1. Textbook page 70 (Chapter - Section 3-2A), 76 (3-3), 121 (4-5B), 602-7 (17-2 3). A = assets, S = current sales, L = accounts payable and accrued wages and taxes, M = net income / sales. d = dividends / net income. DS = projected increase in sales, S1 = projected sales. See Table 1 for 1992.

1. Mistake in case question - third sentence should be - Compare the EFN (same as AFN in textbook) given in question 1 with that obtained here (in question 2) from the percentage of sales method. Accounts payable + notes payable + accrued wages & taxes = current liabilities. 1992 interest expense (initially) = 1993. Omit - Why are the results different?

Omit 2-4 passes in Table 3. Hint: the answer for 1993 is given in Table 3: 53.21 - 49.04 = 4.17. 606-9. Please fill in Xs in Table 3. Example: cash and securities - 1992: 2.18 / 88.73 = 2.46% (percent of sales) or .0246. 1993: 106.48 (sales) X .0246 = $2.62.

1. 607-8 (17-3A) -use full capacity sales equation on page 607 (17-3A). Hint: compare projected sales to full capacity saleswill any new fixed assets be required?

1. 573-5 (16-6 A B).

1. 605-8 (17-3).

1. 612-4 (17-4E 5).

1. 612-5 (178-4E 5 6).

Case 18 - Advanced Fuels Corporation

(also cited as Case 41 in original casebook)

Topic - Entrepreneurship: Financing and Valuing a New Venture

(16^th edition - textbook)

1. Pages 584-5 in textbook, (Chapter-Section - 16-10A).

1. Your opinion / no textbook example

1. Your opinion / no textbook example / read case

1. Your opinion / no textbook example / read case

1. 334-43 (9-6, 9-7A). Example: see Project S numbers in Table 11.1 on page 394 (in 11-2) - with your financial calculator, press CF 1000 +I- (1 keystroke - to make it negative) ENTER down arrow key (I could not find a symbol) 500 ENTER down arrow key down arrow key 400 ENTER down arrow key down arrow key 300 ENTER down arrow key down arrow key 100 ENTER down arrow key down arrow key NPV 10 ENTER down arrow key CPT (answer = $78.82). Note that textbook example has 4 years of cash inflows (or net cash flows)-Case 18 has 5 (see Table 2 in case), cost of capital or financing or discount rate is different, assume no cost or $0 at time 0 or today or CFo, etc.-you need to make adjustments.

Press CE/C to clear 1 number on screen. If you ever need to clear CFs, etc. in your calculator, press 2^nd (to get yellow above key functions) +I- (reset) ENTER (set) 2^nd CPT (quit).

1. 320-2 (9-1 A B). 35 / value of company in #5. Your opinion

1. 320-2 (9-1 A B), 334-43 (9-6, 9-7A). Change 10 to original 20 bank loan in question. See (b) footnote on page 103 in casebook. Redo question 5change terminal value (bottom of Table 2) from 116 to new terminal value by changing 10 to 15% (or .1 to .15) growth rate in the equation. This changes net cash flow for year 5 (net income + depreciation/amortization + new terminal value), recompute NPV (only year 5 changes), and recompute % of common stock ownership. Your opinion.

1. See multiple of earnings method case example. Earnings = net income.

1. See adjusted tangible book value example in case and patent book value amount in balance sheet in Table 1.

1. Your opinion / no textbook example

1. Your opinion / no textbook example