FIN301 Class Web Page, Spring ' 22
Instructor: Maggie Foley
Jacksonville University
Business
Finance Online, an interactive learning tool for the Corporate Finance
Student http://www.zenwealth.com/BusinessFinanceOnline/index.htm
Weekly SCHEDULE, LINKS, FILES and Questions
Chapter 
Coverage, HW, Supplements 
Required 
References 

Chapter
1, 2 
Chapter 1: Introduction Flow
of funds describes the financial assets flowing from various sectors through
financial intermediaries for the purpose of buying physical or financial
assets. *** Household, nonfinancial business, and our government Financial
institutions facilitate exchanges of funds and financial products. ***
Building blocks of a financial system. Passing and transforming funds and
risks during transactions. ***
Buy and sell, receive and deliver, and create and underwrite financial
products. ***
The transferring of funds and risk is thus created. Capital utilization for
individual and for the whole economy is thus enhanced. The
factors that could cause the next financial crisis are · Pandemic · Global warming · War · Inflation · QE · student loan · government debt · tax reform · What else? 1)
Natural
disaster Chapter 2 Introduction of Financial Market 1.
What
are the six parts of the financial markets
Money: · To pay for purchases and store wealth (fiat money, fiat currency) Financial Instruments: · To transfer resources from savers to investors and to transfer risk to those best equipped to bear it. Financial
Markets: · Buy and sell financial instruments · Channel funds from savers to investors, thereby promoting economic efficiency · Affect personal wealth and behavior of business firms. Example? Financial Institutions. · Provide access to financial markets, collect information & provide services · Financial Intermediary: Helps get funds from savers to investors Central Banks · Monitor financial Institutions and stabilize the economy Regulatory Agencies · To provide oversight for financial system. 2.
What
are the five core principals of finance
Introduction to Capital Markets  ION Open Courseware
(Video) How the stock market works (video) No homework
for chapters 1, 2 
1/11Class
video: syllabus and market watch game 1/13
class video: financial crisis, chapter 1, chapter 2, no
homework 1/18
Class video: chapter
5 1/20
class video: chapter 5 homework (Q110) 1/25
Class video: chapter 5 homework (Q1120), Quiz 1 1/27
class video: chapter
3 Income statement, balance sheet 2/1
Class video: quiz 2,
chapter 3 cash flow statement 2/3
class video: chapter 3 in class exercise, homework 2/8
Class video: quiz 3,
chapter 3 homework 2/10
class video: chapter 4 ratio analysis 2/15
Class video review
for the first midterm exam (study guide posted on blackboard) 2/17 class
video: first midterm exam
(on blackboard as well as in classroom, chapters 3, 4, 5) 2/22
Class video chapter 6 risk and return: single stocks, a
portfolio with 2 stocks, correlations 2/24
class video chapter 6: portfolio return, beta 3/1 Class video quiz 4, chapter 6:
CAPM, homework part i 3/3 Class video chapter 6 homework
part ii 3/8 Class video quiz 5, chapter 7 3/10 Class video chapter 7 homework 3/15 Class video Spring Break 3/17 Class video Spring Break 3/22 Class video no quiz,
chapter 8 3/24 Class video chapter 8 homework 3/29 Class video review for the 2^{nd}
midterm exam Study Guide Review Notes here FYI 3/31 Class video second midterm exam, homework
due 4/5 Class video chapter 9, WACC 4/7
Class video
Class is cancelled.
Instructor will attend the EFA conference. 4/12 Class video quiz 6,
Chapter 10 Capital Budgeting, In class exercise 4/14
Class video Happy Charter Day 4/19 Class video quiz 7,
Chapter 10 Homework 4/21
Class video Final Exam Review In class review File FYI
only Final Exam on 4/26 on blackboard 

Chapter 5 Time value of Money The time value of money  German Nande (video)
Tutoring of Time Value of Money
calculation in Excel （video） Chapter 5 Homework (due with first
mid term) 1.
You
deposit $5,000 in a saving account at 10% compounded annually. How much is
your first year interest? How much is your second year interest? (500, 550) 2.
What
is the future value of $5,000 invested for 3 years at 10% compounded
annually? ( 6,655) 3.
You
just bought a TV for $518.4 on credit card. You plan to pay back of $50 a
month for this credit card debt. The credit card charges you 12% of interest
rate on the monthly basis. So how long does it take to pay back your credit
card debt? (11 months) 4.
You
are going to deposit certain amount in the next four years. Your saving
account offers 5% of annual interest rate. First year: $800 Second year: $900 Third year: $1000 Fourth year: $1200. How much you can withdraw four years later? (4168.35) 5.
You
are going to deposit certain amount in the next four years. Your saving
account offers 5% of annual interest rate. First year: $800 Second year: $900 Third year: $1000 Fourth year: $1200. How much is the lump sum value as of today (NPV)? (3429.31) 6.
Ten
years ago, you invested $1,000. Today it is worth $2,000. What rate of
interest did you earn? (7.18%) 7.
At
5 percent interest, how long would it take to triple your
money? (22.52) 8.
What
is the effective annual rate if a bank charges you 12 percent compounded
monthly? (12.68%) 9.
Your
father invested a lump sum 16 years ago at 8% interest for your education.
Today, that account worth $50,000.00. How much did your father deposit 16
years ago? ($14594.50) 10.
You
are borrowing $300,000 to buy a house. The terms of the mortgage call for
monthly payments for 30 years at 3% interest. What is the amount of each
payment? ($1264.81) 11.
You
deposit $200 at the beginning of each month into your saving account
every month. After two years (24 deposits total), your account value is
$6,000. Assuming monthly compounding, what is your monthly rate that the bank
provides? (1.74%) 12.
You want to buy a fancy car. For this goal,
you plan to save $5,500 per year, beginning immediately. You will make 4 deposits in an account that
pays 8% interest. Under these
assumptions, how much will you have 4 years from today? ($26,766) 13. The Thailand Co. is considering the purchase of
some new equipment. The quote consists of a quarterly payment of $4,740 for
10 years at 6.5 percent interest. What is the purchase price of the
equipment? ($138,617.88) 14. Today, you are purchasing a 15year, 8 percent
annuity at a cost of $70,000. The annuity will pay annual payments. What is
the amount of each payment? ($8,178.07) 15. Shannon wants to have $10,000 in an investment
account three years from now. The account will pay 0.4 percent interest per
month. If Shannon saves money every month, starting one month from now, how
much will she have to save each month? ($258.81) 16. Trevor's Tires is offering a set of 4 premium tires
on sale for $450. The credit terms are 24 months at $20 per month. What is
the interest rate on this offer? (6.27 percent) 17. Top Quality Investments will pay you $2,000 a year
for 25 years in exchange for $19,000 today. What interest rate are you earning
on this annuity? (9.42 percent) 18. Around Town Movers recently purchased a new truck
costing $97,000. The firm financed this purchase at 8.25 percent interest
with monthly payments of $2,379.45. How many years will it take the firm to
pay off this debt? (4.0 years) 19. You just received a credit offer in an email. The
company is offering you $6,000 at 12.8 percent interest. The monthly payment
is only $110. If you accept this offer, how long will it take you to pay off
the loan? (82.17 months) 20. What is the future value of weekly payments of $25
for six years at 10 percent? ($10,673.90) 
Summary of math and excel equations Math
Equations FV
= PV *(1+r)^n PV
= FV / ((1+r)^n) N
= ln(FV/PV) / ln(1+r) Rate
= (FV/PV)^{1/n} 1 Annuity:
N = ln(FV/C*r+1)/(ln(1+r)) Or
N = ln(1/(1(PV/C)*r)))/ (ln(1+r)) EAR
= (1+APR/m)^m1 APR
= (1+EAR)^(1/m)*m Excel
Formulas To get FV, use FV function. =abs(fv(rate, nper,
pmt, pv)) To get PV, use PV
function = abs(pv(rate, nper,
pmt, fv)) To get r, use rate
function =
rate(nper, pmt, pv, fv) To get number of years,
use nper function = nper(rate, pmt, pv,
fv) To
get annuity payment, use PMT function = pmt(rate, nper, pv,
fv) To
get Effective rate (EAR), use Effect function =
effect(nominal_rate, npery) To
get annual percentage rate (APR), use nominal function =
nominal(effective rate, npery) NPV NFV calculator(FYI, might be helpful) Time Value of Money
Calculator 

Chapter 3 Financial Statement Analysis Experts
Explain: Financial Statements (well explained, video) *************
Introduction *************** Let’s
compare Nike with GoPro based on 10K (www.nasdaq.com) https://www.nasdaq.com/marketactivity/stocks/nke/financials Income Statement – Nike
Balance sheet  Nike
Cash flow statement  Nike
For discussion: Which company is
better? Let’s
find it out by comparing stock performance between the two firms. Nike Stock Performance (google.com) What
is your conclusion? Financial Ratios of Nike
(finviz.com) ******* Part I: Balance Sheet and
Income Statement ************** Home Depot (Ticker in the
market: HD) reported the following information for the year ended January 30^{th},
2011 (expressed in millions). Sales: $67,977 Cost of goods sold: $44,693 Marketing, general and
administrative expenses: $15,885 Depreciation expenses:
$1,616 Interest expense: $530 Tax rate: 36.70% Number of shares
outstanding: 1,623 Dividends paid to
stockholders: $1,569. Use the above information
to try to prepare the income statement of Home Depot
for the year ended January 30^{th}, 2011 Home Depot (Ticker in the
market: HD) reported the following information for the year ended January 30^{th},
2011 (expressed in millions). Cash: $545 Accounts receivables:
$1,085 Inventories: $10625 Other current assets:
$1,224 Gross fixed assets: $38,471 Accumulated depreciation:
$13,411 Other fixed assets: $1,586 Accounts payable: $9,080 Short term notes payable:
$1,042 Long term debt: $11,114 Total common stock: $3,894 Retained earnings: $14,995 Use
the above information to try to prepare the balance
sheet of Home Depot for the year ended January 30^{th}, 2011 
Income statement –
GoPro
Balance
sheet  GoPro
Cash
flow statement – GoPro
GoPro
Stock performance (google.com) Financial
Ratios of GoPro (finviz.com) http://www.jufinance.com/10k/bs http://www.jufinance.com/10k/is http://www.jufinance.com/10k/cf Ratio Analysis (plus balance sheet, income statement) https://www.jufinance.com/ratio 

********* Part II: Cash Flow Statement ******************

In Millions of USD (except for per share items) 
52 weeks ending 20140202 
Net Income/Starting Line 
5,385.00 
Depreciation/Depletion 
1,757.00 
Amortization 
 
Deferred Taxes 
31 
NonCash Items 
228 
Changes in Working Capital 
289 
Cash from Operating Activities 
7,628.00 
Capital Expenditures 
1,389.00 
Other Investing Cash Flow Items, Total 
118 
Cash from Investing Activities 
1,507.00 
Financing Cash Flow Items 
37 
Total Cash Dividends Paid 
2,243.00 
Issuance (Retirement) of Stock, Net 
8,305.00 
Issuance (Retirement) of Debt, Net 
3,933.00 
Cash from Financing Activities 
6,652.00 
Foreign Exchange Effects 
34 
Net Change in Cash 
565 
Cash Interest Paid, Supplemental 
639 
Cash Taxes Paid, Supplemental 
2,839.00 
Discussion:
2. What does net change in cash mean?
Now
let’s learn how to calculate cash changes in each session
Source
of cash
Use
of Cash
Cash
Flow from Operations: Five Steps
1. Add back depreciation.
2. Subtract (add) any increase (decrease) in accounts
receivable.
3. Subtract (add) any increase (decrease) in inventory.
4. Subtract (add) any increase (decrease) in other current
assets.
5. Add (subtract) any increase (decrease) in accounts payable
and other accrued expenses
Chapter 3
HW (due with the first midterm)
1.
Firm AAA
just showed how it operated in the prior year.
Sales
= $2,000; Cost of Goods Sold = $1,000; Depreciation Expense = $200;
Administrative Expenses = $180; Interest Expense = $30; Marketing Expenses =
$50; and Taxes = $200. Prepare income
statement
2.
A firm has $2000 in current assets, $3000
in fixed assets, $300 in accounts receivables, $300 accounts payable, and
$800 in cash. What is the amount of the inventory? (hint: 900)
3.
A firm
has net working capital of $1000. Longterm debt is $5000, total assets are
$8000, and fixed assets are $5000. What is the amount of the total equity?
(Hint: to find total equity, you need to calculate total debt, which is a sum
of long term debt and short term debt. Short term can be found from new
working capital.) (hint: 1000)
4.
Andre's Bakery has sales of $100,000 with
costs of $50,000. Interest expense is $20,000 and depreciation is $10,000.
The tax rate is 35 percent. What is the amount of tax paid? (hint:
7000)(hint: tax = taxable income * tax rate and taxable income = EBT)
5.
Andre's Bakery has sales of $100,000 with
costs of $50,000. Interest expense is $20,000 and depreciation is $10,000.
The tax rate is 35 percent. The company also paid $3,000 for dividend. What
is the retained earning? (hint: retained earning = net income 
dividend)(hint: 10,000)
6.
The Blue Bonnet's 2018 balance
sheet showed net fixed assets of $2.2 million, and the 2019 balance sheet
showed net fixed assets of $2.6 million. The company's income statement
showed a depreciation expense of $1,000,000. What was the amount of the net
capital spending for 2019? （$1,400,000）
7.
A firm has $500 in inventory,
$1,860 in fixed assets, $190 in accounts receivables, $210 in accounts
payable, and $70 in cash. What is the amount of the current assets? (760)
8.
A firm has net working capital
of $640. Total liability is $5,860. Total assets are $6,230, and fixed assets
are $3,910. What is the amount of long term debt? (4180)
9.
Which one of the following is
a use of cash? (answer: B)
A. decrease in accounts receivable
B. decrease in accounts payable
C. increase in common stock
D. decrease in inventory
10. A firm generated net income of $878. The depreciation
expense was $40 and dividends were paid in the amount of $25. Accounts
payables decreased by $13, accounts receivables increased by $20, inventory
decreased by $14, and net fixed assets decreased by $8. There was no interest
expense. What was the net cash flow from operating activity? (899)
11.
Teddy’s Pillows has beginning net fixed assets of $480 and ending net fixed
assets of $530. Assets valued at $300 were sold during the year. Depreciation
was $40. What is the amount of capital spending? (90)
12.
Art’s Boutique has sales of $640,000 and costs of $480,000.
Interest expense is $40,000 and depreciation is $60,000. The tax rate is 34%.
What is the net income? (39,600)
Cash
Flow Statement Answer 
calculation for changes 

Cash
at the beginning of the year 
2060 

Cash from operation 

net
income 
3843 

plus
depreciation 
1760 

/+ AR

807 
807 

/+ Inventory 
3132 
3132 

+/ AP 
1134 
1134 

net change in cash from operation 
2798 

Cash from investment 

/+ (NFA+depreciation) 
1680 
1680 

net change in cash from investment 
1680 

Cash from finaning 

+/ long term debt 
1700 
1700 

+/ common stock 
2500 
2500 

 dividend 
6375 
6375 

net change in cash from investment 
2175 
