Assessment Task – Tutorial Questions

Unit Code: HI5002

Unit Name: Finance for Business

Assignment: Tutorial Questions 1

Due: 11:30pm 22nd May 2020

Weighting: 25%

Total Assignment Marks: 50 marks

Purpose: This assignment is designed to assess your level of knowledge of the key topics covered in this unit

Unit Learning Outcomes Assessed: 1, 2, 3

Description: Each week students were provided with three tutorial questions of varying degrees of difficulty. These tutorial questions are available in the Tutorial Folder for each week on Blackboard. The Interactive Tutorials are designed to assist students with the process, skills and knowledge to answer the provided tutorial questions. Your task is to answer a selection of tutorial questions for weeks 1 to 5 inclusive and submit these answers in a single document.

The questions to be answered are;

Week 1

What are the five basis principles of finance? Briefly explain them (no more than 250 words). (10 marks)

Week 2

Little Book LTD has total assets of $860,000. There are 75,000 shares of stock outstanding, total book value of $750,000 with a market value of $12 a share. The firm has a profit margin of 6.5% and a total asset turnover of 1.5.

Required:

a) Calculate the company’s EPS? (6 marks)

b) What is the market –to- book ratio? (4 marks)

Week 3

Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an additional $20,000 to that account. You earned 8%, compounded semi-annually, for the first ten years, and 6.5%, compounded annually, for the last five years.

Required:

a) What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years? (2 marks)

b) How much money do you have in your account today? (4 marks)

c) If you wish to have $85,000 now, how much should you have invested 15 years ago? (4 marks)

Week 4

Giant Equipment Ltd. is considering two projects to invest next year. Both projects have the same start-up costs. Project A will produce annual cash flows of $42,000 at the beginning of each year for eight years. Project B will produce cash flows of $48,000 at the end of each year for seven years. The company requires a 12% return.

Required:

a) Which project should the company select and why? (5 marks)

b) Which project should the company select if the interest rate is 14% at the cash flows in Project B is also at the beginning of each year? (5 marks)

Week 5

Rachel is a financial investor who actively buys and sells in the securities market. Now she has a portfolio of all blue chips, including: $13,500 of Share A, $7,600 of Share B, $14,700 of Share C, and $5,500 of Share D.

Required:

a) Compute the weights of the assets in Rachel’s portfolio? (2 marks)

b) If Rachel’s portfolio has provided her with returns of 9.7%, 12.4%, -5.5% and 17.2% over the past four years, respectively. Calculate the geometric average return of the portfolio for this period. (2 marks)

c) Assume that expected return of the stock A in Rachel’s portfolio is 13.6% this year. The risk premium on the stocks of the same industry are 4.8%, betas of these stocks is 1.5 and the inflation rate was 2.7%. Calculate the risk-free rate of return using Capital Market Asset Pricing Model

(CAPM). (2 marks)

d) Following is forecast for economic situation and Rachel’s portfolio returns next year, calculate the expected return, variance and standard deviation of the portfolio. (4 marks)

State of economy Probability Rate of returns

Mild Recession 0.35 - 5%

Growth 0.45 15%

Strong Growth 0.20 30%

Submission Directions:

The assignment has to be submitted via Blackboard. Each student will be permitted one submission to Blackboard only. Each student needs to ensure that the document submitted is the correct one.

Academic Integrity

Academic honesty is highly valued at Holmes Institute. Students must always submit work that represents their original words or ideas. If any words or ideas used in a class posting or assignment submission do not represent the student’s original words or ideas, the student must cite all relevant sources and make clear the extent to which such sources were used. Written assignments that include material similar to course reading materials or other sources should include a citation including source, author, and page number.

In addition, written assignments that are similar or identical to those of another student in the class is also a violation of the Holmes Institute’s Academic Conduct and Integrity Policy. The consequence for a violation of this policy can incur a range of penalties varying from a 50% penalty through to suspension of enrolment. The penalty would be dependent on the extent of academic misconduct and the student’s history of academic misconduct issues. All assessments will be automatically submitted to SafeAssign to assess their originality.

Further Information:

For further information and additional learning resources, students should refer to their Discussion Board for the unit.

Unit Code: HI5002

Unit Name: Finance for Business

Assignment: Tutorial Questions 1

Due: 11:30pm 22nd May 2020

Weighting: 25%

Total Assignment Marks: 50 marks

Purpose: This assignment is designed to assess your level of knowledge of the key topics covered in this unit

Unit Learning Outcomes Assessed: 1, 2, 3

Description: Each week students were provided with three tutorial questions of varying degrees of difficulty. These tutorial questions are available in the Tutorial Folder for each week on Blackboard. The Interactive Tutorials are designed to assist students with the process, skills and knowledge to answer the provided tutorial questions. Your task is to answer a selection of tutorial questions for weeks 1 to 5 inclusive and submit these answers in a single document.

The questions to be answered are;

Week 1

What are the five basis principles of finance? Briefly explain them (no more than 250 words). (10 marks)

Week 2

Little Book LTD has total assets of $860,000. There are 75,000 shares of stock outstanding, total book value of $750,000 with a market value of $12 a share. The firm has a profit margin of 6.5% and a total asset turnover of 1.5.

Required:

a) Calculate the company’s EPS? (6 marks)

b) What is the market –to- book ratio? (4 marks)

Week 3

Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an additional $20,000 to that account. You earned 8%, compounded semi-annually, for the first ten years, and 6.5%, compounded annually, for the last five years.

Required:

a) What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years? (2 marks)

b) How much money do you have in your account today? (4 marks)

c) If you wish to have $85,000 now, how much should you have invested 15 years ago? (4 marks)

Week 4

Giant Equipment Ltd. is considering two projects to invest next year. Both projects have the same start-up costs. Project A will produce annual cash flows of $42,000 at the beginning of each year for eight years. Project B will produce cash flows of $48,000 at the end of each year for seven years. The company requires a 12% return.

Required:

a) Which project should the company select and why? (5 marks)

b) Which project should the company select if the interest rate is 14% at the cash flows in Project B is also at the beginning of each year? (5 marks)

Week 5

Rachel is a financial investor who actively buys and sells in the securities market. Now she has a portfolio of all blue chips, including: $13,500 of Share A, $7,600 of Share B, $14,700 of Share C, and $5,500 of Share D.

Required:

a) Compute the weights of the assets in Rachel’s portfolio? (2 marks)

b) If Rachel’s portfolio has provided her with returns of 9.7%, 12.4%, -5.5% and 17.2% over the past four years, respectively. Calculate the geometric average return of the portfolio for this period. (2 marks)

c) Assume that expected return of the stock A in Rachel’s portfolio is 13.6% this year. The risk premium on the stocks of the same industry are 4.8%, betas of these stocks is 1.5 and the inflation rate was 2.7%. Calculate the risk-free rate of return using Capital Market Asset Pricing Model

(CAPM). (2 marks)

d) Following is forecast for economic situation and Rachel’s portfolio returns next year, calculate the expected return, variance and standard deviation of the portfolio. (4 marks)

State of economy Probability Rate of returns

Mild Recession 0.35 - 5%

Growth 0.45 15%

Strong Growth 0.20 30%

Submission Directions:

The assignment has to be submitted via Blackboard. Each student will be permitted one submission to Blackboard only. Each student needs to ensure that the document submitted is the correct one.

Academic Integrity

Academic honesty is highly valued at Holmes Institute. Students must always submit work that represents their original words or ideas. If any words or ideas used in a class posting or assignment submission do not represent the student’s original words or ideas, the student must cite all relevant sources and make clear the extent to which such sources were used. Written assignments that include material similar to course reading materials or other sources should include a citation including source, author, and page number.

In addition, written assignments that are similar or identical to those of another student in the class is also a violation of the Holmes Institute’s Academic Conduct and Integrity Policy. The consequence for a violation of this policy can incur a range of penalties varying from a 50% penalty through to suspension of enrolment. The penalty would be dependent on the extent of academic misconduct and the student’s history of academic misconduct issues. All assessments will be automatically submitted to SafeAssign to assess their originality.

Further Information:

For further information and additional learning resources, students should refer to their Discussion Board for the unit.

This above price is for already used answers. Please do not submit them directly as it may lead to plagiarism. Once paid, the deal will be non-refundable and there is no after-sale support for the quality or modification of the contents. Either use them for learning purpose or re-write them in your own language. If you are looking for new unused assignment, please use live chat to discuss and get best possible quote.

I need it done as soon as possible pleasei just want to know how to apply the model using PML package in RIFN561: Enterprise Systems Lifecycle ManagementAssessment Task 2Assessment Task 2Task overviewAssessment name: Request for Proposal (RFP)Task description: The objective for this assignment is to build...ET 515 Exam #1Create a Power Point presentation explaining the process to change a tire on a standard automobile. Pretend your tire has gone flat and you must change the tire along the side of a deserted...Hi,Just let you know that for my assignment, its okay to be done without any references and its also dont need to be that academic style.Thank youAssessment Tasks and InstructionsStudent NameStudent NumberCourse...BUS368Innovation Management and DigitalTransformationTutor-Marked AssignmentJuly 2022 PresentationBUS368 Tutor-Marked AssignmentSINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 2 of 5TUTOR-MARKED ASSIGNMENT...The student should present his/her work for each section using both text and images.The sources can be from class lectures, assignments, etc., or from other sources. Don't forget to cite the sources.One...**Show All Questions**