Solution manual
fundamentals of corporate finance 5th edition
by Robert Parrino and David Kidwell
All Chapters 1-21 Covered
,TABLE OF CONTENT
Q Q
1.QTheQFinancialQManagerQandQtheQFirm
2.QTheQFinancialQSystemQandQtheQLevelQofQInterestQRates
3.QFinancialQStatements,QCashQFlows,QandQTaxes
4.QAnalyzingQFinancialQStatements
5.QTheQTimeQValueQofQMoney
6.QDiscountedQCashQFlowsQandQValuation
7.QRiskQandQReturn
8.QBondQValuationQandQtheQStructureQofQInterestQRates
9.QStockQValuation
10.QTheQFundamentalsQofQCapitalQBudgeting
11.QCashQFlowsQandQCapitalQBudgeting
12.QEvaluatingQProjectQEconomics
13.QTheQCostQofQCapital
14.QWorkingQCapitalQManagement
15.QHowQFirmsQRaiseQCapital
16.QCapitalQStructureQPolicy
17.QDividends,QStockQRepurchasesQandQPayoutQPolicy
18.QBusinessQFormation,QGrowth,QandQValuation
19.QFinancialQPlanningQandQManagingQGrowth
20.QOptionsQandQCorporateQFinance
21.QInternationalQFinancialQManagement
,
, Fundamentals of Corporate Finance, 5th Edition by Robert Parrino, David Kidwell, B
Q Q Q Q Q Q Q Q Q Q Q
ates & Gillan.
Q Q Q
Chapter 1-21 Q
Chapter 1 Q
The Financial Manager and the Firm
Q Q Q Q Q
Before You Go On Questions and Answers
Q Q Q Q Q Q
Section 1.1 Q
1. WhatQareQtheQthreeQbasicQtypesQofQfinancialQdecisionsQmanagersQmustQmake?
TheQthreeQbasicQdecisionsQeachQbusinessQmustQmakeQareQtheQcapitalQbudgetingQdecision,Qth
eQfinancingQdecision,QandQtheQworkingQcapitalQmanagementQdecision.QTheseQdecisionsQdeter
mineQwhichQproductiveQassetsQtoQbuy,QhowQtoQpayQforQorQfinanceQtheseQpurchases,QandQhow
QtoQmanageQtheQday-to-dayQfinancialQmattersQsoQtheQcompanyQcanQpayQitsQbills.
2. ExplainQ whyQ youQ wouldQ makeQ anQ investmentQ ifQ theQ valueQ ofQ theQ expectedQ cashQ flo
wsQexceedsQtheQcostQofQtheQproject.
YouQwouldQacceptQanQinvestmentQprojectQwhoseQcashQflowsQexceedQtheQcostQofQtheQprojectQ
becauseQsuchQprojectsQwillQincreaseQtheQvalueQofQtheQfirm,QmakingQtheQownersQwealthier.QM
ostQpeopleQstartQaQbusinessQtoQincreaseQtheirQwealth.QRememberQthatQtheQcostQofQcapitalQ(ti
meQvalueQofQmoney)QwillQaffectQtheQdecisionQaboutQwhetherQtoQinvest.
3. WhyQareQcapitalQbudgetingQdecisionsQamongQtheQmostQimportantQdecisionsQinQtheQlifeQof
QaQfirm?
TheQcapitalQbudgetingQdecisionsQareQconsideredQtheQmostQimportantQinQtheQlifeQofQtheQfirmQb
ecauseQtheseQdecisionsQdetermineQwhichQproductiveQassetsQtheQfirmQpurchases,QandQwhichQ
assetsQgenerateQmostQofQtheQfirm’sQcashQflows.QFurthermore,QcapitalQbudgetingQdecisionsQar
e
fundamentals of corporate finance 5th edition
by Robert Parrino and David Kidwell
All Chapters 1-21 Covered
,TABLE OF CONTENT
Q Q
1.QTheQFinancialQManagerQandQtheQFirm
2.QTheQFinancialQSystemQandQtheQLevelQofQInterestQRates
3.QFinancialQStatements,QCashQFlows,QandQTaxes
4.QAnalyzingQFinancialQStatements
5.QTheQTimeQValueQofQMoney
6.QDiscountedQCashQFlowsQandQValuation
7.QRiskQandQReturn
8.QBondQValuationQandQtheQStructureQofQInterestQRates
9.QStockQValuation
10.QTheQFundamentalsQofQCapitalQBudgeting
11.QCashQFlowsQandQCapitalQBudgeting
12.QEvaluatingQProjectQEconomics
13.QTheQCostQofQCapital
14.QWorkingQCapitalQManagement
15.QHowQFirmsQRaiseQCapital
16.QCapitalQStructureQPolicy
17.QDividends,QStockQRepurchasesQandQPayoutQPolicy
18.QBusinessQFormation,QGrowth,QandQValuation
19.QFinancialQPlanningQandQManagingQGrowth
20.QOptionsQandQCorporateQFinance
21.QInternationalQFinancialQManagement
,
, Fundamentals of Corporate Finance, 5th Edition by Robert Parrino, David Kidwell, B
Q Q Q Q Q Q Q Q Q Q Q
ates & Gillan.
Q Q Q
Chapter 1-21 Q
Chapter 1 Q
The Financial Manager and the Firm
Q Q Q Q Q
Before You Go On Questions and Answers
Q Q Q Q Q Q
Section 1.1 Q
1. WhatQareQtheQthreeQbasicQtypesQofQfinancialQdecisionsQmanagersQmustQmake?
TheQthreeQbasicQdecisionsQeachQbusinessQmustQmakeQareQtheQcapitalQbudgetingQdecision,Qth
eQfinancingQdecision,QandQtheQworkingQcapitalQmanagementQdecision.QTheseQdecisionsQdeter
mineQwhichQproductiveQassetsQtoQbuy,QhowQtoQpayQforQorQfinanceQtheseQpurchases,QandQhow
QtoQmanageQtheQday-to-dayQfinancialQmattersQsoQtheQcompanyQcanQpayQitsQbills.
2. ExplainQ whyQ youQ wouldQ makeQ anQ investmentQ ifQ theQ valueQ ofQ theQ expectedQ cashQ flo
wsQexceedsQtheQcostQofQtheQproject.
YouQwouldQacceptQanQinvestmentQprojectQwhoseQcashQflowsQexceedQtheQcostQofQtheQprojectQ
becauseQsuchQprojectsQwillQincreaseQtheQvalueQofQtheQfirm,QmakingQtheQownersQwealthier.QM
ostQpeopleQstartQaQbusinessQtoQincreaseQtheirQwealth.QRememberQthatQtheQcostQofQcapitalQ(ti
meQvalueQofQmoney)QwillQaffectQtheQdecisionQaboutQwhetherQtoQinvest.
3. WhyQareQcapitalQbudgetingQdecisionsQamongQtheQmostQimportantQdecisionsQinQtheQlifeQof
QaQfirm?
TheQcapitalQbudgetingQdecisionsQareQconsideredQtheQmostQimportantQinQtheQlifeQofQtheQfirmQb
ecauseQtheseQdecisionsQdetermineQwhichQproductiveQassetsQtheQfirmQpurchases,QandQwhichQ
assetsQgenerateQmostQofQtheQfirm’sQcashQflows.QFurthermore,QcapitalQbudgetingQdecisionsQar
e
