Finance for business | business and finance

Assessment Task – Tutorial Questions 

Don't use plagiarized sources. Get Your Custom Essay on
Finance for business | business and finance
Just from $13/Page
Order Essay

 

Unit Code: HI5002 

 

Unit Name: Finance for Business 

 

Assignment: Tutorial Questions 1   Due: 11:30pm 22nd May 2020 

 

Weighting: 25%  

 

Total Assignment Marks: 50 marks 

 

Purpose: This assignment is designed to assess your level of knowledge of the key topics covered in this unit 

 

Unit Learning Outcomes Assessed: 1, 2, 3 

 

Description: Each week students were provided with three tutorial questions of varying degrees of difficulty.  These tutorial questions are available in the Tutorial Folder for each week on Blackboard. The Interactive Tutorials are designed to assist students with the process, skills and knowledge to answer the provided tutorial questions.  Your task is to answer a selection of tutorial questions for weeks 1 to 5 inclusive and submit these answers in a single document. 

 

The questions to be answered are; 

 

Week 1 What are the five basis principles of finance? Briefly explain them (no more than 250 words). (10 marks) 

 

 

Week 2 Little Book LTD has total assets of $860,000. There are 75,000 shares of stock outstanding, total book value of $750,000 with a market value of $12 a share. The firm has a profit margin of 6.5% and a total asset turnover of 1.5.  

 

Required: a) Calculate the company’s EPS? (6 marks) b) What is the market –to- book ratio? (4 marks) 

 

  

 

Week 3 Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an additional $20,000 to that account. You earned 8%, compounded semi-annually, for the first ten years, and 6.5%, compounded annually, for the last five years.  

 

Required: a) What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years? (2 marks) b) How much money do you have in your account today? (4 marks) c) If you wish to have $85,000 now, how much should you have invested 15 years ago? (4 marks) 

 

 

Week 4 Giant Equipment Ltd. is considering two projects to invest next year. Both projects have the same start-up costs. Project A will produce annual cash flows of $42,000 at the beginning of each year for eight years. Project B will produce cash flows of $48,000 at the end of each year for seven years. The company requires a 12% return. 

 

Required: a) Which project should the company select and why? (5 marks) b) Which project should the company select if the interest rate is 14% at the cash flows in Project B is also at the beginning of each year? (5 marks) 

 

 

Week 5 Rachel is a financial investor who actively buys and sells in the securities market. Now she has a portfolio of all blue chips, including: $13,500 of Share A, $7,600 of Share B, $14,700 of Share C, and $5,500 of Share D. 

 

Required: a) Compute the weights of the assets in Rachel’s portfolio? (2 marks) b) If Rachel’s portfolio has provided her with returns of 9.7%, 12.4%, -5.5% and 17.2% over the past four years, respectively. Calculate the geometric average return of the portfolio for this period. (2 marks) c) Assume that expected return of the stock A in Rachel’s portfolio is 13.6% this year. The risk premium on the stocks of the same industry are 4.8%, betas of these stocks is 1.5 and the inflation rate was 2.7%. Calculate the risk-free rate of return using Capital Market Asset Pricing Model (CAPM). (2 marks) d) Following is forecast for economic situation and Rachel’s portfolio returns next year, calculate the expected return, variance and standard deviation of the portfolio. (4 marks) 

 

State of economy Probability Rate of returns  Mild Recession 0.35 – 5% Growth 0.45 15% Strong Growth 0.20 30% 

 

 

 

 

Submission Directions:  

 

The assignment has to be submitted via Blackboard.  Each student will be permitted one submission to Blackboard only.  Each student needs to ensure that the document submitted is the correct one. 

 

Academic Integrity Academic honesty is highly valued at Holmes Institute. Students must always submit work that represents their original words or ideas. If any words or ideas used in a class posting or assignment submission do not represent the student’s original words or ideas, the student must cite all relevant sources and make clear the extent to which such sources were used. Written assignments that include material similar to course reading materials or other sources should include a citation including source, author, and page number.  In addition, written assignments that are similar or identical to those of another student in the class is also a violation of the Holmes Institute’s Academic Conduct and Integrity Policy. The consequence for a violation of this policy can incur a range of penalties varying from a 50% penalty through to suspension of enrolment.  The penalty would be dependent on the extent of academic misconduct and the student’s history of academic misconduct issues.   All assessments will be automatically submitted to SafeAssign to assess their originality. 

 

Further Information:  For further information and additional learning resources, students should refer to their Discussion Board for the unit. 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 15% with the discount code LOCKDOWN