# kaplan 550 unit 4 assignments

Question # 00004102 Posted By: msmonopoly Updated on: 11/25/2013 04:01 PM Due on: 11/28/2013
Subject Finance Topic Finance Tutorials:
Question
GB550: Financial Management

There are two Assignments due in Unit 4.
Assignment 1 of 2:
Complete Chapter 25 question, 25-1, p. 1005
Complete Chapter 25 problem, 25-2, p. 1007
Prepare this Assignment as a Word document. List each question, followed by your answer.

Directions for Submitting Assignment 1
Compose your Assignment in a MS Word document and save it as Username-GB550 Assignment 1-Unit#.doc (Example: TAllen- GB550 Assignment 1-Unit 4.doc). Submit your file by selecting the Unit 4: Assignment 1 Dropbox by the end of Unit 4.

Assignment 2 of 2:
Please complete all parts of spreadsheet problem 2-15 on page 89. It is recommended that you complete the problem using the Excel template located in Doc Sharing.
Directions for Submitting Assignment 2
Compose your Assignment in a MS Excel document and save it as Username-GB550 Assignment 2-Unit#.doc (Example: TAllen- GB550 Assignment 2-Unit 4.doc). Submit your file by selecting the Unit 4: Assignment 2 Dropbox by the end of Unit 4.

Assignment 1

25-1) Define the following terms, using graphs or equations to illustrateyour answers wherever feasible:
a) Portfolio; feasible set; efficient portfolio; efficient frontier
b) Indifference curve; optimal portfolio
c) Capital Asset Pricing Model (CAPM); Capital Market Line (CML)
d) Characteristic line; beta coeffiecient, b
e) Arbitrage Pricing Theory (APT)

25-2) An analyst has modeled the stock of Crisp Trucking using a two-factor APT model. The risk-free is 6%, the expected return on the first factor (r1) is 12%, and the expected return on the second factor (r2) is 8%. If bi1=0.7 and bi2-0.9, what is Crisp's required return?

Assignment 2

problem 2-15 on page 89

 a. Using the financial statements shown below, calculate net operating working capital, total net operating capital, net operating profit after taxes, free cash flow, and return on invested capital for the most recent year. Lan & Chen Technologies: Income Statements for Year Ending December 31 (Thousands of Dollars) 2013 2012 Sales \$945,000 \$900,000 Expenses excluding depreciation and amortization 812,700 774,000 EBITDA \$132,300 \$126,000 Depreciation and amortization 33,100 31,500 EBIT \$99,200 \$94,500 Interest Expense 10,470 8,600 EBT \$88,730 \$85,900 Taxes (40%) 35,492 34,360 Net income \$53,238 \$51,540 Common dividends \$43,300 \$41,230 Addition to retained earnings \$9,938 \$10,310 Lan & Chen Technologies: December 31 Balance Sheets (Thousands of Dollars) Assets 2013 2012 Cash and cash equivalents \$47,250 \$45,000 Short-term investments 3,800 3,600 Accounts Receivable 283,500 270,000 Inventories 141,750 135,000 Total current assets \$476,300 \$453,600 Net fixed assets 330,750 315,000 Total assets \$807,050 \$768,600 Liabilities and equity Accounts payable \$94,500 \$90,000 Accruals 47,250 45,000 Notes payable 26,262 9,000 Total current liabilities \$168,012 \$144,000 Long-term debt 94,500 90,000 Total liabilities \$262,512 \$234,000 Common stock 444,600 444,600 Retained Earnings 99,938 90,000 Total common equity \$544,538 \$534,600 Total liabilities and equity \$807,050 \$768,600 Key Input Data Tax rate 40% Net operating working capital 2013 NOWC = Operating current assets - Operating current liabilities 2013 NOWC = - 2013 NOWC = 2012 NOWC = Operating current assets - Operating current liabilities 2012 NOWC = - 2012 NOWC = Total net operating capital 2013 TOC = NOWC + Fixed assets 2013 TOC = + 2013 TOC = 2012 TOC = NOWC + Fixed assets 2012 TOC = + 2012 TOC = Investment in total net operating capital 2013 2012 2013 Inv. In TOC = TOC - TOC 2013 Inv. In TOC = - 2013 Inv. In TOC = Net operating profit after taxes 2013 NOPAT = EBIT x ( 1 - T ) 2013 NOPAT = x 2013 NOPAT = Free cash flow 2013 FCF = NOPAT - Net investment in operating capital 2013 FCF = - 2013 FCF = Return on invested capital 2013 ROIC = NOPAT / Total net operating capital 2013 ROIC = / 2013 ROIC = b. Assume that there were 15 million shares outstanding at the end of the year, the year-end closing stock price was \$65 per share, and the after-tax cost of capital was 8%. Calculate EVA and MVA for the most recent year. Additional Input Data Stock price per share \$65.00 # of shares (in thousands) 15,000 After-tax cost of capital 8.0% Market Value Added MVA = Stock price x # of shares - Total common equity MVA = x - MVA = - MVA = Economic Value Added EVA = NOPAT - (Operating Capital x After-tax cost of capital) EVA = - x EVA = - EVA =

Tutorials for this Question
1. ## Solution: Gb550 unit 4 assignment 1 and 2

Tutorial # 00003960 Posted By: neil2103 Posted on: 11/26/2013 02:46 PM
Puchased By: 26
Tutorial Preview
The solution of Gb550 unit 4 assignment 1 and 2...
Attachments
GB550_Assignment_1-Unit_4.docx (144.7 KB)
GB550_Assignment_2-Unit_4.xlsx (17.39 KB)
Recent Feedback
Rated By Feedback Comments Rated On
Ro...ne Plagiarism and error free content 02/29/2016
kc...804 Reasonable prices and secure payment 07/01/2015
ash...xiss Super-affordable tutorials 05/23/2015
pa...y706 Customised services and great experience 05/19/2015
ba...121 Zero-plagiarism and amazing work 04/09/2015

Great! We have found the solution of this question!