Finance (MBA
Part Time) Course
outline 2002 (new version of November 18th  changes after Christmas!!!)
Prerequisites:
Answers to suggested Q&P (Word
document)
 Class notes (slides)
 Excel files
 RWJ: Recommended Q&P (updated for 6/e)
 Financial statement analysis
 Statement of cash flow: 27.4
 Financial planning: 26.1, 26.2
Additional assumptions for these last two problems:
26.1 Cash = 0, constant, outside financing with debt
Initial bank loan = 0 => CurLiab = Accounts
payable + Accrued expenses
Depreciaiton = 20% Net fixed assets of previous
year
26.2 Cash = 0, constant, outside financing with debt
Initial bank loan = 0 => Shortterm debt =
Accounts payable + Accrued expenses
Depreciaiton = 10% Net fixed assets of previous
year
 Solutions (Excel file)
 Present value
 General formula: 4.1 to 4.14
 Simplifying formulas
Perpetuity: 4.19, 4.22
Growing perpetuity: 4.24, 4.25
Annuity: 4.28, 4.29
Growing annuity: 4.42, 4.47
 Compounding interval: 4.15, 4.21
 Solutions ( Excel file)
 Bonds and Stocks valuation
 Bond valuation: 5.1, 5.2, 5.7
 Duration: 25.13, 25.15
 DDM: 5.13, 5.16, 5.19, 5.24
 Growth opportunities: 5.25, 5.26, 5.28, 5.30
 PER: 5.31
 Solutions (Excel file)
 Capital budgeting
 IRR, Payback: 6.1, 6.5, 6.6
 PV calculation, new project, no inflation: 7.1, 7.7
 PV calculation, new project, inflation: 7.14
 Replacement: 7.32, 7.34
 Decision tree: 8.1
 Accounting Profit BreakEven: 8.6
 NPV BreakEven: 8.7
 Scenario: 8.10
 Option to Abandon: 8.13, 8.14
 Solution (Excel
file)
 Risk and return
 Return calculation:
9.1, 9.2
 Risk premia: 9.6, 9.9
 Mean and standard deviation: 9.10, 9.11, 9.12
 Normal distribution 9.19
 Covariance and correlation: 10.2, 10.3
 Portfolios: 10.5, 10.6
 Capm: 10.24, 10.25, 10.26, 10.27
 Solution (Excel file)
 Chap 12  solutions
 Problem sets
The following problem sets are based on past exams. Work them out before
looking at the solution.
Financial statement analysis: Farber.com + solution
PV and bond valuation: MBA, Corp + solution
Stock valuation: XYZ + solution
Investment project: Make or Buy
Porfolio selection: Aunt Agatha (solution included)
 Web links: see the resources page
