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【第二周】2017年CFA二级考试Corporate Finance 经典习题来挑战

编辑:Lin/时间:2017-01-05/浏览:675 views



Marfa Hernandez is a sell-side analyst covering the electronics industry in Spain.One of the companies she follows,SG Electronics,S.A.,has recently announced plans to begin producing and selling a new series of video cameras.Hernandez estimates that this project will increase the value of the company and,consequently,she plans on changing her research opinion on the company from a”hold”to a”buy”.Her initial financial predictions for the project are:

  • Fixed capital equipment outlay is€2,750,000.
  • At the beginning of the project,a required increase in current assets of€200,000 and a required increase in current liabilities of€125,000.
  • Straight-line depreciation to zero over a five-year life.
  • Project life of five years.
  • Incremental annual unit sales of 3,000 at a unit price of€600.
  • Annual fixed cash expenses of€125,000;variable cash expenses of€125 per unit.
  • The capital equipment is expected to be sold for€450,000 at the end of Year 5.At the end of the project,the net working capital investment will be recovered.
  • Tax rate of 40 percent.
  • Based on the capital asset pricing model,the required rate of return is 12 percent.

Hernandez estimates the expected net present value(NPV)of the project to be€975,538 and the internal rate of return(IRR)to be 24.6 percent.She also performs a sensitivity analysis by changing the input variable assumptions used in her initial analysis.

When reviewing Hernandez’s work,her supervisor,Arturo Costa,notes that she did not include changes in the depreciation method,initial fixed capital outlay,or inflation assumptions in her sensitivity analysis.As a result,Costa asks the following questions:

Question 1″What would be the effect on the project’s NPV if the initial fixed capital equipment outlay increased from€2,750,000 to€3,000,000,everything else held constant?”

Question 2″How would a higher than expected inflation rate affect the value of the real tax savings from depreciation and the value of the real after-tax interest expense,everything else held constant?”

Question 3″You are using a required rate of return of 12 percent when the company’s weighted average cost of capital(WACC)is 10 percent.Why are you using a required rate of return for the project greater than the company’s WACC?”

Before ending the meeting,Costa tells Hernandez:”Last year the company produced a prototype at a cost of€500,000.Now management is having doubts about the market appeal of the product in its current design,and so they are considering delaying the start of the project for a year,until the prototype can be shown to industry experts:

1.Using Hernandez’s initial financial predictions,the estimated annual after-tax operating cash flow is closest to:




2.Using Hernandez’s initial financial predictions,the estimated terminal year after-tax non-operating cash flow is closest to:




3.Hernandez’s best response to Costa’s first question is that the project’s NPV would decrease by an amount closest to:




4.Hernandez’s best response to Costa’s second question is that:

A.real tax savings from depreciation and real interest expense would be lower.

B.real tax savings from depreciation would be higher and real interest expense would be lower.

C.real tax savings from depreciation would be lower and real interest expense would be higher.

5.Hernandez’s best response to Costa’s third question is:”Because:

A.the project will plot above the security market line

B.the project’s beta is greater than the company’s beta

C.the project’s IRR is greater than the required rate of return

6.Should Costa’s end-of-meeting comments result in changes to Hernandez’s capital budgeting analysis?


B.Yes,but only to incorporate the possible delay.

C.Yes,to incorporate both the possible delay and the cost of producing the prototype.

快速校对:1~6 B C B A B B


Modern Auto,an automobile parts supplier,has made an offer to acquire Sky Systems,creator of software for the airline industry.The offer is to pay Sky Systems’shareholders the current market value of their stock in Modern Auto’s stock.The relevant information it used in those calculations is given below:



Although the total earnings of the combined company will not increase and are estimated to be$130 million,Charles Wilhelm(treasurer of Modern Auto)argues that there are two attractive reasons to merge.First,Wilhelm says,”The merger of Modern Auto and Sky Systems will result in lower risk for our shareholders because of the diversification effect.”Second,Wilhelm also says,”if our EPS increases,our stock price will increase in line with the EPS increase because our PIE will stay the same:’Sky Systems managers are not interested in the offer by Modern Auto.The managers,instead,approach HiFly,Inc.,which is in the same industry as Sky Systems,to see if it would be interested in acquiring Sky Systems.HiFly is interested,and both companies believe there will be synergies from this acquisition.If HiFly were to acquire Sky Systems,it would do so by paying$400 million in cash.HiFly is somewhat concerned whether antitrust regulators would consider the acquisition of Sky Systems an antitrust violation.The market in which the two companies operate consists of eight competitors.The largest company has a 25 percent market share.HiFly has the second largest market share of 20 percent.Five companies,including Sky Systems,each have a market share of 10 percent.The smallest company has a 5 percent market share.

1.The acquisition of Sky Systems by Modern Auto and the acquisition of Sky Systems by HiFly,respectively,would be examples of a:

A.vertical merger and a horizontal merger.

B.conglomerate merger and a vertical merger.

C.conglomerate merger and a horizontal merger.

2.If Sky Systems were to be acquired by Modern Auto under the terms of the original offer,the post-merger EPS of the new company would be closest to:




3.Are Wilhelm’s two statements about his shareholders benefiting from the diversification effect of the merger and about the increase in the stock price,respectively,correct?

Stock Price Will Increase in line with the EPS

The Merger Will Result in lower Risk for Shareholders

A.No No

B.No Yes

C.Yes No

4.Which of the following defenses best describes the role of HiFly in the acquisition scenario?

A.Crown jewel.

B.Pac-Man .

C.White knight.

5.Suppose HiFly acquires Sky Systems for the stated terms.The gain to Sky Systems shareholders resulting from the merger transaction would be closest to:

A.$25 million.

B.$160 million.

C.$375 million.

6.If HiFly and Sky Systems attempt to merge,the increase in the HerfindahlHirschman Index(HHI)and the probable action by the Department of Justice and the FTC,respectively,in response to the merger announcement are:

Increase in the HHI Probable Response of Department of Justice and FTC

A.290 To challenge the merger

B.290 To investigate the merger

C.400 To challenge the merger

快速校对:1~6 C C A C A C