Solution Manual for Foundations of Financial Management, 18th Edition by Stanley B. Block, Geoffrey A. Hirt, and Bartley Danielsen (Chapters 1-21)

 






!"#$%&'$!' %()*+,)-./012).3%)(%,2.0.4205%
&0.06787.1%9:1;%</212).%=>%
10.57>%?@%?5)4AB%
C7)((*7>%'@%D2*1B%?0*157>%E0.27537.%
FGGHIJKLMNOPHIQRNONSHTUVTWHXNOYZYNSH[\NPMYQ]PH^H
F__\OKMNH̀QG\MYQ]PWHFaHbF``HcdFeFfghhiH
H
0123
4563
79



H
j
5



j j


2

, 






!"#$%&%
'#%()*+%,-%./,0"1),+%)2%.1, ,01*%3 ,4#5#,"%
61+0/++1),%7/#+"1),+%
898:;<=>?@@?A=>BCB>=;?>D?A?EECFG>F@>HIIJ9HIIK>;<L?>FG>MFL?DGN?G=>D?MOP<=CFGQ>
R=>S<E>MD?<=PT>CGAD?<E?BU>
>
89H>:;<=><BL<G=<M?E>BF?E><>EFP?>VDFVDC?=FDE;CV>F@@?DQ>:;<=>CE><>N<WFD>BD<SX<AY>F@>=;CE>=TV?>F@>
FDM<GCZ<=CFGQ>
[>EFP?>VDFVDC?=FDE;CV>F@@?DE>=;?><BL<G=<M?>F@>ECNVPCAC=T>F@>B?ACECFG>N<YCGM><GB>PFS>FDM<GCZ<=CFG<P><GB>
FV?D<=CGM>AFE=EU>[>N<WFD>BD<SX<AY>CE>=;<=>=;?D?>CE>OGPCNC=?B>PC<XCPC=T>=F>=;?>FSG?DU>
>
89\:;<=>@FDN>F@>V<D=G?DE;CV><PPFSE>EFN?>F@>=;?>CGL?E=FDE>=F>PCNC=>=;?CD>PC<XCPC=TQ>]^VP<CG>XDC?@PTU>
[>PCNC=?B>V<D=G?DE;CV><PPFSE>EFN?>F@>=;?>V<D=G?DE>=F>PCNC=>=;?CD>PC<XCPC=TU>_GB?D>=;CE><DD<GM?N?G=`>FG?>FD>
NFD?>V<D=G?DE><D?>B?ECMG<=?B>M?G?D<P>V<D=G?DE><GB>;<L?>OGPCNC=?B>PC<XCPC=T>@FD>=;?>B?X=E>F@>=;?>@CDNa>F=;?D>
V<D=G?DE><D?>B?ECMG<=?B>PCNC=?B>V<D=G?DE><GB><D?>PC<XP?>FGPT>@FD>=;?CD>CGC=C<P>AFG=DCXO=CFGU>b;?>PCNC=?B>
V<D=G?DE><D?>GFDN<PPT>VDF;CXC=?B>@DFN>X?CGM><A=CL?>CG>=;?>N<G<M?N?G=>F@>=;?>@CDNU>
>
89cRG><>AFDVFD<=CFG`>S;<=>MDFOV>;<E>=;?>OP=CN<=?>D?EVFGECXCPC=T>@FD>VDF=?A=CGM><GB>N<G<MCGM>=;?>
defghifjklmdnopqelmldedr>
b;?>XF<DB>F@>BCD?A=FDEU>
0123



>
89s:;<=>BFAON?G=>CE>G?A?EE<DT>=F>@FDN><>AFDVFD<=CFGQ>
b;?><D=CAP?E>F@>CGAFDVFD<=CFGU>
4563



>
89t:;<=>CEEO?>BF?E><M?GAT>=;?FDT>?^<NCG?Q>:;T>CE>C=>CNVFD=<G=>CG><>VOXPCA>AFDVFD<=CFG>D<=;?D>=;<G>CG><>
79



VDCL<=?>AFDVFD<=CFGQ>
[M?GAT>=;?FDT>?^<NCG?E>=;?>D?P<=CFGE;CV>X?=S??G>=;?>FSG?DE>F@>=;?>@CDN><GB>=;?>N<G<M?DE>F@>=;?>@CDNU>RG>
VDCL<=?PT>FSG?B>@CDNE`>N<G<M?N?G=><GB>=;?>FSG?DE><D?>OEO<PPT>=;?>E<N?>V?FVP?U>u<G<M?N?G=>FV?D<=?E>
=;?>@CDN>=F>E<=CE@T>C=E>FSG>MF<PE`>G??BE`>@CG<GAC<P>D?vOCD?N?G=E><GB>=;?>PCY?U>[E><>AFNV<GT>NFL?E>@DFN>
5



VDCL<=?>=F>VOXPCA>FSG?DE;CV`>N<G<M?N?G=>GFS>D?VD?E?G=E><PP>FSG?DEU>b;CE>VP<A?E>N<G<M?N?G=>CG>=;?>
<M?GAT>VFEC=CFG>F@>N<YCGM>B?ACECFGE>CG>=;?>X?E=>CG=?D?E=>F@><PP>E;<D?;FPB?DEU>


2

, 





!"#$%#&'%()*$($+$(,)#-%().'*$,&*%(/0,&$#)$%()%$,1#23*%4+*()'**%5,&-167
89:;<=97>?=@>@<@>A?;B7>?C9=@AD=7=<:E7;=7F9?=>A?7G<?H=7;?H7I<@<;B7G<?H=7AJ?7;7B;DK97F9D:9?@;K97AG7I;LAD7
MNON7:AIF;?>9=P7@E9Q7;D97E;C>?K7IAD97@A7=;Q7;RA<@7@E97J;Q7F<RB>:BQ7AJ?9H7:AIF;?>9=7;D97I;?;K9HN7S=7;7
KDA<FP7@E9Q7E;C97@E97;R>B>@Q7@A7CA@97B;DK97RBA:T=7AG7=E;D9=7GAD7@E979B9:@>A?7AG7;7RA;DH7AG7H>D9:@AD=P7JE>:E7>=7
=<FFA=9H7@A7D<?7@E97:AIF;?Q7>?7;?79GG>:>9?@P7:AIF9@>@>C97I;??9DN7UE97@ED9;@7AG7R9>?K7;RB97@A7D9FB;:97FAAD7
F9DGADI>?K7RA;DH=7AG7H>D9:@AD=7I;T9=7>?=@>@<@>A?;B7>?C9=@AD=7V<>@97>?GB<9?@>;BN7O>?:97@E9=97>?=@>@<@>A?=P7B>T97
F9?=>A?7G<?H=7;?H7I<@<;B7G<?H=P7D9FD9=9?@7>?H>C>H<;B7JADT9D=7;?H7>?C9=@AD=P7@E9Q7E;C97;7D9=FA?=>R>B>@Q7@A7
=997@E;@7@E97G>DI7>=7I;?;K9H7>?7;?79GG>:>9?@7;?H79@E>:;B7J;QN7
7

WXEQ7>=7FDAG>@7I;Y>I>Z;@>A?P7RQ7>@=9BGP7;?7>?;FFDAFD>;@97KA;B[7XE;@7>=7I9;?@7RQ7@E97KA;B7AG7
I;Y>I>Z;@>A?7AG7=E;D9EABH9D7J9;B@E[7
UE97FDARB9I7J>@E7;7FDAG>@7I;Y>I>Z;@>A?7KA;B7>=7@E;@7>@7G;>B=7@A7@;T97;::A<?@7AG7D>=TP7@E97@>I>?K7AG7@E97
4')'\($*%(*%),$%],)*(1'&'1^%#)1%0&,\($%/'#*+&'/')$%(*%#%.'&2%()'_#]$%0&,]'**%̀a"'%b,#-%,\%*"#&'",-1'&*3%
J9;B@E7I;Y>I>Z;@>A?7>IFB>9=7@E;@7@E97G>DI7J>BB7;@@9IF@7@A7;:E>9C97@E97E>KE9=@7FA==>RB97@A@;B7C;B<;@>A?7>?7
@E97I;DT9@FB;:9N7c@7>=7@E97A?97AC9DD>H>?K7ARL9:@>C97AG7@E97G>DI7;?H7=EA<BH7>?GB<9?:979C9DQ7H9:>=>A?N7
7

dXE9?7HA9=7>?=>H9D7@D;H>?K7A::<D[7XE;@7KAC9D?I9?@7;K9?:Q7>=7D9=FA?=>RB97GAD7FDA@9:@>?K7;K;>?=@7@E97
<?9@E>:;B7FD;:@>:97AG7>?=>H9D7@D;H>?K[7
c?=>H9D7@D;H>?K7A::<D=7JE9?7;?QA?97J>@E7?A?F<RB>:7>?GADI;@>A?7R<Q=7AD7=9BB=7=9:<D>@>9=7@A7@;T97;HC;?@;K97
AG7@E;@7FD>C;@97>?GADI;@>A?N7UE97O9:<D>@>9=7;?H7eY:E;?K97fAII>==>A?7>=7D9=FA?=>RB97GAD7FDA@9:@>?K7
I;DT9@=7;K;>?=@7>?=>H9D7@D;H>?KN7c?7@E97F;=@P7F9AFB97E;C97KA?97@A7L;>B7GAD7@D;H>?K7A?7?A?F<RB>:7
>?GADI;@>A?N7UE>=7E;=7>?:B<H9H7:AIF;?Q7AGG>:9D=P7>?C9=@I9?@7R;?T9D=P7FD>?@9D=7JEA7E;C97>?GADI;@>A?7
R9GAD97>@7>=7F<RB>=E9HP7;?H79C9?7@D<:T7HD>C9D=7JEA7H9B>C9D7R<=>?9==7I;K;Z>?9=7;?H7D9;H7FA=>@>C97AD7
?9K;@>C97;D@>:B9=7;RA<@7;7:AIF;?Q7R9GAD97@E97I;K;Z>?97>=7A?7@E97?9J==@;?H=7;?H7@E9?7FB;:97@D;H9=7AD7E;C97
GD>9?H=7FB;:97@D;H9=7R;=9H7A?7@E;@7>?GADI;@>A?N7UE97Oef7E;=7FDA=9:<@9H7;?QA?97JEA7FDAG>@=7GDAI7>?=>H97
0123



>?GADI;@>A?N7
7


gc?7@9DI=7AG7@E97B>G97AG7@E97=9:<D>@>9=7AGG9D9HP7JE;@7>=7@E97H>GG9D9?:97R9@J99?7IA?9Q7;?H7:;F>@;B7
4563



I;DT9@=[7
hA?9Q7I;DT9@=7D9G9D7@A7@EA=97I;DT9@=7H9;B>?K7J>@E7=EAD@@9DI7=9:<D>@>9=7@E;@7E;C97;7B>G97AG7A?97Q9;D7AD7
B9==N7f;F>@;B7I;DT9@=7D9G9D7@A7=9:<D>@>9=7J>@E7;7B>G97AG7IAD97@E;?7A?97Q9;DN7
79



7



XE;@7>=7@E97H>GG9D9?:97R9@J99?7;7FD>I;DQ7;?H7;7=9:A?H;DQ7I;DT9@[7
S7FD>I;DQ7I;DT9@7D9G9D=7@A7@E97<=97AG7@E97G>?;?:>;B7I;DT9@=7@A7D;>=97?9J7G<?H=7GAD7@E97:ADFAD;@>A?N7SG@9D7
5



@E97=9:<D>@>9=7;D97=ABH7@A7@E97F<RB>:7i>?=@>@<@>A?=7;?H7>?H>C>H<;B=jP7@E9Q7@D;H97>?7@E97=9:A?H;DQ7I;DT9@7


2

,  





!"#$"%&'(&)#*#$&#$"#+#&,'"-.(/#0.(1#+.#2($,&#.(#,'"$"3.44/#,+."5$"5#.&#$"%&'(&#
3/#."-#
&44#&,3($$&#
.&-#'"#+#62,.$'"&#'7#,'(2'(.#2('&2,&)#
#
898:;&&30#/'3#.(#4''1$"5#.#0."/#,'02."$&#!$+#<3.4#($&1)#=+$,+#'"&#!$44#+.%#+#+$5+&#&',1#
2($,&>#
?$%"#,'02."$&#!$+#<3.4#($&1@#+'&#,'02."$&#!$+#62,.$'"&#'7#+$5+#(3("#!$44#+.%#+$5+(#
,'00'"#&',1#2($,&#(4.$%#'#+'&#,'02."$&#!$+#62,.$'"&#'7#2''(#(3("&)#
#
898AB'!#$&#+#$0#%.43#'7#0'"/#,'",2#(4.-#'#+#%.43.$'"#'7#&',1&>#
C+#%.43#'7#."#$"%&0"#+.#$&#62,-#'#.("#0'"/#$"#+#733(#,."#
#,.4,34.-#3&$"5#$09%.43#
'7#0'"/#2($",$24&)#D'(2'(.$'"&#.(#62,-#'#2./#-$%$-"-&#'#+$(#&+.(+'4-(&)#C+#,3(("#%.43#
'7#EFGHGIJKEKLGIMNONMGPMHINHIEFGIQLGHGPEIORSKGTIUFGIQLGHGPEIORSKGIVJIRIHEVWXYHIJKEKLGIMNONMGPMHIHFVKSMIZGI
EFGIHR[GIRHIEFGIHEVWXYHIWKLLGPEIQLNWGT#
#
\]^_`abcdc
eafgahcijckllimn`gnoc
p$&,3&&$'"#q3&$'"&#
:98)#p$&,3&&#&'0#7$".",$.4#%.($.
4&#+.#.77,#+#2($,9.("$"5&#(.$')#
C+#2($,9.("$"5&#(.$'#!$44#
#$"743",-#
/#+#.("$"5&#."-#&.4&#5('!+#'7#+#7$(0@#+#($&1#'(#
%'4.$4$/#$"#2(7'(0.",@#+#-
9<3$/#&(3,3(#'7#+#7$(0@#+#-$%$-"-#2./0"#2'4$,/@#+#<3.4$/#'7#
0.".50"@#."-#.#"30
(#'7#'+(#7.,'(&)#C+#(.$'#"-&#'#
#733(9'($"-@#."-#+#0'(#2'&$$%#
0123



+#'34''1@#+#+$5+(#$#!$44#
)#
#
:9:)#=+.#$&#+#-$77(",#
!"#
''1#%.43#2(#&+.(#'7#,'00'"#&',1#."-#0.(1#%.43#2(#&+.(>#
4563



=+/#-'&#+$&#-$&2.($/#',,3(>#
r''1#%.43#2(#&+.(#$&#.(($%-#.#
/#.1$"5#+#,'&#'7#+#.&&&#."-#&3
(.,$"5#'3#4$.
$4$$&#."-#
2(7((-#&',1#."-#-$%$-$"5#
/#+#"30
(#'7#,'00'"#&+.(&#'3&."-$"5)#*#$&#
.&-#'"#+#+$&'($,.4#
79



,'&#'7#+#.&&&)#s.(1#%.43#2(#&+.(#$&#
.&-#'"#+#,3(("#.&&&&-#%.43#'7#+#7$(0#$"#+#
0.(124.,#."-#0./#
.(#4$4#(4.$'"&+$2#'#'($5$".4#,'&)#r&$-&#+#-$&2.($/#
!"#
''1#."-#
0.(1#%.43#,.3&-#
/#+#+$&'($,.4#,'&#.22('.,+@#'+(#,'"($
3$"5#7.,'(&#.(#+#5('!+#2('&2,&#
7'(#+#7$(0@#+#<3.4$/#'7#0.".50"@#."-#+#$"-3&(/#'34''1)#C'#+#6"#+&#.(#<3$#"5.$%#
'(#2'&$$%t#0.(1#%.43#0./#-$77(#!$-4/#7('0#
''1#%.43)#
5



#


2