Corporate Finance: Key Concepts and Calculations

Key Corporate Finance Concepts and Calculations

1. SEVILLANA decides to sell some assets whose net book values at the time of the sale are between 100,000 and 500,000 euros respectively, while its liquidation or residual values are, after taxes, from 150,000 to 400,000 euros. To determine the cash receipts minus cash payments (model of cash flow), we:

b) Adding a positive adjustment of €550,000.

2. According to the dynamic analysis (not classic) solvency:

d) The credibility depends on three parameters: physical units, price, and terms.

3. A customer of a bank needs 2,500 euros for 30 days and decides to realize its operation in a bill of exchange, appearing as books in the same. The operation that seeks to make the bank is:

c) A financial discount.

6. When the investor decides to sell its fixed-income securities in the secondary market, you should know:

d) That the amount of profit or loss depends on the duration of assets to liquidate.

7. Indicate which of the following statements about the financial assets for investment of the company’s surplus is correct:

a) The yields of Treasury bills are subject to income tax or ISS.

8. Our company must make a payment of 3,050 euros within 60 days, and to make it effective has a surplus amount of $3,000 cash at the moment. Using a base year of 360 days and knowing that withholding tax is 15%, the minimum interest rate to look for the company in a fixed-term taxation to avoid affecting its ability to pay is:

d) None of the above answers is correct.

9. A business takes 110 days to collect the products that come out of your store and your daily sales amount to 2,000 euros. The company gets 10 days shorten the billing cycle. Knowing that the average cost of resources is 8%, this measure will:

c) A financial cost savings amounting to EUR 1,600 per year.

11. A company goes to a financial institution to deduct a point of change in 90 days of a nominal €100,000, when there are only 30 days to maturity. The trade-off so that will give the bank is 6%, this being a discount pass. Using a 360-day basis, the cash gives the company the bank shall be:

a) 99,500 euros.

12. A company needs cash and is considering offering its customers a discount prompt payment of 5% if paid in cash rather than 90 days had been doing so far. Using a base of 360 days, tell how much of the actual cost would be carried out the operation:

b) 22.77%.

13. (Continued) If the company has at its disposal a credit policy which actual cost is 10%, then:

c) Should be financed with credit policy if the cash discount is greater than 2.354%.

15. A company has decided to invest 100,000 euros in a deposit of 1 month to a 6% APR. Knowing that there are no fees of any kind and taking into account any tax withholding at the end of the month will receive in interest on your checking account (using 360 days):

a) 486.75 euros.

18. A company has contracted with a current account paid monthly statements. The financial institution provides the following information for the last month: Gross interest, $300, commissions and other costs 20 euros, withholding tax, 15%. The effective rate of return achieved by the company is:

d) With these data, it is impossible to calculate the result.

19. As for liquidity:

b) An increase in receivables turnover benefits liquidity.

Investment Valuation and Financial Rules

1. In the valuation of investments, the share issue premium:

c) Decreases the cost of the funding source in which it acts.

2. Among the basic premises for the evaluation and selection of investments is NOT:

d) We will not consider any A. Circu.

4. Say why not reduce the CCS in the formation of net cash flows:

c) It is not just point out cash accounting.

6. If at any investment project is negative NPV when the discount rate K = CMPC, we can say:

b) The profitability of the asset is less than the cost of liabilities.

7. To raise funds through the issuance of ordinary shares:

b) An own external funding.

8. In conducting the liquidation of a company, the shareholder is responsible for:

a) The value of own funds after all the operations of the liquidation.

EXPL FEES – PAYMENT EXPL. = Qai EXPL OR FNC – PAYMENTS INT – T PAYMENTS – PAYMENTS DIV = TS PROV. PERIOD – CAF = TREASURE. DEF. PERIOD.

GOLDEN RULE: Af = Pf and Ac = Pc

SAFETY RULE: Permanent Passive > Af = The CC, FM or FR > 0 —-> Condi. Solvency c/p Ac > Pc

Cash Flow Table