300 NI-29,100 Compute the IRR, NPV, and Profitability Index for the above new project. Assume the required return is 12%. 1. What are the three basic questions Financial Managers must answer? 2. What are the three major forms of business organization and identify their respective strengths and weaknesses. 3. Explain why maximizing the current value of the firm's stock is the appropriate goal for management. 4. What are agency problems, and why do they exist within a corporation? Discuss how agency conflicts affect the goal of maximizing shareholder value. Chapter # 3 1. Explian the DuPont analysis and write down its formula? 2. What are the major categories of financial ratios and what are some of the problems associated with financial statement analysis? 3. What are four elements of financial planning and explain six steps in financial planning model? 4. What is the internal growth rate? 5. What is the sustainable growth rate? 6. What are the major determinants of growth? 7. The most recent financial statements for ABC, Inc., are shown here: Sales Costs Balance Sheet 4.800 Current assets 6084 Cumm Liabilities 134 3.849 Fixed assets 5183 Long-term de 2,47 Exity 7,056 Retained in 200 Texes (19%) 36 Net 624 Total 11.267 Total The company is running at full capacity and the company maintains a constant 30 percent dividend payout ratio. Like every other firm in its industry, next year's sales are projected to increase by exactly 12 percent. What is the external financing needed (EFN) and plug variable options to adjust this EFN? Calculate Internal and Sustainable Growth rates of a company? 1. You are reviewing a new project and have estimated the following cash flows: -Year 0: CF=-165,000 CF-63,120; CF=70,800; -Year 1: -Year 2: -Year 3: CF 91,080; NI-13,620 NI-3,300 NI-29,100 Compute the IRR, NPV, and Profitability Index for the above new project. Assume the required return is 12%.