FIN435 • Study Guide Part II • Chapters 10–12

Calculation Study Guide

15 worked calculation questions across WACC, capital budgeting, and DCF / project cash flow. Each problem includes a formula reminder, hint, step-by-step solution, and a common trap.
15 calculation problems Step-by-step solutions Exam-style reminders Common traps highlighted

Fast formula reference

WACC

WACC = Wd × Kd(1 − T) + We × Ke Ke = rRF + β × MRP Ke = D1 / (P0 − flotation costs) + g

Capital budgeting

NPV = Σ[CFt / (1 + r)^t] − CF0 IRR: rate that makes NPV = 0 MIRR = (FV positives / |PV negatives|)^(1/n) − 1 PI = PV inflows / |CF0|

Project cash flow / DCF

OCF = (Sales − Costs − Dep)(1 − T) + Dep Final-year CF = OCF + After-tax Salvage + Recovery of NOWC EV = FCF1 / (WACC − g) Equity Value = EV + Cash − Debt
Work the problem first by hand or in Excel, then open the solution and compare your structure.

15 calculation questions

FIN435 study use: calculation practice across WACC, capital budgeting, and DCF / project cash flow.