## Fundamentals of Capital Budgeting: Percolated Fiber Free Cash Flow

Fundamentals of Capital Budgeting: Percolated Fiber Free Cash Flow in \$1.50 only (Instant Download)

You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fiber manufacturing. Your boss comes into your office, drops a consultant’s report on your desk, and complains, “We owe these consultants \$1 million for this report, and I am not sure their analysis makes sense. Before we spend the \$25 million on new equipment needed for this project, look it over and give me your opinion.” You open the report and find the following estimates (in millions of dollars):

All of the estimates in the report seem correct. You note that the consultants used straight-line depreciation for the new equipment that will be purchased today (year 0), which is what the accounting department recommended. The report concludes that because the project will increase earnings by \$4.875 million per year for ten years, the project is worth \$48.75 million. You think back to your halcyon days in finance class and realize there is more work to be done!

## Regression, Beta, Standard Dev, Correlation and other Calculation for S&P500

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The assignment will be collected at the beginning of final exam. You should turn in the Excel
workbook for this assignment with your report.
1. Use http://finance.yahoo.com to obtain daily closing prices for your company. Use Excel to
calculate daily returns for the period January 1, 2010 – December 31, 2010. Calculate,
• Average daily return,
• Standard deviation of returns.
Repeat the analysis for the Dow Jones Industrial Average (DJIA). Ticker is ^DJI.
• Average daily return for your stock, yourstock R
• Standard deviation of daily returns, yourstock σ
• Average daily return for DJIA, DJIA R
• Standard deviation of daily returns on the DJIA, DJIA σ .

## Ratio Analysis and Comparison for Exxon Mobil Corporation and Royal Dutch Shell plc

Ratio Analysis and Comparison for Exxon Mobil Corporation and Royal Dutch Shell plc in \$15 Only
1) Need to choose two firms within the same industry

2) Go to each firm’s Web site, and then access and download their annual reports (financial statements).

3) Using the accounting data from the firms’ financial statements, calculate all ratios for each firm (liquidity ratios, activity ratios, profitability ratios, leverage ratios, and coverage ratio)

Liquidity Ratios

Current Ratio = Current Assets/Current Liabilities

Quick Ratio = Current Assets – Inventory/Current Liabilities