Instructor’s Manual
Fundamentals of Financial
Management
Thirteenth edition
James C. Van Horne
John M. Wachowicz, Jr.
For further instructor material
please visit:
www.pearsoned.co.uk/wachowicz
ISBN: 978-0-273-71364-7
Pearson Education Limited 2009
Lecturers adopting the main text are permitted to download and photocopy the manual as required.
,Pearson Education Limited
Edinburgh Gate
Harlow
Essex CM20 2JE
England
and
Associated Companies around the world
Visit us on the World Wide Web at:
www.pearsoned.co.uk
----------------------------------
First Published 2009
© 2001, 1998 by Prentice-Hall Inc.
© Pearson Education Limited 2009, 2005
The rights of James C. Van Horne and John M. Wachowicz, Jr. to be identified as authors of this
work has been asserted by them in accordance with the Copyright, Designs and Patents Act
1988.
ISBN: 978-0-273-71364-7
All rights reserved. is hereby given for the material in this publication to be reproduced for OHP
transparencies and student handouts, without express permission of the Publishers, for
educational purposes only. In all other cases, no part of this publication may be reproduced,
stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise without either the prior written permission of the
Publishers or a licence permitting restricted copying in the United Kingdom issued by the
Copyright Licensing Agency Ltd, Saffron House, 6-10 Kirby Street, London EC1N 8TS. This
book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of
binding or cover other than that in which it is published, without the prior consent of the
Publishers.
2
© Pearson Education Limited 2008
, Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition, Instructor’s Manual
Contents
Chapters Pages
1. The Role of Financial Management 9
2. The Business, Tax, and Financial Environments 12
3. The Time Value of Money* 19
4. The Valuation of Long-term Securities* 32
5. Risk and Return* 41
6. Financial Statement Analysis* 49
7. Funds Analysis, Cash-flow Analysis, and Financial Planning* 61
8. Overview of Working-capital Management 82
9. Cash and Marketable Securities Management 88
10. Accounts Receivable and Inventory Management 93
11. Short-term Financing 105
12. Capital Budgeting and Estimating Cash Flows 112
13. Capital Budgeting Techniques 120
14. Risk and Managerial (Real) Options in Capital Budgeting 134
(some sections may be omitted in an abbreviated course)
15. Required Returns and the Cost of Capital 144
16. Operating and Financial Leverage (may be omitted in an abbreviated course) 157
17. Capital Structure Determination 174
18. Dividend Policy 184
19. The Capital Market 195
20. Long-term Debt, Preferred Stock, and Common Stock 201
21. Term Loans and Leases (may be omitted in an abbreviated course) 213
22. Convertibles, Exchangeables, and Warrants 225
23. Mergers and Other Forms of Corporate Restructuring 234
24. International Financial Management 251
*Note: Some instructors prefer to cover Chapters 6 and 7 before going into Chapters 3-5. These
chapters have been written so that this can be done without any problem.
3
© Pearson Education Limited 2008
, Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition, Instructor’s Manual
4
© Pearson Education Limited 2008
Fundamentals of Financial
Management
Thirteenth edition
James C. Van Horne
John M. Wachowicz, Jr.
For further instructor material
please visit:
www.pearsoned.co.uk/wachowicz
ISBN: 978-0-273-71364-7
Pearson Education Limited 2009
Lecturers adopting the main text are permitted to download and photocopy the manual as required.
,Pearson Education Limited
Edinburgh Gate
Harlow
Essex CM20 2JE
England
and
Associated Companies around the world
Visit us on the World Wide Web at:
www.pearsoned.co.uk
----------------------------------
First Published 2009
© 2001, 1998 by Prentice-Hall Inc.
© Pearson Education Limited 2009, 2005
The rights of James C. Van Horne and John M. Wachowicz, Jr. to be identified as authors of this
work has been asserted by them in accordance with the Copyright, Designs and Patents Act
1988.
ISBN: 978-0-273-71364-7
All rights reserved. is hereby given for the material in this publication to be reproduced for OHP
transparencies and student handouts, without express permission of the Publishers, for
educational purposes only. In all other cases, no part of this publication may be reproduced,
stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise without either the prior written permission of the
Publishers or a licence permitting restricted copying in the United Kingdom issued by the
Copyright Licensing Agency Ltd, Saffron House, 6-10 Kirby Street, London EC1N 8TS. This
book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of
binding or cover other than that in which it is published, without the prior consent of the
Publishers.
2
© Pearson Education Limited 2008
, Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition, Instructor’s Manual
Contents
Chapters Pages
1. The Role of Financial Management 9
2. The Business, Tax, and Financial Environments 12
3. The Time Value of Money* 19
4. The Valuation of Long-term Securities* 32
5. Risk and Return* 41
6. Financial Statement Analysis* 49
7. Funds Analysis, Cash-flow Analysis, and Financial Planning* 61
8. Overview of Working-capital Management 82
9. Cash and Marketable Securities Management 88
10. Accounts Receivable and Inventory Management 93
11. Short-term Financing 105
12. Capital Budgeting and Estimating Cash Flows 112
13. Capital Budgeting Techniques 120
14. Risk and Managerial (Real) Options in Capital Budgeting 134
(some sections may be omitted in an abbreviated course)
15. Required Returns and the Cost of Capital 144
16. Operating and Financial Leverage (may be omitted in an abbreviated course) 157
17. Capital Structure Determination 174
18. Dividend Policy 184
19. The Capital Market 195
20. Long-term Debt, Preferred Stock, and Common Stock 201
21. Term Loans and Leases (may be omitted in an abbreviated course) 213
22. Convertibles, Exchangeables, and Warrants 225
23. Mergers and Other Forms of Corporate Restructuring 234
24. International Financial Management 251
*Note: Some instructors prefer to cover Chapters 6 and 7 before going into Chapters 3-5. These
chapters have been written so that this can be done without any problem.
3
© Pearson Education Limited 2008
, Van Horne and Wachowicz, Fundamentals of Financial Management, 13th edition, Instructor’s Manual
4
© Pearson Education Limited 2008
