代写FIN2023 Financial Management Semester 2, 2024-2025 Academic Year Assignment One代做迭代

日期：2025-03-10 05:28

FIN2023 Financial Management

Semester 2, 2024-2025 Academic Year

Assignment One

Due Date: 5pm, March 14, 2025

Question 1 (20 marks)

a. You recently sold 200 shares of Disney stock, and the transfer was made through a broker. Explain whether this is a primary market transaction or a secondary market transaction. (10 marks)

b. If a firm's manager deliberately understates costs and thereby increases profits, what impact will this unethical behavior. have on the firm’s stock price in the short run and in the long run? What other consequences could possibly result from this unethical behavior? (10 marks)

Question 2 (20 marks)

Using the following financial data, complete the missing entries in the balance sheet and income statement:

Total assets turnover: 1.6×

Days sales outstanding: 73 days (Calculation based on a 365-day year)

Inventory turnover ratio: 3×

Quick ratio: 2×

Debt ratio: 70%

Assets	Amount ($)	Liabilities & Equity	Amount ($)
Balance sheet
Cash		Accounts Payable	110,000
Accounts Receivable		Long-Term Debt
Inventories		Common Stock	140,000
Fixed Assets	220,000	Retained Earnings
Total Assets		Total L&E
Income statement items
Sales	960,000	Costs of Goods Sold

Question 3 (20 marks)

Bradley Enterprises is considering two financial plans for next year. Management expects:

- EBIT = $50,000

- Total assets = $200,000

- Tax rate = 30%

Given the company only use debt and equity to finance its asset. Plan A uses 50% debt and 50% equity with an 8% interest rate. Bondholders require a Times Interest Earned (TIE) ratio ≥ 5. Plan B maximizes debt while adhering to the TIE constraint.

Assume all operational metrics, interest rates, and tax rates remain constant.
By how much does the ROE change when switching from Plan A to Plan B?

Question 4 (20 marks)

Your cousin offers to sell you her coffee truck business for $180,000 with "seller financing" at a 12% nominal annual rate (compounded monthly). The loan requires 24 equal monthly payments over 2 years, plus a final balloon payment of $30,000 at the end of the last month to fully repay the loan.

a. What would your monthly payments be? (9 marks)

b. Construct the amortization schedule for the first 3 months. (6 marks)
c. Explain the difference between the nominal interest rate (APR) and the effective annual rate (EAR). Why is the EAR a more accurate measure of the true cost of borrowing? (5 marks)

Question 5 (20 marks)

After graduation, you plan to work for Dynamo Corporation for 12 years and then start your own business. You expect to save and deposit $7,500 annually for the first 6 years (t = 1 through t = 6) and $15,000 annually for the following 6 years (t = 7 through t = 12). The first deposit will be made one year from today. In addition, your grandfather has just given you a $25,000 graduation gift, which you will deposit immediately (t = 0). If the account earns 9% interest compounded annually, how much will you have when you start your business 12 years from now?