BAM 513 FINANCIAL MANAGEMENT
Question # 00193221
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Updated on: 02/11/2016 09:57 PM Due on: 02/17/2016
Graduate courses: 500 - 750 words or 2 - 3 pages.
Answer just one question from each unit:
Unit 1
1) What is the goal of the firm and, therefore, of all managers and employees? Discuss how one measures achievement and the key decision variables of this goal. Do you agree with this goal? Why or why not?
2) Describe how you would use a large number of ratios to perform a complete ratio analysis of a firm. Discuss the pros and cons of these ratios.
3) How can you determine the size of the equal, annual, end of period deposits necessary to ac- cumulate a certain future sum at the end of a specified future period at a given interest rate?
Unit 2
1) How are total risk, non diversifiable risk, and diversifiable risk related? Why is non diversifiable risk regarded as the only relevant risk? Do you agree that this is correct?
2)What is a bond’s yield to maturity(YTM)? Briefly describe the use of a financial calculator , the use of an Excel spreadsheet, and the trial-and-error approach for finding YTM. Which do you prefer and why?
3) What does the efficient–market hypothesis (EMH) say about a) securities prices, b) their reaction to new information and c) investor opportunities to profit? What is the Behavioral Finance challenge to this hypothesis?
Unit 3
1) Discuss NPV and IRR. Does the assumption concerning the reinvestment of intermediate cash inflow tend to favor NPV or IRR? In practice, which technique is preferred and why?
2) Describe the basic procedures involved in using risk-adjusted-discount rates (RADR’s). How is this approach related to capital asset pricing model (CAPM)? How do risk classes enhance the use of RADR’s?
3) What is the weighted marginal cost of capital (WMCC)? What does the WMCC schedule repre- sent? Do you believe this is always accurate?
Unit 4
1) What is the relationship among operating leverage, financial leverage and the total leverage of the firm? Do these types of leverage complement one another? Why or why not? What is your preferred measurement?
2) What is the difference between the firm’s operating cycle and its cash conversion cycle? Which would be more important to you as an owner and why?
3) For the following methods of using inventory as short-term loan collateral, describe the basic features of each, and compare their use: a) floating lien b) trust receipt loan and c) warehouse receipt loan. Which might be most risky for the lender?
Answer just one question from each unit:
Unit 1
1) What is the goal of the firm and, therefore, of all managers and employees? Discuss how one measures achievement and the key decision variables of this goal. Do you agree with this goal? Why or why not?
2) Describe how you would use a large number of ratios to perform a complete ratio analysis of a firm. Discuss the pros and cons of these ratios.
3) How can you determine the size of the equal, annual, end of period deposits necessary to ac- cumulate a certain future sum at the end of a specified future period at a given interest rate?
Unit 2
1) How are total risk, non diversifiable risk, and diversifiable risk related? Why is non diversifiable risk regarded as the only relevant risk? Do you agree that this is correct?
2)What is a bond’s yield to maturity(YTM)? Briefly describe the use of a financial calculator , the use of an Excel spreadsheet, and the trial-and-error approach for finding YTM. Which do you prefer and why?
3) What does the efficient–market hypothesis (EMH) say about a) securities prices, b) their reaction to new information and c) investor opportunities to profit? What is the Behavioral Finance challenge to this hypothesis?
Unit 3
1) Discuss NPV and IRR. Does the assumption concerning the reinvestment of intermediate cash inflow tend to favor NPV or IRR? In practice, which technique is preferred and why?
2) Describe the basic procedures involved in using risk-adjusted-discount rates (RADR’s). How is this approach related to capital asset pricing model (CAPM)? How do risk classes enhance the use of RADR’s?
3) What is the weighted marginal cost of capital (WMCC)? What does the WMCC schedule repre- sent? Do you believe this is always accurate?
Unit 4
1) What is the relationship among operating leverage, financial leverage and the total leverage of the firm? Do these types of leverage complement one another? Why or why not? What is your preferred measurement?
2) What is the difference between the firm’s operating cycle and its cash conversion cycle? Which would be more important to you as an owner and why?
3) For the following methods of using inventory as short-term loan collateral, describe the basic features of each, and compare their use: a) floating lien b) trust receipt loan and c) warehouse receipt loan. Which might be most risky for the lender?
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Rating:
/5
Solution: FINANCIAL MANGEMNT