FUTURE VALUE OF A SINGLE CASH FLOW

Amount of cash flow $275.00

Annual Percentage Rate (APR) 7.25%
# years in the future to value the cash flow 5
# compounding periods per year 12

Periodic interest rate 0.6042%

Total number of compounding periods 60
Future Value Interest Factor (FVIF) 1.4354

FV of CF in 60 periods at 0.6042% interest per period $394.72

PRESENT VALUE OF A SINGLE CASH FLOW

Amount of cash flow $4,000.00

Discount rate (opportunity cost) 8.35%
# years in the future the cash flow occurs 6
# compounding periods per year 12

Periodic discount rate 0.6958%

Total number of discounting periods 72
Present Value Interest Factor (PVIF) 0.6070

PV of CF occurring in 72 periods discounted at 0.6958% per period $2,427.91

FUTURE VALUE OF AN ANNUITY

Annuity payment $3,000.00

Annual Percentage Rate (APR) 6.00%
# years the annuity is active 5
# compounding periods per year 1

Periodic interest rate 6.0000%

Total number of compounding periods 5
Future Value Interest Factor of the Annuity (FVIFA) 5.6371

FV of an Ordinary Annuity of $3,000.00 for 5 periods at 6.0000% per period $16,911.28

FV of an Annuity Due of $3,000.00 for 5 periods at 6.0000% per period $17,925.96

PRESENT VALUE OF AN ANNUITY

Annuity payment $350.00

Annual Percentage Rate (APR) 8.35%
# years the annuity is active 4
# compounding periods per year 12

Periodic interest rate 0.6958%

Total number of compounding periods 48
Present Value Interest Factor of the Annuity (PVIFA) 40.6875

PV of an Ordinary Annuity of $350.00 for 48 periods at 0.6958% per period $14,240.64

PV of an Annuity Due of $350.00 for 48 periods at 0.6958% per period $14,339.73
PRESENT VALUE OF A PERPETUITY

Periodic Payment $100.00

Periodic Interest Rate 10.00%

PV of $100.00 Perpetuity with a discount rate of 10.00% per period $1,000.00

EFFECTIVE ANNUAL RATE

Annual Percentage Rate (APR) 15.00%

# compounding periods per year 12

EAR of 15.00% APR compounded 12 times per year 16.0755%

PAYMENT AMOUNT FOR AMORTIZED LOAN

Annual Percentage Rate (APR) 8.00%

Length of loan (in years) 4
# payments per year 12
Loan amount $20,000.00

PVIFA 40.9619

Payment Amount $488.26

PRESENT VALUE OF UNEVEN CASH FLOW STREAM

Periodic Discount Rate 8.00%

Period CF
# periods in the future ==> 1 $500.00
2 $800.00
3 $1,000.00
4 $1,500.00
5 $1,000.00
6 $800.00
7 $500.00
8
9
10

PV of cash flow stream $4,521.68

FUTURE VALUE OF UNEVEN CASH FLOW STREAM

Periodic Interest Rate 7.00%

Terminal Period 7

Period CF FV
# periods in the future ==> 1 $500.00 $750.37
2 $800.00 $1,122.04
3 $1,000.00 $1,310.80
4 $1,500.00 $1,837.56
5 $1,000.00 $1,144.90
6 $800.00 $856.00
7 $500.00 $500.00
8
9
10

FV of cash flow stream $7,521.67

BOND VALUATION MODELS

Bond Price Yield to Maturity

Par value $1,000.00 Settlement Date 6/30/2009

Coupon rate 9.00% Maturity Date 6/30/2019
Payments per year 2 Coupon Rate 9.00%
Market interest rate (YTM) 8.00% Price (par = $100) 106.795
# years to maturity 12 Redemption (Par) 100
Frequency (Semi = 2) 2
Coupon payment 45
Periodic market interest rate 4.000% Yield to Maturity 8.00%
# periods to maturity 24
You can use the YTM model above to price a bond based on a known
Payment multiplier (PVIFA) 15.2470 yield to maturity, and then plug that price into the YTC formula on the
Par multiplier (PVIF) 0.3901 right to calculate the yield to call on the same bond.

PV Coupons $686.11
PV Par $390.12
PV Bond $1,076.23
 Yield to Call

Settlement Date 6/30/2009

Call Date 6/30/2013
Coupon Rate 9.00%
Price (par = $100) 106.795
Redemption 109
Frequency (Semi = 2) 2

Yield to Call 8.87%

above to price a bond based on a known

ug that price into the YTC formula on the
call on the same bond.
STOCK VALUATION MODELS

Constant or Zero Growth Model

Last dividend paid (D0) $2.40

Expected constant growth rate 6.0%
Required return on firm's stock (rS) 10.2%

Intrinsic value of stock (P-hat0) $60.57

Nonconstant Growth Model

Required return on firm's stock (rS) 12.5%

Period 0 1 2 3 4 5
Expected Growth Rate 10.0% 10.0% 5.0%
Dividend $1.25 1.3750 1.5125 1.5881
Gordon Model Value 21.1750
Total Cash Flow 1.3750 22.6875
Intrinsic value of stock (P-hat0) $19.15
6 7 8 9 10
NET PRESENT VALUE, INTERNAL RATE OF RETURN & MODIFIED INTERNAL RATE OF RETURN

Discount Rate 9.00%

Period 0 1 2 3 4 5 6 7
Cash Flow ($50,000) $8,000 $10,000 $10,000 $12,000 $15,000 $18,000

NPV $2,460.97
IRR 10.43%
MIRR 9.88%

PAYBACK PERIOD & DISCOUNTED PAYBACK PERIOD

Discount Rate 9.00%

Period 0 1 2 3 4 5 6 7
Cash Flow ($50,000) $8,000 $10,000 $10,000 $12,000 $15,000 $18,000
Cumulative CF ($50,000) ($42,000) ($32,000) ($22,000) ($10,000) $5,000 $23,000

Discounted CF ($50,000) $7,339 $8,417 $7,722 $8,501 $9,749 $10,733

Cum Disc CF ($50,000) ($42,661) ($34,244) ($26,522) ($18,021) ($8,272) $2,461

Payback Period 4.67

Disc. PB Period 5.77
8 9 10

8 9 10
PRO FORMA INCOME STATEMENT ($000s)
Items highlighted in green are inputs
Year of Most Recent Financial Data 2008 not chosen by the analyst.
Expected Sales Growth Rate: 8.0%
Expected Tax Rate: 35.0%
Expected Dividend Payout Ratio: 40.0%

2008 Multiplier 2009 PF

Sales 17,844.0 1.08 19,271.5
Cost of Goods Sold 12,133.9 0.68 13,104.6
Gross Income 5,710.1 6,166.9
Operating Expenses 3,390.4 0.19 3,661.6
Depreciation 1,108.0 1,108.0
EBIT 1,211.7 1,397.3
Interest 486.0 486.0
EBT 725.7 911.3
Taxes (35.0%) 254.0 318.9
Net Income 471.7 592.3

Dividend (40.0% of NI) 188.7 236.9

Retained Earnings 283.0 355.4
green are inputs
PRO FORMA BALANCE SHEET ($000S)

Year of Most Recent Financial Data 2008

2008 Actual Sales: 17,844.0
2009 Forecasted Sales: 19,271.5
2009 Addition to Retained Earnings: 355.4
% AFN funded by ST Debt: 25.0%
% AFN funded by LT Debt: 25.0%
% AFN funded by Common Equity: 50.0% First Second
Pass Funded Pass
2008 Multiplier 2009 PF AFN 2009 PF
Cash 3,841.5 21.53% 4,148.8 4,148.8
Marketable Securities 1,193.2 1,193.2 1,193.2
Accounts Receivable 12,490.8 70.00% 13,490.1 13,490.1
Inventory 4,831.9 27.08% 5,218.5 5,218.5
Total Current Assets 22,357.4 24,050.5 24,050.5
Net Plant, Property & Equipment 89,481.3 89,481.3 89,481.3
Total Assets 111,838.7 113,531.8 113,531.8

Accounts Receivable 10,349.5 58.00% 11,177.5 11,177.5

Notes Payable (ST Debt) 4,400.0 4,400.0 77.5 4,477.5
Accruals 2,498.2 14.00% 2,698.0 2,698.0
Total Current Liabilities 17,247.7 18,275.5 18,353.0
Long Term Debt 36,510.0 36,510.0 77.5 36,587.5
Total Liabilities 53,757.7 54,785.5 54,940.5
Common Equity 53,159.4 53,159.4 155.0 53,314.4
Retained Earnings 4,921.6 5,277.0 5,277.0
Total Common Equity 58,081.0 58,436.4 58,591.4
Total Liabilities & Common Equity 111,838.7 113,221.9 113,531.8

Additional Funds Needed (AFN) 309.9 0.0

This model assumes that the firm has unlimited capacity (there is no need to increase fixed assets to handle the expected incr
 Items highlighted in green are inputs
not chosen by the analyst.

ts to handle the expected increase in sales).