MAC3702 Assignment 2 Semester 2 2018
This document contains suggested solutions , and explanations on how to answer the MAC3702 assignment 2 2018 Semester 2 questions. For assistance whatsapp or call 0655053119 or email firstname.lastname@example.org
MAC3702: Treasury Function
- Role of the treasury function
- Centralised vs. Decentralised
- Working capital management policy and financing (including diagrams and advantages and disadvantages)
- Cash Management (including in-depth example with side notes)
Currency and Interest Rate Risk Management:
- Types of currency risk (including diagrams)
- Theories and risk factors determining exchange rates
- Hedging currency risk
- Money Market Hedges (including diagrams)
- Forward Exchange Hedges
- Interest Rate Risk Defined (including diagram explaining the effect of fixed and floating capital on interest-bearing investment and interest-bearing debt)
- Capital, Debt and Money Markets (including diagram)
- Factors influencing interest rate
- Interest yield curve
- Managing interest rate risk
- Inter-relatedness between interest rate risk and other risks
- Derivative instruments that can be used to hedge interest rate risks
- Treasury bills (including detailed example with workings)
- Bankers Acceptances (including detailed example with workings)
- Negotiable Certificates of Deposit (including detailed example with workings)
- Forward Rate Agreements
MAC3702: Mergers, Acquisitions and Valuations
Notes covering forms of mergers and acquisitions, reasons for mergers and takeovers, why mergers sometimes fail, M&A considerations, financial effects of acquisition and methods of funding on key financial measures and valuations based on cash flow, net asset value, earnings multiple and market capitalisation.
Included in the notes is a diagram showing an overview of study unit, and summary notes of how to calculate the value of mergers and acquisitions based on the various methods.
MAC3702: Advanced Capital Budgeting
Calculations for Net Present Value (NPV), Net Present Value Index (NPVI), Internal Rate of Return (IRR), Modified Internal Rate of Return (MIRR), Payback Period, Discounted Payback Period and Qualitative Factors Applicable to the Investment Decision.
MAC3702: Capital Structure
Notes covering risk and return (debt and financial leverage, portfolio management, SML and CAPM), Sources and Forms of Long-Term Finance and Weighted Average Cost of Capital
MAC3702: Ratio Analysis
Profitability, Capital Structure and Solvency, Liquidity, Return on Invested Capital and Financial Market Ratios.
Under each ratio is an explanation of what the ratio indicates, comments on the ratios and possible improvements.
In addition, there is a section on interpretation which covers the dos and don'ts of answering a financial analysis question.
Lastly, there are a couple of pages encompassing non-financial analysis, limitations of accounting data, limitations of ratio analysis and various risks and mitigating factors.