《财务管理基础第13版》相关章节答案.ppt

Van Horne and Wachowicz,Fundamentals of Financial Management,13th edition,Instructors ManualContents,Chapters,Pages,1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.19.20.21.22.23.24.,The Role of Financial ManagementThe Business,Tax,and Financial EnvironmentsThe Time Value of Money*The Valuation of Long-term Securities*Risk and Return*Financial Statement Analysis*Funds Analysis,Cash-flow Analysis,and Financial Planning*Overview of Working-capital ManagementCash and Marketable Securities ManagementAccounts Receivable and Inventory ManagementShort-term FinancingCapital Budgeting and Estimating Cash FlowsCapital Budgeting TechniquesRisk and Managerial(Real)Options in Capital Budgeting(some sections may be omitted in an abbreviated course)Required Returns and the Cost of CapitalOperating and Financial Leverage(may be omitted in an abbreviated course)Capital Structure DeterminationDividend PolicyThe Capital MarketLong-term Debt,Preferred Stock,and Common StockTerm Loans and Leases(may be omitted in an abbreviated course)Convertibles,Exchangeables,and WarrantsMergers and Other Forms of Corporate RestructuringInternational Financial Management,9121932414961828893105112120134144157174184195201213225234251,*Note:Some instructors prefer to cover Chapters 6 and 7 before going into Chapters 3-5.Thesechapters have been written so that this can be done without any problem.本课程涉及的章节3 Pearson Education Limited 2008,Chapter 1Chapter 3Chapter 4Chapter 5Chapter 6Chapter 15Chapter 16Chapter 17,THE ROLE OF FINANCIAL MANAGEMENTTHE TIME VALUE OF MONEY*THE VALUATION OF LONG-TERM SECURITIES*RISK AND RETURN*FINANCIAL STATEMENT ANALYSIS*REQUIRED RETURNS AND THE COST OF CAPITALOPERATING AND FINANCIAL LEVERAGECAPITAL STRUCTURE DETERMINATION,The Role of Financial Management,Increasing shareholder value over time is the bottom lineof every move we make.,ROBERT GOIZUETAFormer CEO,The Coca-Cola Company,9,Pearson Education Limited 2008,Chapter 1:The Role of Financial Management,ANSWERS TO QUESTIONS,1.With an objective of maximizing shareholder wealth,capital will tend to be allocated to themost productive investment opportunities on a risk-adjusted return basis.Other decisionswill also be made to maximize efficiency.If all firms do this,productivity will beheightened and the economy will realize higher real growth.There will be a greater level ofoverall economic want satisfaction.Presumably people overall will benefit,but this dependsin part on the redistribution of income and wealth via taxation and social programs.In otherwords,the economic pie will grow larger and everybody should be better off if there is noreslicing.With reslicing,it is possible some people will be worse off,but that is the result ofa governmental change in redistribution.It is not due to the objective function ofcorporations.,2.Maximizing earnings is a nonfunctional objective for the following reasons:,a.Earnings is a time vector.Unless one time vector of earnings clearly dominates all other,time vectors,it is impossible to select the vector that will maximize earnings.,b.Each time vector of earning possesses a risk characteristic.Maximizing expected,earnings ignores the risk parameter.,c.Earnings can be increased by selling stock and buying treasury bills.Earnings will,continue to increase since stock does not require out-of-pocket costs.,d.The impact of dividend policies is ignored.If all earnings are retained,future earningsare increased.However,stock prices may decrease as a result of adverse reaction to theabsence of dividends.,Maximizing wealth takes into account earnings,the timing and risk of these earnings,andthe dividend policy of the firm.,3.Financial management is concerned with the acquisition,financing,and management ofassets with some overall goal in mind.Thus,the function of financial management can bebroken down into three major decision areas:the investment,financing,and assetmanagement decisions.,4.Yes,zero accounting profit while the firm establishes market position is consistent with themaximization of wealth objective.Other investments where short-run profits are sacrificedfor the long-run also are possible.,5.The goal of the firm gives the financial manager an objective function to maximize.He/shecan judge the value(efficiency)of any financial decision by its impact on that goal.Withoutsuch a goal,the manager would be at sea in that he/she would have no objective criterionto guide his/her actions.,6.The financial manager is involved in the acquisition,financing,and management of assets.These three functional areas are all interrelated(e.g.,a decision to acquire an assetnecessitates the financing and management of that asset,whereas financing andmanagement costs affect the decision to invest).,7.If managers have sizable stock positions in the company,they will have a greaterunderstanding for the valuation of the company.Moreover,they may have a greaterincentive to maximize shareholder wealth than they would in the absence of stock holdings.However,to the extent persons have not only human capital but also most of their financial,10,Pearson Education Limited 2008,Van Horne and Wachowicz,Fundamentals of Financial Management,13th edition,Instructors Manual,capital tied up in the company,they may be more risk averse than is desirable.If thecompany deteriorates because a risky decision proves bad,they stand to lose not only theirjobs but have a drop in the value of their assets.Excessive risk aversion can work to thedetriment of maximizing shareholder wealth as can excessive risk seeking,if the manager isparticularly risk prone.,8.Regulations imposed by the government constitute constraints against which shareholderwealth can still be maximized.It is important that wealth maximization remain the principalgoal of firms if economic efficiency is to be achieved in society and people are to haveincreasing real standards of living.The benefits of regulations to society must be evaluatedrelative to the costs imposed on economic efficiency.Where benefits are small relative tothe costs,businesses need to make this known through the political process so that theregulations can be modified.Presently there is considerable attention being given inWashington to deregulation.Some things have been done to make regulations less onerousand to allow competitive markets to work.,9.As in other things,there is a competitive market for good managers.A company must paythem their opportunity cost,and indeed this is in the interest of stockholders.To the extentmanagers are paid in excess of their economic contribution,the returns available toinvestors will be less.However,stockholders can sell their stock and invest elsewhere.Therefore,there is a balancing factor that works in the direction of equilibrating managerspay across business firms for a given level of economic contribution.,10.In competitive and efficient markets,greater rewards can be obtained only with greater risk.The financial manager is constantly involved in decisions involving a trade-off between thetwo.For the company,it is important that it do well what it knows best.There is littlereason to believe that if it gets into a new area in which it has no expertise that the rewardswill be commensurate with the risk that is involved.The risk-reward trade-off will becomeincreasingly apparent to the student as this book unfolds.,11.Corporate governance refers to the system by which corporations are managed andcontrolled.It encompasses the relationships among a companys shareholders,board ofdirectors,and senior management.These relationships provide the framework within whichcorporate objectives are set and performance is monitored.,The board of directors sets company-wide policy and advises the CEO and other seniorexecutives,who manage the companys day-to-day activities.The Board reviews andapproves strategy,significant investments,and acquisitions.The board also overseesoperating plans,capital budgets,and the companys financial reports to commonshareholders.,12.The controllers responsibilities are primarily accounting in nature.Cost accounting,as wellas budgets and forecasts,would be for internal consumption.External financial reportingwould be provided to the IRS,the SEC,and the stockholders.,The treasurers responsibilities fall into the decision areas most commonly associated withfinancial management:investment(capital budgeting,pension management),financing(commercial banking and investment banking relationships,investor relations,dividenddisbursement),and asset management(cash management,credit management).,11,Pearson Education Limited 2008,The Time Value of Money,The chief value of money lies in the fact that one lives ina world in which it is overestimated.,H.L.MENCKENFrom A Mencken Chrestomathy,19,Pearson Education Limited 2008,Chapter 3:The Time Value of Money,ANSWERS TO QUESTIONS,1.Simple interest is interest that is paid(earned)on only the original amount,or principal,borrowed(lent).,2.With compound interest,interest payments are added to the principal and both then earninterest for subsequent periods.Hence interest is compounded.The greater the number ofperiods and the more times a period interest is paid,the greater the compounding and futurevalue.,3.The answer here will vary according to the individual.Common answers include a savings,account and a mortgage loan.,4.An annuity is a series of cash receipts of the same amount over a period of time.It is worthless than a lump sum equal to the sum of the annuities to be received because of the timevalue of money.,5.Interest compounded continuously.It will result in the highest terminal value possible for a,given nominal rate of interest.,6.In calculating the future(terminal)value,we need to know the beginning amount,theinterest rate,and the number of periods.In calculating the present value,we need to knowthe future value or cash-flow,the interest or discount rate,and the number of periods.Thus,there is only a switch of two of the four variables.,7.They facilitate calculations by being able to multiply the cash-flow by the appropriate,discount factor.Otherwise,it is necessary to raise 1 plus the discount rate to the nth power,and divide.Prior to electronic calculators,the latter was quite laborious.With the advent ofcalculators,it is much easier and the advantage of present value tables is lessened.,8.Interest compounded as few times as possible during the five years.Realistically,it is likely,to be at least annually.Compounding more times will result in a lower present value.,9.For interest rates likely to be encountered in normal business situations the Rule of 72 isa pretty accurate money doubling rule.Since it is easy to remember and involves acalculation that can be done in your head,it has proven useful.,10.Decreases at a decreasing rate.The present value equation,1/(1+i)n,is such that as you,divide 1 by increasing(linearly)amounts of i,present value decreases towards zero,but at adecreasing rate.,11.Decreases at a decreasing rate.The denominator of the present value equation increases at,an increasing rate with n.Therefore,present value decreases at a decreasing rate.,12.A lot.Turning to FVIF Table 3.3 in the chapter and tracing down the 3 percent column to25 years,we see that he will increase his weight by a factor of 2.09 on a compound basis.This translates into a weight of about 418 pounds at age 60.,20,Pearson Education Limited 2008,n n,=,5,=,=,=,=,=,=,=,mn,Van Horne and Wachowicz,Fundamentals of Financial Management,13th edition,Instructors ManualSOLUTIONS TO PROBLEMS1.a.FVn=P0(1+i)n,(i)FV3=$100(2.0)3=$100(8)(ii)FV3=$100(1.10)3=$100(1.331)(iii)FV3=$100(1.0)3=$100(1),=$800=$133.10=$100,b.FVn=P0(1+i);FVAn=R(1+i 1)/i,(i)FV5=$500(1.10)5=$500(1.611)FVA5=$100(1.105 1)/(0.10)=$100(6.105)(ii)FV5=$500(1.05)=$500(1.276)FVA5=$100(1.055 1)/(0.05)=$100(5.526)(iii)FV5=$500(1.0)5=$500(1)FVA5=$100(5)*,=$805.50610.50$1,416.00=$638.00552.60$1,190.60=$500.00500.00,$1,000.00*Note:We had to invoke lHospitals rule in the special case where i=0;in short,FVIFAn=n when i=0.c.FVn=P0(1+i)n;FVADn=R(1+in 1)/i1+i,(i)FV6=$500(1.10)6=$500(1.772)FVAD5=$100(1.105 1)/(.10)1.10=$100(6.105)(1.10)=(ii)FV6=$500(1.05)6=$500(1.340)FVAD5=$100(1.05 5 1)/(0.05)1.05=$100(5.526)(1.05)(iii)FV6=$500(1.0)6=$500(1)FVAD5=$100(5),$886.00671.55$1,557.55$670.00580.23$1,250.23$500.00500.00,$1,000.00d.FVn=PV0(1+i/m),(i)FV3=$100(1+1/4)12=$100(14.552)(ii)FV3=$100(1+0.10/4)12=$100(1.345),=$1,455.20=$134.50,21 Pearson Education Limited 2008,f.,=,3,=,n,=,=,=,n,=,3,=,2,=,3,=,1,=,2,1,=,=,3,=,Chapter 3:The Time Value of Moneye.The more times a year interest is paid,the greater the future value.It is particularlyimportant when the interest rate is high,as evidenced by the difference in solutionsbetween Parts 1.a.(i)and 1.d.(i).FVn=PV0(1+i/m)mn;FVn=PV0(e)in(i)$100(1+0.10/1)10=$100(2.594)=$259.40(ii)$100(1+0.10/2)20=$100(2.653)=$265.30(iii)$100(1+0.10/4)40=$100(2.685)=$268.50(iv)$100(2.71828)1=$271.832.a.P0=FVn1/(1+i)n,(i)$1001/(2)3=$100(0.125)(ii)$1001/(1.10)=$100(0.751),$12.50$75.10,(iii)$1001/(1.0)3=$100(1)b.PVAn=R(1 1/(1+i)/i,=,$100,(i)$500(1 1/(1+.04)3)/0.04=(ii)$500(1 1/(1+0.25)3)/0.25c.P0=FVn1/(1+i),$500(2.775)$500(1.952),$1,387.50$976.00,(i)$1001/(1.04)1=$100(0.962)5001/(1.04)2=500(0.925)1,0001/(1.04)=1,000(0.889),=$,96.20462.50889.00,$1,447.70,(ii)$1001/(1.25)1=$100(0.800)5001/(1.25)=500(0.640)1,0001/(1.25)=1,000(0.512),=$,80.00320.00512.00,$912.00,d.(i)$1,0001/(1.04),$1,000(0.962)=$962.00,5001/(1.04)1001/(1.04)3,=,500(0.925)100(0.889),=,462.5088.90,$1,513.40,(ii)$1,0001/(1.25)=$1,000(0.800)5001/(1.25)2=500(0.640)1001/(1.25)=100(0.512),$800.00320.0051.20,$1,171.20e.The fact that the cash flows are larger in the first period for the sequence in Part(d)results in their having a higher present value.The comparison illustrates the desirabilityof early cash flows.22 Pearson Education Limited 2008,1,4,5,6,1,2,3,4,5,Van Horne and Wachowicz,Fundamentals of Financial Management,13th edition,Instructors Manual3.$25,000=R(PVIFA6%,12)=R(8.384)R=$25,000/8.384=$2,9824.$50,000=R(FVIFA8%,10)=R(14.486)R=$50,000/14.486=$3,4525.$50,000=R(FVIFA8%,10)(1+0.08)=R(15.645)R=$50,000/15.645=$3,1966.$10,000=$16,000(PVIFx%,3)(PVIFx%,3)=$10,000/$16,000=0.625Going to the PVIF table at the back of the book and looking across the row for n=3,wefind that the discount factor for 17 percent is 0.624 and that is closest to the number above.7.$10,000=$3,000(PVIFAx%,4)(PVIFAx%,4)=$10,200/$3,000=3.4 Going to the PVIFAtable at the back of the book and looking across the row for n=4,we find that the discountfactor for 6 percent is 3.465,while for 7 percent it is 3.387.Therefore,the note has animplied interest rate of almost 7 percent.,8.Year,Sales,$600,000,=,$500,000(1.2),23,720,000864,0001,036,8001,244,1601,492,992,=,600,000(1.2)720,000(1.2)864,000(1.2)1,036,800(1.2)1,244,160(1.2),9.,Present Value,Year110(annuity)15(annuity),Amount$1,2002,0002,4001,9001,600Subtotal(a)1,4001,400Subtotal(b),Factor at 14%0.8770.7690.6750.5920.519.5.2163.433.,Present Valu