课程名称︰财务管理
课程性质︰必修
课程教师︰胡星阳
开课学院：管理学院
开课系所︰财金系
考试日期（年月日）︰103/4/30
考试时限（分钟）：180分钟
是否需发放奖励金：是
（如未明确表示，则不予发放）
试题 :
1. (10 points)
The 2013 financial statements for Xporter, Inc., are shown here.
Income statement │ Balance sheet
─────────────┼─────────────────────────
Sales $5,700 │Current assets $4,200 Current liability $2,200
Costs __2,200__│Fixed assets __7,800__ Long-term debt 3,750
EBIT $3,500 │ Total $12,000 Equity __$6,050__
Interest expense ____500__│ Total $12,000
Taxable income $3,000 │
Taxes(40%) __1,200__│
Net income $1,800 │
Dividends $540 │
Sales for 2014 are projected to grow by 20%.
Interest expense will remain constant; the tax rate and the dividend payout
rate will also remain constant.
Costs, current assets, fixed assets and current liability increase
simultaneously with sales.
If the firm is operating at full capacity and no new debt or equity is issued,
a. What's the projected net income in year 2014?
b. What's the addition to retained earnings and equity in year 2014?
c. What external financing is needed to support the 20% growth in sales?
2. (5 points)
Suppose you are commited to owning a $100,000 Ferrari. If you believe your
mutual fund can achieve 10% semi-annual return and you want to buy the car in 2
years. How much must you invest today?
3. (10 points)
Consider the following two mutually exclusive projects:
You require a 10% return on your investment.
┌──┬───────┬──────┐
│Year│Cash Flow(A) │Cash Flow(B)│
├──┼───────┼──────┤
│ 0 │ -$48,000 │ -$12,000 │
├──┼───────┼──────┤
│ 1 │ 20,000 │ 6,000 │
├──┼───────┼──────┤
│ 2 │ 25,000 │ 8,000 │
├──┼───────┼──────┤
│ 3 │ 30,000 │ 10,000 │
└──┴───────┴──────┘
a. If you apply the payback criterion, which project will you choose? Why?
b. If you apply the NPV criterion, which project will you choose? Why?
c. The IRR of project A and B are 24.16% and 40.07% respectively and the
crossover rate for these two projects is 18.4%
Over what range of discount rates would the company choose project A?
Project B?
4. (15 points)
Your firm is considering a new three-year project that requires an initial
fixed asset investment of $300,000. This fixed asset will be depreciated
straight-line to zero over the project's life and assume a salvage life of
$30,000. It also requires an initial investment in net working capital of
$50,000.
The project is estimated to generate $670,000 in annual sales, with cost of
$520,000. If the tax rate is 30% and your discount rate is 10%, please answer
the following questions.
a. What's the OCF for this project?
b. What's the after-tax salvage value of the fixed asset?
c. What's the cash flow from working capital?
┌────────┬───┬───┬───┬───┐
│Year │ 0 │ 1 │ 2 │ 3 │
├────────┼───┼───┼───┼───┤
│Working capital │ │ │ │ │
└────────┴───┴───┴───┴───┘
d. What's the cash flow from fixed asset investment and it's after-tax salvage
value?
┌──────────┬───┬───┬───┬───┐
│Year │ 0 │ 1 │ 2 │ 3 │
├──────────┼───┼───┼───┼───┤
│Fixed asset & after-│ │ │ │ │
│tax salvage value │ │ │ │ │
└──────────┴───┴───┴───┴───┘
e. Complete the following table and calculate the NPV of this project.
┌──────────┬───┬───┬───┬───┐
│Year │ 0 │ 1 │ 2 │ 3 │
├──────────┼───┼───┼───┼───┤
│Fixed asset & after-│ │ │ │ │
│tax salvage value │ │ │ │ │
├──────────┼───┼───┼───┼───┤
│Working capital │ │ │ │ │
├──────────┼───┼───┼───┼───┤
│OCF │ │ │ │ │
├──────────┼───┼───┼───┼───┤
│Total cash flow │ │ │ │ │
└──────────┴───┴───┴───┴───┘
5. (10 points)
Consider a project to generate $50,000 operating cash flow per year to your
company over the next three years. You have an idle parcel of land available
that costs $200,000 two years ago. If the land were sold today, it would net
you 100,000 aftertax. The land can be sold for 80,000 after taxes in three
years. If the required rate of return on this project is 12%.
a. Complete the cash flow table.
┌────────┬───┬───┬───┬───┐
│Year │ 0 │ 1 │ 2 │ 3 │
├────────┼───┼───┼───┼───┤
│Land │ │ │ │ │
├────────┼───┼───┼───┼───┤
│OCF │ │ │ │ │
├────────┼───┼───┼───┼───┤
│Total Cash Flow │ │ │ │ │
└────────┴───┴───┴───┴───┘
b. What's the NPV of this project and whether you should invest this project or
not?
6. (10 points)
Consider a four-year project with the following information:
Initial fixed asset investment $360,000; straight-line depreciation to zero
over the four-year life; zero salvage value.
Price per unit will be $25, variable cost per unit will be $16; fixed costs
will be $180,000 per year. The required return on the project is 10%, and the
relevant tax rate is 0%.
a. What's the accounting break-even level of output for this project? What's
the degree of operating leverage at the accounting break-even point?
b. If the units sold increase 3000 units from the accounting break-even level.
Use the degree of operating leverage in question (a) to calculate what will
be the increase in operating cash flow?
7. (8 points)
True and false. Please first write out the answer (true or false) then provide
brief explanations that cannot exceed five lines.
When you evaluate an investment project that will be partially financed by bank
borrowing, the cash flow calculated for each period should deduct the expected
interest expense.
8. (8 points)
True and false. Please first write out the answer (true or false) then provide
brief explanations that cannot exceed five lines.
The PE ratios are 20 for stock A and 15 for stock B. You will choose to buy
stock B because it is cheaper.
9. (10 points)
In the constant growth rate fundamental valuation model of stock price, the
growth rate must be lower than the shareholders' required rate of return. Why?
How can we use such an unrealistic model for high growth companies like Apple?
10. (14 points)
You are invited to provide the cost of capital to a private company Yummy Food.
Please provide the procedure you will take to get the number.