【正文】 Chapter 2: Accounting Statements and Cash Flow AssetsCurrent assetsCash$ 4,000Accounts receivable 8,000Total current assets$ 12,000Fixed assetsMachinery$ 34,000Patents 82,000Total fixed assets$116,000Total assets$128,000Liabilities and equityCurrent liabilitiesAccounts payable$ 6,000Taxes payable 2,000Total current liabilities$ 8,000Longterm liabilitiesBonds payable$7,000Stockholders equityCommon stock ($100 par)$ 88,000Capital surplus19,000Retained earnings 6,000Total stockholders equity$113,000Total liabilities and equity$128,000One year agoTodayLongterm debt$50,000,000$50,000,000Preferred stock30,000,00030,000,000Common stock100,000,000110,000,000Retained earnings 20,000,000 22,000,000Total$200,000,000$212,000,000Total Cash Flow of the Stancil CompanyCash flows from the firmCapital spending$(1,000)Additions to working capital (4,000)Total$(5,000)Cash flows to investors of the firmShortterm debt$(6,000)Longterm debt(20,000)Equity (Dividend Financing) 21,000Total$(5,000)[Note: This table isn’t the Statement of Cash Flows, which is only covered in Appendix 2B, since the latter has the change in cash (on the balance sheet) as a final entry.] a. The changes in net working capital can be puted from:Sources of net working capitalNet ine$100Depreciation50Increases in longterm debt 75Total sources$225Uses of net working capitalDividends$50Increases in fixed assets* 150Total uses$200Additions to net working capital$25*Includes $50 of depreciation. b.Cash flow from the firmOperating cash flow$150Capital spending(150)Additions to net working capital (25)Total$(25)Cash flow to the investorsDebt$(75)Equity 50Total$(25)Chapter 3: Financial Markets and Net Present Value: First Principles of Finance (Advanced) $120,000 ($150,000 $100,000) () = $65,000 $40,000 + ($50,000 $20,000) () = $73,600 a. ($7 million + $3 million) () = $ million b. i. They could spend $10 million by borrowing $5 million today. ii. They will have to spend $ million [= $11 million ($5 million x )] at t=1.Chapter 4: Net Present Value a. $1,000 180。 = $1, b. $1,000 180。 = $1, c. $1,000 180。 = $2, d. Interest pounds on the interest already earned. Therefore, the interest earned in part c, $1, is more than double the amount earned in part a, $. Since this bond has no interim coupon payments, its present value is simply the present value of the $1,000 that will be received in 25 years. Note: As will be discussed in the next chapter, the present value of the payments associated with a bond is the price of that bond. PV = $1,000 / = $ PV = $1,500,000 / = $187, a. At a discount rate of zero, the future value and present value are always the same. Remember, FV = PV (1 + r) t. If r = 0, then the formula reduces to FV = PV. Therefore, the values of the options are $10,000 and $20,000, respectively. You should choose the second option. b. Option one: $10,000 / = $9, Option two: $20,000 / = $12, Choose the second option. c. Option one: $10,000 / = $8, Option two: $20,000 / = $8, Choose the first option.d. You are indifferent at the rate that equates the PVs of the two alternatives. You know that rate must fall between 10% and 20% because the option you would choose differs at these rates. Let r be the discount rate that makes you indifferent between the options. $10,000 / (1 + r) = $20,000 / (1 + r)5 (1 + r)4 = $20,000 / $10,000 = 2 1 + r = r = = % The $1,000 that you place in the account at the end of the first year will earn interest for six years. The $1,000 that you place in the account at the end of the second year will earn interest for five years, etc. Thus, the account will have a balance of $1,000 ()6 + $1,000 ()5 + $1,000 ()4 + $1,000 ()3 = $6, PV = $5,000,000 / = $1,609, a. $ ()3 = $1, b. $1,000 [1 + ( / 2)]2 180。 3 = $1,000 ()6 = $1, c. $1,000 [1 + ( / 12)]12 180。 3 = $1,000 ()36 = $1, d. $1,000 180。 3 = $1,e. The future value increases because of the pounding. The account is earning interest on interest. Essentially, the interest is added to the account balance at the end of every pounding period. During the next period, the account earns interest on the new balance. When the pounding period shortens, the balance that earns interest is rising faster. The price of the consol bond is the present value of the coupon payments. Apply the perpetuity formula to find the present value. PV = $120 / = $800 a. $1,000 / = $10,000b. $500 / = $5,000 is the value one year from now of the perpetual stream. Thus, the value of the perpetuity is $5,000 / = $4,. c. $2,420 / = $24,200 is the value two years from now of the perpetual stream. Thus, the value of the perpetuity is $24,200 / = $20,000. Apply the NPV technique. Since the inflows are an annuity you can use the present value of an annuity factor. NPV = $6,200 + $1,200 = $6,200 + $1,200 () = $ Yes, you should buy the asset. Use an annuity factor to pute the value two years from today of the twenty payments. Remember, the annuity formula gives you the value of the stream one year before the first payment. Hence, the annuity factor will give you the value at the end of year two of the stream of payments. Value at the end of year two = $2,000 = $2,000 () = $19, The present value is simply that amount discounted back two years. PV = $19, / = $16, The easiest way to do this problem is to use the annuity factor. The annuity factor must be equal to $12,800 / $2,000 = 。 remember PV =C ATr. The annuity factors are in the appendix to the text. To use the factor table to s