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Chatper 1
Chapter 3
Chapter 4
Chapter 5
Chapter 2
100

Goal of a corporation, how?

Maximize shareholder wealth,

Make decisions that maximizes the price of common stock


100

Financial statement that presents a firm's asset, liabilities and equity

Balance Sheet

100

Increase in Inventory, what happens to Cash Flow? 

Cash outflow

100

You won a lottery and told you will receive $10,000 per year for 10 years. What is the equivalent of these cash flows now, assuming 5% interest rate? 

PV of annuity

pmt = 10000

n = 10

r = 5%

100
What is IPO and in which market does IPO happen?

The initial public offerings , primary market

200

Name two closing costs when buying a home

Origination fee, points, down payment, title, insurance fee etc 

200

The results of subtracting cost of goods sold from sales

Gross Profit

200
Net working capital

CA - CL

200

A series of equial payments made for a specific number of periods

Annuity

200

If you were to get a loan to buy a car (worth $50000), interest rate 6% compounded monthly, and borrowing form 4 years, what is the monthly payment? 

solving for PMT


PV = 50000

Nper = 48 

r = 6%/12 = 0.5%

300

Agency Problem (Cost)

Conflict of interest between managers and shareholders

300

Earnings Before Interest and Tax (EBIT)

Gross profit - operating expenses (depreciation)

300

Earnings Per Shares

NI/Number of shares outstanding

300

What are we calculating if we want to know how much you need to invest today to have $1mil. 10 years later (r=5%)

FV / (1+r)^n


= 1000000/(1+0.05)^10

300

Difference between EAR and APR 

EAR = (1+APR/m)^m

400

in which platform are we taking the exam? 

Brightspace

400

Financiang activity of a firm affects EBIT (Operating Income): True vs False? 

False

400

how to calculate credit card interest when average daily method is used? 

Average daily balance/monthly APR

400

What is the worth of a single investment of $5000 today in 5 years, with 5% compound annually. What are we calculating for?

PV *(1+r)^n

400

What happens if you only make minimum payments on your credit card balance? 

Keep paying interest and principle

500
Give examples to mitigate agency problem

stock compensation, monitoring, performance pay 

500

In Statement of Cash Flow, issuing new bond appears under which section?

Financing activity

500

Issuing equity (increase in Equity), what happens to cash flow? 

Cash inflow? 

500
If you were to buy a house today, and you can pay $2000 as mortgage (30-year, fixed interest of 7% compounded monthly), how much of a house can you afford? What are we solving for? 

PV

PMT = 2000

nper = 360

r = 7%/12

500

how many cheat sheets allowed?

2, double sided