FIN254 Assignment#1 (Based on Chapter 2)

1. Unilever Inc purchased new toothpaste machinery 4 years ago with Tk. 5 million. The machinery can be sold to Brothers & o. today !or Tk. ".# million. Unilever$s current balance sheet has net !i%ed asset o! &.' million( current liabilities 1." million and networking capital to be 41)())) Taka. The market value o! the current asset is Tk. 1.# million. *hat is the market value o! Unilever$s assets today+ *hat is the book value+ &. ,avana ,- reported the !ollowing in!ormation on its &))# income statement. /ales. 1'#())) osts. 00())) 1ther e%penses. 11(1)) 2epreciation. 14(4)) Interest. &&(5)) Ta%es. 14(#&) 2ividends 15(4)) 2uring the year the !irm issued 3("5) in new e4uity and redeemed '(4)) outstanding loans. a. *hat is the operating cash !low+ b. *hat is the cash !low to creditors+ c. *hat is the cash !low to stock holders+ d. I! the net !i%ed assets increased by 1&))) during the years( what was the addition to ,* + ". /ay( orporation 5 has U/6##(### and orporation B has U/6 #(###(### in ta%able income. a. *hat is the ta% bill o! the !irms+ 7lease use ta% rate !rom the book. b. /uppose( each !irm identi!ied a new pro8ect that will increase the income by 61)())). 9ow much additional ta% does each !irm have to pay+ Is the amount same+ *hy:why not+

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Due Date: 10th October, 2013 (Thursday)

Additional Instructions: 1. 7lease do not copy somebody else$s assignment or provide your solution to somebody else. I! you are caught( you will get a ?ero. &. @ou may submit your assignment in either hand<written or computer composed !ormat. In case o! computer composed !ormat( you need to email me the so!t copy =with appropriate

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sub8ect mentioning the assignment number( your name( id( course( section( etc.> in addition to the hardcopy submission. 5<4 si?e paper is pre!erred !or the assignment. 5 cover page is a must. @ou may use the sample cover page that I have made available along with the assignment !ile. @ou must complete the assignment be!ore coming to the class on the due date. I! anyone is seen doing the assignment in the class( s:he will get a ?ero. @our assignment must look pro!essional. 1therwise you may lose marks. 9owever( this does not mean you have to do spiral or other types o! binding( or use color printing. Aust staple your papers and submit. @ou may lose marks i! you !ail to !ollow the instructions properly.

3. Bate assignments would be accepted with &)C penalty i! submitted by the ne%t class( 5)C penalty i! submitted later but within a week !rom the assigned date. No assignment would be accepted after a week or two classes (whichever is shorter) from the submission due date .