Problem 1. Explain how financial markets work in the U.S.
Problem 2. What is the role of ethics and compliance in finance?
Problem 3. Which financial ratios are most important to a retail business and how does that compare to a service business? Explain your answer.
Problem 4. Perform a break even analysis on the following problem
(Break-even point) Roberto Martinez is the chief financial analyst at New Wave Pharmaceuticals (NWP), a company that produces a vitamin claimed to prevent the common cold. Roberto has been asked to determine the company's break-even point in units. He obtained the following information from the company's financial statements for the year just ended. In addition, he found out from NWP's production manager that the company produced 40 million units in that year.
What will Roberto determine the break-even point in units to be?
Information for the problem:
Sales $20,000,000
Variable costs $16,000,000
Revenue before fixed costs $4,000,000
Fixed costs $2,400,000
EBIT $1,600,00
Problem 5. Calculate present value and future value of cash flows on the following two problems a) and b)
A. (Present value) What is the present value of the following future amounts?
a. $800 to be received 10 years from now discounted back to the present at 10 percent ____________
b. $400 to be received 6 years from now discounted back to the present at 6 percent ______________
c. $1,000 to be received 8 years from now discounted back to the present at 5 percent_____________
d. $900 to be received 9 years from now discounted back to the present at 20 percent______________
B. (Present value of an annuity) What is the present value of the following annuities?
a. $3,000 a year for 10 years discounted back to the present at 8 percent______________
b. $50 a year for 3 years discounted back to the present at 3 percent_________________
c. $280 a year for 8 years discounted back to the present at 7 percent________________
d. $600 a year for 10 years discounted back to the present at 10 percent______________
Problem 6. Name and discuss at least 3 risks associated with capital projects.
Problem 7. If you were a lease company, would you look at the market differently than a lending institution? Why or why not?
Problem 8. Using a valid currency exchange website, convert $100 USD into
a. British Pounds _________
b. Euros _________
c. Japanese Yen ____________
d. Chinese Yuan ___________
Problem 9. Discuss how you can mitigate foreign exchange rate risk.
Problem 10. To what extent is every business impacted by globalization in making financial decisions?