Fight Finance

(a) $15,400,000.00

(b) $8,371,559.63

(c) $962,757.81

(d) $962,045.33

(e) $64,935.06

(a) 36.2655

(b) 55.8395

(c) 59.3381

(d) 77.9197

(e) 87.3629

(a) $1,997.78 per month in the first year, with 3% annual increases.

(b) $2,083.33 per month in the first year, with 3% annual increases.

(c) $2,157.60 per month in the first year, with 3% annual increases.

(d) $2,171.49 per month in the first year, with 3% annual increases.

(e) $3,333.33 per month in the first year, with 0% annual increases.

(a) Assets.

(b) Liabilities and owner's equity.

(c) Current assets and current liabilities.

(d) Dividends and buy backs.

(e) Net income, also known as earnings or net profit after tax.

(a) Investment decision.

(b) Financing decision.

(c) Working capital decision.

(d) Payout policy decision.

(e) Diversification decision.

(a) Neither Miss Red nor Mrs Green would appear rational to an economist.

(b) Mrs Green is satiated when she has $25 of wealth. That is her bliss point.

(c) Mrs Green is risk loving when she has between zero and $25 of wealth, same as Mr Blue.

(d) Mrs Green is risk averse when she has between $25 and $50 of wealth.

(e) Mrs Green is risk loving when she has between $50 and $100 of wealth, same as Mr Blue.

(a) Revenue, sales, turn over.

(b) Paid up capital, contributed equity.

(c) Shares, stock, equity.

(d) Net income, earnings, net profit after tax, the bottom line.

(e) Market capitalisation of equity, book value of equity.

(a) If a company's dividend (and profit and free cash flow to equity) rises, its share price will rise.

(b) If a fixed coupon bond's yield to maturity rises, its price will rise.

(c) If a residential property's rent revenue rises, its price will rise.

(d) If a patent's royalty revenue rises, its price will also rise.

(e) If a software asset's licensing revenue rises, its price will also rise.

(a) The cash cycle is typically measured in days.

(b) The lower the cash cycle, the better.

(c) The cash cycle represents the time that money is invested or ‘tied up’ in inventory.

(d) Companies should avoid negative cash cycles.

(e) The cash cycle is the time between the inventory payment date to the supplier and cash receipt date from the customer.

(a) Alice buys Alan’s shares using their share brokers and the securities exchange.

(b) Bell buys Bob’s house using his real estate agent.

(c) Carla lends Carlos money at an interest rate of 10% pa for 3 years.

(d) Dora lends money to her bank at 2% pa and the bank lends the funds to David at 5% pa.

(e) Eve buys Ernie’s government bond using their brokers and the securities exchange.