Principles of Finance DISs

| November 9, 2018

Principles of Finance

W1 – 1In 200 words, summarize the
role of management as it relates to finance in a corporation. In your
post, address the following:

the various aspects of finance that management must understand.
why a manager needs to understand the characteristics and importance of
financial markets including risk and efficiency.
why cash flow is more important than sales in a business.
what could happen if management does not fulfill responsibilities related to
finance. If you have one, share a real world example from your own
professional experience or from an external source.

W1 – 2 View this video
Choose one
of the financial statements and explain in 200 words, how a manager would use
the statement to drive financial analysis and decision-making

W2 –
Imagine that you have decided you need a new
car, but not any car will do; you have decided to purchase the car of your
dreams. Conduct some research as to the cost of this car. You have
determined in this imagined scenario that you could afford to make a 10% down
payment. You can borrow the balance either from your local bank using a
four-year loan or from the dealership’s finance company. If you purchase
from your dealership’s finance company, the APR will be 10% with your 10% down
and monthly payments over three years. However, the dealership will give you a
rebate of 5% of the car price after the three year term is complete. You
want the best deal possible, so you consider the following questions:

type of car have you selected, and what will it cost?
is the interest rate from your local bank for a car loan for four years?
will your payment be to your local bank, assuming your 10% down payment?
Be sure to use the formula provided in Chapter 4 and show your work. How
much will that car have cost in four years?
will your payment be to the dealership finance company assuming your 10%
down payment? Be sure to use the formula provided in Chapter 4 and show
your work. How much will that car have cost in 3 years?
is the better deal and why?”>
Go to”>Yahoo Finance Bonds Center.
Under: Features / BOND LOOKUP / Find Bonds by Name:
Type in the first letter of your last name.
Under “Type” Choose one of the “Corp” Bonds.
Assume interest rates for bonds today is 5% for
an AAA rated bond. Calculate the price of the bond you have selected relative
to the 5%. Is the bond selling at a premium or a discount? Why? Be sure to show
how you arrived at your answer. What other factors may influence the
value of a bond?
W3-2 View the video

Imagine the producers of this video ask you to
appear in the video to offer two additional considerations in capital budgeting
decisions. One consideration must be quantitative (numeric). The other must be
qualitative (non-numeric). Write a script to describe capital budgeting
considerations that you think are important for managers to consider. Your
script should be 200 words.
W4 – 2 Corporations often use different costs of
capital for different operating divisions. Using an example, calculate the
weighted cost of capital (WACC). What are some potential issues in using
varying techniques for cost of capital for different divisions? If the overall
company weighted average cost of capital (WACC) were used as the hurdle rate
for all divisions, would more conservative or riskier divisions get a greater
share of capital? Explain your reasoning. What are two techniques that you
could use to develop a rough estimate for each division’s cost of capital? Your
response should be 200 words.
W5 – 1 Ratio Analysis
PROQUEST or JSTOR, find two articles that discuss financial ratio analysis.
Identify two advantages and two disadvantages to using ratios in financial
analysis – 200 words.

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