Financial Management Work: Cash is King, Balance Sheet, and Risk

Financial Management

Please check the attachment "Financial Management work" in the attachment, and answer all the questions.
SHOW ALL OF YOUR WORK.
This is not an open book work. Please do not reference any material from the class or the Internet.
NEED TO SUMBIT ON THE Turnitin.Make sure you did your own work

Financial Management

Here are the rules:

1. First and foremost you MUST complete this alone..


2. This is not an open book work. Please do not reference any material from the class or the Internet.


3. All responses will need to be typed into a MS Word document that you will send to me.  Please make sure that you number each question correctly. I am not setting a minimum or maximum for each answer but they must be complete.

Questions 1-3 are worth 5 points each.  Questions 4-7 are worth 10 points each, and 8-10 are worth 15 points each.  For SHOW ALL OF YOUR WORK!

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?  Given an example
3. What are the primary ways in which capital is transferred between savers and borrowers? Who are the participants and what are the details? Please show the diagrams
4. We discussed extensively the major financial statements that are used to measure a company.  Can you please define the major statements and explain the relationships between them.  Also, can you explain how the following scenarios would impact the statements and which statements are impacted:
   
   
   1. Company sells a building for cash
   
   
   2. Sales increase due to a new product offering and those sales are made on credit
   
   
   3. Company decides to raised funds via fixed income products to expand the company

5. What is the definition of risk?  What is the definition of return?  What is their relationship? Please use a real life financial situation that clearly lays out the relationship.
6. SolarExtreme is a new green energy company that has a patented technology for generating cheap electricity from the sun.  SolarExtreme is expected to grow at G1% per year over the next 2 years, G2% for 3 years, and then G3% a year beyond that.  Assuming the company just paid a dividend of $A per share, a risk free rate of X%, a market return of Y%, and a Beta of Z, please layout the steps, equations and timeline to show how you would calculate the price of the stock. 
Below is a detailed view of the potential scenario returns for CM Enterprises and LM Inc.

Given the above scenarios, what is the expected return for both CM and LM?

The standard deviation for CM is 25% and LM is 27%.   Which is the riskier investment based on the coefficient of variation?

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.

1. 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.

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 to determine whether you will have enough funds to cover the 20% downpayment. Please include all of the factors including a timeline.