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FIN 571 Complete Week 4 - NEW

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FIN 571 Week 4 DQ 1 NEW


We can determine the value of an investment at the end of one period (whether it is a month, quarter or year)
if we know the interest rate to be earned by the investment. If you invest for one period (single period
investment) at an interest rate of i, your investment, or principal, will grow by (1 + i) per dollar invested. The
term (1+ i) is the future value interest factor--often called simply the future value factor.
How can we determine the value of a two period investment what components are included in the
calculation?

FIN 571 Week 4 DQ 2 NEW


Explain what the time value of money is and why it is important in the field of finance.

FIN 571 Week 4 Individual Analyzing Pro Forma Statements NEW


Decide upon an initiative you want to implement that would increase sales over the next five years, (for
example, market another product, corporate expansion, and so on).
Using the sample financial statements, create pro forma statements of five year projections that are clear,
concise, and easy to read. Be sure to double check the calculations in your pro forma statements. Make
assumptions that support each line item increase or decrease for your forecasted statements.
Discuss and interpret the financials in relation to the initiative. Make recommendations on potential
discretionary financing needs.
Write a 350 - 700 word analysis of the company's short term and long term financing needs and determine
strategies for the company to manage working capital.
Click the Assignment Files tab to submit your assignment.

FIN 571 Week 4 Learning Team Reflection NEW


Watch the "Concept Review Video: Stock Valuation" video located in the WileyPLUS Assignment: Week 4
Videos Activity.
Discuss how markets and investors value a stock.
Write a 350-700 word summary of your discussion.
Click the Assignment Files tab to submit your assignment.

FIN 571 Week 4 WileyPLUS Practice Quiz NEW


Multiple Choice Question 66
Present value: Tommie Harris is considering an investment that pays 6.5 percent annually. How much must
he invest today such that he will have $25,000 in seven years? (Round to the nearest dollar.)

$38,850
$23,474
$16,088
$26,625

Multiple Choice Question 61


PV of multiple cash flows: Jack Stuart has loaned money to his brother at an interest rate of 5.75 percent. He
expects to receive $625, $650, $700, and $800 at the end of the next four years as complete repayment of the
loan with interest. How much did he loan out to his brother? (Round to the nearest dollar.)
$2,250
$2,545
$2,713
$2,404

Multiple Choice Question 63


PV of multiple cash flows: Hassan Ali has made an investment that will pay him $11,455, $16,376, and
$19,812 at the end of the next three years. His investment was to fetch him a return of 14 percent. What is the
present value of these cash flows? (Round to the nearest dollar.)
$33,124
$36,022
$41,675
$39,208

Multiple Choice Question 65


PV of multiple cash flows: Pam Gregg is expecting cash flows of $50,000, $75,000, $125,000, and $250,000
from an inheritance over the next four years. If she can earn 11 percent on any investment that she makes,
what is the present value of her inheritance? (Round to the nearest dollar.)
$361,998
$309,432
$434,599
$412,372

Multiple Choice Question 66


Present value of an annuity: Transit Insurance Company has made an investment in another company that
will guarantee it a cash flow of $37,250 each year for the next five years. If the company uses a discount rate
of 15 percent on its investments, what is the present value of this investment? (Round to the nearest dollar.)
$186,250
$101,766
$124,868
$251,154

Multiple Choice Question 71


Future value of an annuity: Carlos Menendez is planning to invest $3,500 every year for the next six years in
an investment paying 12 percent annually. What will be the amount he will have at the end of the six years?
(Round to the nearest dollar.)
$28,403
$24,670
$26,124
$21,000

Multiple Choice Question 61


Bond price: Briar Corp is issuing a 10-year bond with a coupon rate of 7 percent. The interest rate for similar
bonds is currently 9 percent. Assuming annual payments, what is the present value of the bond? (Round to
the nearest dollar.)
$990
$872
$1,066
$945

Multiple Choice Question 56


PV of dividends: Cortez, Inc., is expecting to pay out a dividend of $2.50 next year. After that it expects its
dividend to grow at 7 percent for the next four years. What is the present value of dividends over the next
five-year period if the required rate of return is 10 percent?
$10.76
$11.50
$9.80
$11.88

Multiple Choice Question 59


PV of dividends: Givens, Inc., is a fast growing technology company that paid a $1.25 dividend last week. The
company's expected growth rates over the next four years are as follows: 25 percent, 30 percent, 35 percent,
and 30 percent. The company then expects to settle down to a constant-growth rate of 8 percent annually. If
the required rate of return is 12 percent, what is the present value of the dividends over the fast growth
phase?
$6.46
$7.24
$8.37
$1.25

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