Fin 301 Study guides, Class notes & Summaries

FIN 301 Penn State World Campus Final Excel project Scenario: Tom Jones, the CFO for the firm PSUWC Energy, LLC, woke up with a start at 4:00 am on July 2, 2012, due to his phone ringing. It was his senior financial analyst, vacationing in Europe, calling with bad news. Tom was supposed to present his project evaluation, at the end of the week, for the Board's proposal that they invest in new equipment that generates electricity, using a new nuclear technology. His staff of financial analysts h...

Low risk investments have... Correct answer lower expected returns High risk investments have... Correct answer higher expected returns The least risky investment correct answer treasury bills The most risky investment correct answer small company common stocks Price/return volatility is a way to measure? Correct answer risk A rational investor requires a higher expected return to accept... Correct answer additional risk Model that describes the trade off between risk and retur...

What do we not discount? Correct answer profits What is the focus on incremental cash flows? Correct answer cash flows with the project vs cash flows without the project What do we discount? Correct answer cash flows What is an example of an indirect effect to include in a project? Correct answer loss of revenue in an old project How do you separate investment and financing decisions? Correct answer -view all projects as all "equity funded" -evaluate financing options for accepted...

Discount Correct Answer Multiply a number by less than one. Discount rate Correct Answer A function of time and risk: discount rate=f(time,risk) Discount factor Correct Answer A function of both time and the discount rate: [discount rate=f(time,discount)] Present value Correct Answer of an investment is the sum of the expected cash flows multiplied by their respective discount rate. Three-Step Approach [DCF Valuation] Correct Answer 1. Develop a set of expected cash flows. 2. Estima...

B. Risk Management makes sense for firms directly engaged in activities that involve commodities whose values can be hedged, and it doesn't make much sense for most other firms. Correct Answer Which of the following statements concerning risk management is NOT correct? A. Risk management can reduce the volatility of cash flows, and this decreases the probability of bankruptcy B. Risk Management makes sense for firms directly engaged in activities that involve commodities whose values can be h...

The practice generally known as double taxation is due to Correct Answer corporate incomes being taxed at the corporate level, then again at the shareholder level when corporate profits are paid out as dividends. For corporations, maximizing the value of owner's equity can also be stated as Correct Answer maximizing the stock price. You are evaluating the balance sheet for Cypress Corporation. From the balance sheet you find the following balances: Cash and marketable securities = $600,00...

3 Step Approach to DCF Valuation Correct Answer 1. Develop set of expected cash flows 2. Estimate the discount rate and calculate discount factors 3. Multiply cash flows by discount factors and add them to determine value of asset Decision Rule of Assets Correct Answer If value of asset > price; buy it If value of asset < price; sell it Cash inflows Correct Answer Revenues coming into company as a result of the project Cash outflows Correct Answer Expenses spent by company as a...

Fin 3014-Ch. 6 Bonds-DSM

SANS 301 – GISF QUESTIONS AND ANSWERS ALREADY PASSED Which factor must be held to for a One-Time-Pad to be secure? A. The pad must be as long as the message B. The pad must have a random initialization vector C. The pad must be in ASCII D. The pad must be at least 512 bytes A. The pad must be as long as the message TCP's error correction mechanism relies on the sequence number and which flag? A. RST B. SYN C. ACK D. FIN C. ACK Collecting customer information can be valua...