财务管理专业英语练习题

专业英语作业

Topic 1:

Agency is an area of commercial institution dealing with a contractual or quasi-contractual, or non-contractual set of relationships when a person, called the agent, is authorized to act on behalf of another (called the principal) to create a legal relationship with a third party.

Money market is a component of the financial markets for assets involved in short-term borrowing and lending with original maturities of one year or shorter time frames.

Capital market is a market for securities (debt or equity), where business enterprises and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year.

Spontaneous financing refers to the automatic source of short term funds arising in the normal course of short term course of business. Trade credit and out standing expenses are examples of spontaneous financing.

Financial intermediary is a financial institution that connects surplus and deficit agents.

Secured loan is a loan in which the borrower pledges some asset as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. Unsecured Loan A loan that is issued and supported only by the borrower's creditworthiness, rather than by some sort of collateral.

Marketability is a measure of the ability of a security to be bought and sold for a price at which similar items are dealling.

Perpetuity is an annuity that has no end, or a stream of cash payments that continues forever. Hedge-matching In asset management, the coordination of an organization's cash inflows with cash outflows by matching the maturity of income generating assets (such as certificates of deposit) with the maturity of interest incurring liabilities (debts).

Topic 2:

美国IBM从1984年左右开始由兴到衰，由年盈利66亿美元到1992年亏损达49.7亿美元。衰落的一个主要原因是失效的董事会监督。一般而言，董事会监督是公司内部治理结构的一大制衡力量：董事会有权罢免董事长，影响重大经营问题的决策。然而，在IBM公司，其原来的董事会中3/4成员基本上只起装饰作用，他们虽然是知名的人物，但很少真正关心公司的经营状况，董事会已沦为形式。

IBM corporate reached a turning point in 1984 after years of stable rises. It has been declining since then, with an income of $6.6 billion at first and a loss as much as $4.97 billion in 1992. A main cause of this declining is the invalid supervision by the board of directors. Generally speaking, such a supervision is a major balancing force within the corporate governance structure. The board of directors is authorized to remove the chairman, and exert influences on the major operating decisions. However, three fourths of the former directors of IBM were basically "ornamental". Although they are well-known persons, they seldom paid close attention to the operating conditions of IBM, and the board meetings are just reduced to an empty formalism.

Topic 3:

金玉其外，败絮其中。帕玛拉特公司是意大利最大、欧洲第四大的食品企业，在意大利乳制品市场的占有率为50%。然而，有人发现，帕玛拉特自称的40亿欧元的流动资金并不存在，同时，800万欧元的股东权益也蒸发了。帕玛拉特丑闻是欧洲历史上最大的破产事件，其损失大约是意大利GNP的1.5%，该比例比安然和世通合计对于美国GNP的还要大。

As an apple of Sodom, Parmalat was the biggest food group in Italy and the fourth biggest in Europe. It had a share of the Italian diary market as much as 50%. All at once, the current assets of EUR 4 billion claimed by Parmalat was found not to exist at all. And also its owner's equity of EUR 8 million disappeared completely. The Parmalat scandal is the largest bankruptcy in European history. As a result, Italian GNP suffered from a loss of approximately 1.5 percent. This percentage exceeds that of American GNP reduction caused by Enron and WorldCom Fails altogether.

Topic 4:

本部分所涉猎的财务比率分析仅仅是财务分析学内容的一小部分，也有学者将其称为传统的财务分析。传统的财务分析具体包括盈利能力分析、偿债能力或支付能力分析、营运能力分析（或投资分析、筹资分析、经营分析，或资产负债表分析、利润表分析、现金流量表分析）等，现在国内外越来越多的财务分析教材拓展了传统的财务分析的范畴，将战略分析、会计分析、价值评估分析、预测分析等涵盖进来。

The financial ratio analysis covered in this topic is just the tip of the iceberg. Some scholars take this as the conventional financial analysis. Specifically, the conventional financial analysis involves profitability analysis, debt paying ability analysis, and operating capacity analysis (sometimes investing analysis, financing analysis and operating analysis are concerned, and sometimes balance sheet analysis, income statement analysis and cash flow statement analysis are adopted). Nowadays more and more textbooks both home and abroad have adopted extended-range conventional financial analysis which covers strategic analysis, accounting analysis, valuation analysis and forecasting analysis, etc.

Topic 5: 1. If a bond sells at a high premium, then which of the following relationships hold true? (P0 represents the price of a bond and YTM is the bond's yield to maturity.) a. P0 < par and YTM > the coupon rate.

b. P0 > par and YTM > the coupon rate.

c. P0 > par and YTM < the coupon rate.

d. P0 < par and YTM < the coupon rate.

选(c)

2. Your late Uncle Vern’s will entitle you to receive $1000 at the end of every other year for the next two decades. The first cash flow is two years from now. At a 10 percent compound annual interest rate, what is the present value of this unusual cash-flow pattern?

Convert $1000 every 2 years into an equivalent annual annuity pattern. Solving for a 2-year annuity that is equivalent to a future $1000 to be received at the end of year 2, we get

FVA2=$1000=R(FVIFA10%,2)=R(2.10)

Therefore, R=$1000/2.10=$476.19.

PVA20=$476.19(PVIFA10%,20)=$476.19(8.514)=$4054.28

2 A $1000-face-value bond has a current market price of $935, an 8 percent coupon rate, and 10 remaining years until maturity. Interest payments are made semiannually. Before you do any calculations, decide if the yield to maturity is above or below the coupon rate. Why?

a. What is the implied market-determined semiannual discount rate on this bond?

b. Using your answer to Part (a), what is the bond’s (i) (nominal annual) yield to maturity? (ii) (effective annual) yield to maturity.

The yield to maturity is higher than the coupon rate of 8 percent because the bond sells at a discount from its face value. The (nominal annual) yield to maturity as reported in bond circles is equal to (2*Kd/2). The (effective annual) YTM is equal to (1+Kd/2)2-1.The problem is set up as follows:

$935=$40(PVIFAKd/2,20)+MV(PVIFKd/2,20)

a. Solving for Kd/2 in this expression yields 4.5 percent.

b. (i) The (nominal annual) YTM is then 2*4.5%=9%.

(ii) The (effective annual) YTM is (1+0.045)2-1=9.2025%.

Topic 7:

大腾玩具公司两年前就开始使用一种塑膜机器。该机器采用直线折旧法，残值为500元，剩余使用年限还有6年。其当前的账面价值为2600元，现时可以3000元的价格出售。

现在大腾公司有一可替代的机器，现时市价为8000元。预期该机器的使用寿命为6年，残值为800元，采用双倍余额递减法计提折旧。该重置机器可使每年的销售额上升1000元，付现成本每年下降1500元。

大腾适用的税率为40%，必要回报率为15%。请问大腾公司是否应当采纳该重置项目？

Titan Toys has been using a plastic film machine since two years ago. This machine, depreciated on a straight-line basis, has an expected remaining life of 6 years and a $500 residual value. It, with a $2600 carrying value, can be sold for $3000 currently.

Now Titan Toys is considering to replace it with a new machine. Presently, this new machine is sold for $8000. It has an estimated useful life of 6 years and a $800 residual value. Double declining balance method will be adopted to depreciate this machine. This replacement, if conducted, will increase the annual sales by $1000 and decrease the cash costs by $1500 annually.

With an applicable tax rate of 40% and a required return of 15%, should Titan Toys conduct this

replacement project?

(1) Differences between annual depreciation of the two machines are computed as follows: Annual depreciation with the old one in use is ($2600-$500)/6=$350

Otherwise, the annual depreciation will be

Year 1: $8000*(2/6) = $2666.67

Year 2: ($8000-$2666.67)*(2/6) = $1777.78

Year 3: ($8000-$2666.67-$1777.78)*(2/6) = $1185.18

Year 4: ($8000-$2666.67-$1777.78-$1185.18)*(2/6) = $790.12

Year 5: ($8000-$2666.67-$1777.78-$1185.18-$790.12)*(2/6) = $526.75

Year 6:

$8000-$2666.67-$1777.78-$1185.18-$790.12-$526.75-$800= $253.5

So, differences between annual depreciation are

Year 1: $2666.67-$350 = $2316.67

Year 2: $1777.78-$350 = $1427.78

Year 3: $1185.18-$350 = $835.18

Year 4: $790.12-$350 = $440.12

Year 5: $526.75-$350 = $176.75

Year 6: $235.5-$350 = -$114.5

(2) Incremental cash flows once the replacement is conducted are

Year 0: -$8000+$3000-$(3000-2600)*40% = -$5160

Year 1: $(1000+1500)*(1-40%)+$2316.67*40% = $2426.668

Year 2: $(1000+1500)*(1-40%)+$1427.78*40% = $2071.112

Year 3: $(1000+1500)*(1-40%)+$835.18*40% = $1834.072

Year 4: $(1000+1500)*(1-40%)+$440.12*40% = $1676.048

Year 5: $(1000+1500)*(1-40%)+$176.75*40% = $1570.7

Year 6: $(1000+1500)*(1-40%)-$114.15*40%+$800-$500 = $1754.2

(3) The net present value of this replacement project can be determined as

$2426.668*PVIF(15%, 1)+$2071.112*PVIF(15%, 2)+$1834.072*PVIF(15%, 3) +$1676.048*PVIF(15%, 4)+$1570.7*PVIF(15%, 5)+$1754.2*PVIF(15%, 6) -$5160 = $2,219.73 Since this replacement project has a positive NPV, Titan Toys should adopt it.

Topic 11:

1.Porras Pottery Products, Inc., spends $220000 per annum on its collection department. The company has $12 million in credit sales, its average collection period is 2.5 months, and the percentage of bad-debt losses is 4 percent. The company believes that if it were to double its collection personnel, it could bring down the average collection period to 2 months and bad-debt losses to 3 percent. The added cost is $180000, bringing total collection expenditures to $400000 annually. Is the increased effort worthwhile if the before-tax opportunity cost of funds is 20 percent? If it is 10 percent?

a. If the opportunity cost of funds is 20 percent, the net income resulted from the increased effort is

($12000000/4.8 - $12000000/6) ×20% + $12000000×(4%-3%) – $180000

=$40000 > 0

So the increased effort is worthwhile.

b. If the opportunity cost is 10 percent, the net income resulted will be

$500000×10% + $120000 - $180000

=-$10000 < 0

So the increased effort is not worthwhile.

2.A college bookstore is attempting to determine the optimal order quantity for a popular book on psychology. The store sells 5000 copies of this book a year at a retail price of $12.50, and the cost to the store is 20 percent less, which represents the discount from the publisher. The store figures that it costs $1 per year to carry a book in inventory and $100 to prepare an order for new books. a) Determine the economic order quantity.

b) What implicit assumptions are being made about the annual sales rate?

a. The economic order quantity

EOQ = √2×5000×100／1 = 1000

b. The implicit assumption is that the annual sales rate remains constant and balanced.

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