Financial Management problem Management Essay Paper
Financial Management problem
1. What is the goal of the corporation? How does this goal sometime conflict with a firm’s social responsibility? Please give a real life example of a company that has not focused properly on its social responsibility.
2. What does the phrase “cash is king” mean? Give an example
3. The Present Value equation is the most powerful equation in finance. I explained how it can be used in many different scenarios across fixed income, equities, and project finance. Can you please explain how that equation can be applied in each of those scenarios? Please show timelines and be explicit in terms of explain how each of the components are treated in each scenario.
4. You are the CEO of a private company. You are looking to expand the company and are considering all of the alternatives at your disposal. In class we discussed many different options that you have for funding the expansion. Please walkthrough the different options including the pros and cons of each.
5. You have decided that you want to purchase a home in Nassau County, New York in 5 years. You have some money saved and you expect to save additional funds at the end of each year over the next several years. Please walkthrough the equations and steps that you would need to consider determining whether you will have enough funds to cover the 20% downpayment. Please include all of the factors including a timeline.
Do your own work and make sure you answer all the questions.
It will submit on the Turnitin.
Submission will be sent to Turnitin to be electronically reviewed for plagiarism.
Financial Management Problem
Name:
Course
Instructor
Date:
Financial Management Problem
1 What is the goal of the corporation? How does this goal sometime? Please give a real life example of a company that has not focused properly on its social responsibility.
The goal of the corporation is to make money where they maximize profits, which creates value for the owners. Sometimes there is a limited budget to set money for social responsibility and shareholders expect maximization on return on investments. BP creates sustainability reports and announcements, but the company still scores poorly received on environmental compliance and there are concerns about challenges to actualize long-term environmental protections.
1 What does the phrase “cash is king” mean? Give an example
"Cash is king” implies that a business or investor without cash faces difficulties to thrive as cash is used in many of the transactions. A company facing cash flow problems has reduced capacity to generate funds and meeting short-term obligations as they fall due. Companies need money to pay third parties, such as creditors, banks and even their owners. In the great recession of 2007-2009, the concept of “cash is king” was applicable for financial institutions that had cash shortage during time of mounting bills and bankruptcies
1 The Present Value equation is the most powerful equation in finance. I explained how it can be used in many different scenarios across fixed income, equities, and project finance. Can you please explain how that equation can be applied in each of those scenarios? Please show timelines and be explicit in terms of explain how each of the components are treated in each scenario.
* The present value and fixed income such as bond is determined as price = Nominal value (N) / (1+ rate return or discount rate (r) )^ Term until maturity (n)
* For equities, the PV = (free cash flows) + PV (terminal value), where the free cash flows, discount rate add time period are used to make the calculation.
...