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THE UNIVERSITY OF NEW SOUTH WALES
AUSTRALIAN SCHOOL OF BUSINESS
SCHOOL OF BANKING AND FINANCE
FINS1613: BUSINESS FINANCE
SEMESTER 1 2012
FINAL EXAM
1. TIME ALLOWED – 3 hours
2. THIS EXAMINATION PAPER HAS 19 PAGES
3. TOTAL NUMBER OF QUESTIONS – 45 Multiple Choice
4. TOTAL MARKS AVAILABLE – 45
5. MULTIPLE CHOICE QUESTIONS ARE 1 (ONE) MARK PER QUESTION.
6. THE EXAMINATION PAPER HAS 1 PART.
a. You must complete a Generalised Answer Sheet for this exam
b. Complete the top portion of the generalized answer
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b.
At any point in time, the price of two equivalent goods trading in different competitive markets will be the same.
c.
If equivalent goods or securities trade simultaneously in different competitive markets, then they will trade for the same price in both markets.
d.
An important property of the Law of One Price is that it holds even in markets where arbitrage is not possible.
e.
All of the above are correct
3 of 19
7. The table provides information on the current price and future cash flows from three risk free bonds. According to the Law of One Price, what must be the price of Bond C in competitive markets?
Bond
Price
Payments
Year 1 Year 2
A
115
?
0
100
$164.00
$84.03
e.
15
$9.84
d.
$104.64
$64.05
c.
109
C
b.
9
B
a.
$94.80
$80.03
8. What is the net present value of the following cash flows discounted at 12%?
Payments
Year
Cash flow
a.
14.16
27.79
$13.32
e.
-$28.63
$6.17
d.
2
$7.74
c.
1
$8.83
b.
0
$34.80
9. What is the present value of an 8-year annuity that makes quarterly payments of $73 if the discount rate is 3.5% annual percentage rate (APR)?
a.
b.
$501.80
c.
$1,392.03
d.
$2,007.20
| The business itself does not retain any profits. 100% of profits remain with the owner and is considered personal income.
Identify legislation and policies which are designed to promote the human rights,inclusion equal ife chances and citizenship of individuals with learning disabilities
The cost of quality in a manufacturing process and environment are many as you are aware. But the 3 primary costs that we should review on a more regular basis to assure we are creating the most cost effective and quality products are the following: Appraisal, Prevention and Failure, and failure costs should be looked at as internal failure and external failure.
The manager will need to ensure that they have the correct level of rapport with their employee. Too familiar in nature may be misconstrued as forward and harassing in the wrong context. However no personal rapport whatsoever may provide the receiver of the information with the impression that the sender of the information is just not interested. A fine line must be weighed up for each individual. When a good rapport has been achieved, then the person will uncritically accept suggestion or advice which they are given.
A bond with an annual coupon of $70 and originally sold at par for $1,000. The current market interest rate (yield to maturity) is 8%. This bond will sell at _______. Assuming no change in market interest rates, the bond will present the holder with capital ________ as it matures.
It gives the opportunity to provide structured feedback and reflection and recognise ay achievements as well as identify any performance issues.
Lau, T., & Johnson, L. (2013). The legal and ethical environment of business. (1st ed., p. 11.2-11.5).
Southlake Corporation issued $900,000 of 8% bonds on March 1, 20X1. The bonds pay interest on March 1 and September 1 and mature in 10 years. Assume the independent cases that follow.
-3 x 1.66 pts. = minus 5 pts. = 45 pts. out of 50 pts. = 90%
13. What is the formula for the Present Value (PV) for a finite stream of cash flows (1 per year) that lasts for 10 years?
a. What is the CD’s value at maturity (future value) if it pays 10 percent annual interest?
After reviewing the Balance sheet I have a concern regarding the Current and short term liabilities. Creditors/ trade payable is payment yet to be made for goods already received, if this continues to rise then it will effect the business profit and less stock will have to be ordered so repayments can be made. Bank overdrafts also continued to rise and in the long-term the business will be paying greater interest, which will again eat into the profit. Both increased quite a great deal from the last year-end. If this continues then the business will get into bad debts and owe too much that it will end up having to sale its assets to survive. Finally I can see that due to the above issues and other issues the net current assets/ working capital has decreased so therefore the business is less value then it was a year ago. If the business is worth £1 million now, this could soon decrease within another year.
9. You want to purchase a business with the following cash flows. How much would you pay for this business today assuming you needed a 14% return to make this deal?
Technology has an impact on almost everyone’s lives these days. People communicate with Facebook and text messages other than calling people on the phone or actually going to visit that person. This is becoming a problem, because the more involved with technology we are the less we are involved with socialization. Imagine a world where all we have is computers everywhere and they do everything for us, would people remember how to interact with one another? This is the problem I don’t want to see happening, so many companies are trying to think of the latest and greatest technology and don’t care about the effect on the
The point value for the Multiple Choice is 1 point per question each for a grand total of 20 points. If you have any questions please let me know.