Solution Manual for Introduction to Finance, 17th Edition, Ronald W. Melicher

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  • ISBN-10 ‏ : ‎ 1119561175
  • ISBN-13 ‏ : ‎ 978-1119561170
  • Author: Ronald W. Melicher

Introduction to Finance, 17th Edition offers students a balanced introduction to the three major areas of finance: institutions and markets, investments, and financial management. Updated to incorporate recent economic and financial events, this new edition is an ideal textbook for first courses in finance―reviewing the discipline’s essential concepts, principles, and practices in a clear, reader-friendly manner. Students gain an integrated perspective of finance by learning how markets and institutions influence, and are influenced by, individuals, businesses, and governments.

Designed to impart financial literacy to readers with no previous background in the subject, the text provides a solid foundation for students to build upon in later courses in financial management, investments, or financial markets. Equations and mathematical concepts are kept to a minimum, and include understandable, step-by-step solutions. Divided into three parts, the book explains financial markets, discusses the functions of financial systems, reviews savings and investments in different sectors, describes accounting concepts and organizational structures, and more. Real-world examples featured throughout the text help students understand important concepts and appreciate the role of finance in various local, national, and global settings.

 

Table of Content:

  1. PART 1: INSTITUTIONS AND MARKETS
  2. CHAPTER 1: THE FINANCIAL ENVIRONMENT
  3. 1.1 WHAT IS FINANCE?
  4. 1.2 WHY STUDY FINANCE?
  5. 1.3 SIX PRINCIPLES OF FINANCE
  6. 1.4 OVERVIEW OF THE FINANCIAL SYSTEM
  7. 1.5 FINANCIAL MARKETS: CHARACTERISTICS AND TYPES
  8. 1.6 CAREERS IN FINANCE
  9. 1.7 THE PLAN OF STUDY
  10. APPLYING FINANCE TO…
  11. SUMMARY
  12. KEY TERMS
  13. REVIEW QUESTIONS
  14. EXERCISES
  15. NOTES
  16. CHAPTER 2: MONEY AND THE MONETARY SYSTEM
  17. 2.1 THE 2007–2008 FINANCIAL CRISIS AND SUBSEQUENT RECOVERY
  18. 2.2 PROCESS OF MOVING SAVINGS INTO INVESTMENTS
  19. 2.3 OVERVIEW OF THE MONETARY SYSTEM
  20. 2.4 CHARACTERISTICS AND FUNCTIONS OF MONEY
  21. 2.5 DEVELOPMENT OF MONEY IN THE UNITED STATES
  22. 2.6 MONEY MARKET SECURITIES
  23. 2.7 MEASURES OF THE U.S. MONEY SUPPLY
  24. 2.8 MONEY SUPPLY AND ECONOMIC ACTIVITY
  25. 2.9 INTERNATIONAL MONETARY SYSTEM
  26. APPLYING FINANCE TO…
  27. SUMMARY
  28. KEY TERMS
  29. REVIEW QUESTIONS
  30. EXERCISES
  31. PROBLEMS
  32. NOTES
  33. CHAPTER 3: BANKS AND OTHER FINANCIAL INSTITUTIONS
  34. 3.1 FINANCIAL INSTITUTION PROBLEMS DURING THE 2007–2008 FINANCIAL CRISIS
  35. 3.2 TYPES AND ROLES OF FINANCIAL INSTITUTIONS
  36. 3.3 OVERVIEW OF THE BANKING SYSTEM
  37. 3.4 HISTORICAL DEVELOPMENT OF THE U.S. BANKING SYSTEM
  38. 3.5 REGULATION OF THE BANKING SYSTEM
  39. 3.6 STRUCTURE OF BANKS
  40. 3.7 THE BANK BALANCE SHEET
  41. 3.8 BANK MANAGEMENT
  42. 3.9 INTERNATIONAL BANKING AND FOREIGN SYSTEMS
  43. APPLYING FINANCE TO…
  44. SUMMARY
  45. KEY TERMS
  46. REVIEW QUESTIONS
  47. EXERCISES
  48. PROBLEMS
  49. NOTES
  50. CHAPTER 4: FEDERAL RESERVE SYSTEM
  51. 4.1 U.S. CENTRAL BANK RESPONSE TO THE FINANCIAL CRISIS AND GREAT RECESSION
  52. 4.2 THE U.S. BANKING SYSTEM PRIOR TO THE FED
  53. 4.3 STRUCTURE OF THE FEDERAL RESERVE SYSTEM
  54. 4.4 MONETARY POLICY FUNCTIONS AND INSTRUMENTS
  55. 4.5 FED SUPERVISORY AND REGULATORY FUNCTIONS
  56. 4.6 FED SERVICE FUNCTIONS
  57. 4.7 CENTRAL BANKS IN OTHER COUNTRIES
  58. APPLYING FINANCE TO…
  59. SUMMARY
  60. KEY TERMS
  61. REVIEW QUESTIONS
  62. EXERCISES
  63. PROBLEMS
  64. NOTES
  65. CHAPTER 5: POLICY MAKERS AND THE MONEY SUPPLY
  66. 5.1 NATIONAL ECONOMIC POLICY OBJECTIVES
  67. 5.2 FOUR POLICY MAKER GROUPS
  68. 5.3 GOVERNMENT INFLUENCE ON THE ECONOMY
  69. 5.4 TREASURY CASH AND GENERAL MANAGEMENT RESPONSIBILITIES
  70. 5.5 TREASURY DEFICIT FINANCING AND DEBT MANAGEMENT RESPONSIBILITIES
  71. 5.6 CHANGING THE MONEY SUPPLY
  72. 5.7 FACTORS AFFECTING BANK RESERVES
  73. 5.8 THE MONETARY BASE AND THE MONEY MULTIPLIER
  74. APPLYING FINANCE TO…
  75. SUMMARY
  76. KEY TERMS
  77. REVIEW QUESTIONS
  78. EXERCISES
  79. PROBLEMS
  80. NOTES
  81. CHAPTER 6: INTERNATIONAL FINANCE AND TRADE
  82. 6.1 INTERNATIONAL MONETARY SYSTEM
  83. 6.2 EUROPEAN UNIFICATION
  84. 6.3 CURRENCY EXCHANGE MARKETS AND RATES
  85. 6.4 FACTORS THAT AFFECT CURRENCY EXCHANGE RATES
  86. 6.5 CONDUCTING BUSINESS INTERNATIONALLY
  87. 6.6 FINANCING INTERNATIONAL TRADE
  88. 6.7 DEVELOPMENTS IN U.S. INTERNATIONAL TRANSACTIONS
  89. APPLYING FINANCE TO…
  90. SUMMARY
  91. KEY TERMS
  92. REVIEW QUESTIONS
  93. EXERCISES
  94. PROBLEMS
  95. 6.8 EXCHANGE RATE RISKS IN GLOBAL BUSINESS
  96. SUMMARY
  97. REVIEW QUESTIONS
  98. NOTES
  99. PART 2: INVESTMENTS
  100. CHAPTER 7: SAVINGS AND INVESTMENT PROCESS
  101. 7.1 GROSS DOMESTIC PRODUCT AND CAPITAL FORMATION
  102. 7.2 FEDERAL GOVERNMENT RECEIPTS AND EXPENDITURES
  103. 7.3 ROLE AND MAJOR SOURCES OF SAVINGS
  104. 7.4 FACTORS AFFECTING SAVINGS
  105. 7.5 CAPITAL MARKET SECURITIES
  106. 7.6 MORTGAGE MARKETS
  107. 7.7 ROLE OF THE INDIVIDUAL IN THE 2007–2008 FINANCIAL CRISIS AND TODAY
  108. APPLYING FINANCE TO…
  109. SUMMARY
  110. KEY TERMS
  111. REVIEW QUESTIONS
  112. EXERCISES
  113. PROBLEMS
  114. NOTES
  115. CHAPTER 8: INTEREST RATES
  116. 8.1 SUPPLY AND DEMAND FOR LOANABLE FUNDS
  117. 8.2 COMPONENTS OF MARKET INTEREST RATES
  118. 8.3 DEFAULT RISK-FREE SECURITIES: U.S. TREASURY DEBT INSTRUMENTS
  119. 8.4 TERM OR MATURITY STRUCTURE OF INTEREST RATES
  120. 8.5 INFLATION PREMIUMS AND PRICE MOVEMENTS
  121. 8.6 DEFAULT RISK PREMIUMS
  122. APPLYING FINANCE TO…
  123. SUMMARY
  124. KEY TERMS
  125. REVIEW QUESTIONS
  126. EXERCISES
  127. PROBLEMS
  128. NOTE
  129. CHAPTER 9: TIME VALUE OF MONEY
  130. 9.1 BASIC TIME VALUE CONCEPTS
  131. 9.2 COMPOUNDING TO DETERMINE FUTURE VALUES
  132. 9.3 DISCOUNTING TO DETERMINE PRESENT VALUES
  133. 9.4 FINDING INTEREST RATES AND TIME REQUIREMENTS
  134. 9.5 FUTURE VALUE OF AN ANNUITY
  135. 9.6 PRESENT VALUE OF AN ANNUITY
  136. 9.7 INTEREST RATES AND TIME REQUIREMENTS FOR ANNUITIES
  137. 9.8 DETERMINING PERIODIC ANNUITY PAYMENTS
  138. 9.9 MORE FREQUENT TIME INTERVALS AND THE COST OF CONSUMER CREDIT
  139. APPLYING FINANCE TO…
  140. SUMMARY
  141. KEY TERMS
  142. REVIEW QUESTIONS
  143. EXERCISES
  144. PROBLEMS
  145. 9.10 ANNUITY DUE PROBLEMS
  146. SUMMARY
  147. QUESTIONS AND PROBLEMS
  148. NOTES
  149. CHAPTER 10: BONDS AND STOCKS: CHARACTERISTICS AND VALUATIONS
  150. 10.1 LONG-TERM EXTERNAL FINANCING SOURCES FOR BUSINESSES
  151. 10.2 BONDS
  152. 10.3 DIFFERENT TYPES OF BONDS
  153. 10.4 CORPORATE EQUITY CAPITAL
  154. 10.5 DIVIDENDS AND STOCK REPURCHASES
  155. 10.6 VALUATION PRINCIPLES
  156. 10.7 VALUATION OF BONDS
  157. 10.8 VALUATION OF STOCKS
  158. APPLYING FINANCE TO…
  159. SUMMARY
  160. KEY TERMS
  161. REVIEW QUESTIONS
  162. PROBLEMS
  163. 10.9 HOLDING PERIOD RETURNS
  164. SUMMARY
  165. PROBLEMS
  166. NOTES
  167. CHAPTER 11: SECURITIES AND MARKETS
  168. 11.1 ISSUING SECURITIES: PRIMARY SECURITIES MARKETS
  169. 11.2 THE FACEBOOK IPO6
  170. 11.3 OTHER WAYS TO ASSIST ISSUING FIRMS
  171. 11.4 COST OF GOING PUBLIC
  172. 11.5 INVESTMENT BANKING FIRMS: OTHER FUNCTIONS, INNOVATIONS, REGULATIONS
  173. 11.6 TRADING SECURITIES – SECONDARY SECURITIES MARKETS
  174. 11.7 SECURITY TRANSACTIONS
  175. 11.8 OVER-THE-COUNTER MARKET
  176. 11.9 WHAT MAKES A GOOD MARKET?
  177. 11.10 SECURITY MARKET INDEXES AND TRADING FOREIGN SECURITIES
  178. 11.11 INSIDE INFORMATION AND OTHER ETHICAL ISSUES
  179. APPLYING FINANCE TO…
  180. SUMMARY
  181. KEY TERMS
  182. REVIEW QUESTIONS
  183. PROBLEMS
  184. 11.12 WHY DO DERIVATIVES EXIST?
  185. SUMMARY
  186. KEY TERMS
  187. DISCUSSION QUESTIONS
  188. PROBLEMS
  189. NOTES
  190. CHAPTER 12: FINANCIAL RETURN AND RISK CONCEPTS
  191. 12.1 HISTORICAL RETURN FOR A SINGLE FINANCIAL ASSET
  192. 12.2 HISTORICAL RISK MEASURES FOR A SINGLE FINANCIAL ASSET
  193. 12.3 WHERE DOES RISK COME FROM?
  194. 12.4 EXPECTED MEASURES OF RETURN AND RISK
  195. 12.5 HISTORICAL RETURNS AND RISK OF DIFFERENT ASSETS
  196. 12.6 EFFICIENT CAPITAL MARKETS
  197. 12.7 PORTFOLIO RETURNS
  198. 12.8 VARIANCE AND STANDARD DEVIATION OF RETURN ON A PORTFOLIO
  199. 12.9 PORTFOLIO RISK AND THE NUMBER OF INVESTMENTS IN THE PORTFOLIO
  200. 12.10 CAPITAL ASSET PRICING MODEL
  201. APPLYING FINANCE TO…
  202. SUMMARY
  203. KEY TERMS
  204. REVIEW QUESTIONS
  205. PROBLEMS
  206. 12.11A ESTIMATING BETA
  207. 12.11B SECURITY MARKET LINE
  208. SUMMARY
  209. PROBLEMS
  210. NOTES
  211. PART 3: FINANCIAL MANAGEMENT
  212. CHAPTER 13: BUSINESS ORGANIZATION AND FINANCIAL DATA
  213. 13.1 STARTING A BUSINESS
  214. 13.2 FORMS OF BUSINESS ORGANIZATION IN THE UNITED STATES
  215. 13.3 ACCOUNTING PRINCIPLES
  216. 13.4 INCOME STATEMENT
  217. 13.5 THE BALANCE SHEET
  218. 13.6 STATEMENT OF CASH FLOWS
  219. 13.7 FINANCIAL STATEMENTS OF DIFFERENT COMPANIES
  220. 13.8 GOAL OF A FIRM
  221. 13.9 CORPORATE GOVERNANCE
  222. 13.10 FINANCE IN THE ORGANIZATION CHART
  223. APPLYING FINANCE TO…
  224. SUMMARY
  225. KEY TERMS
  226. REVIEW QUESTIONS
  227. PROBLEMS
  228. 13.11A INCOME TAX
  229. 13.11B DEPRECIATION BASICS
  230. SUMMARY
  231. REVIEW QUESTIONS AND PROBLEMS
  232. NOTES
  233. CHAPTER 14: FINANCIAL ANALYSIS AND LONG-TERM FINANCIAL PLANNING
  234. 14.1 FINANCIAL STATEMENT ANALYSIS
  235. 14.2 LIQUIDITY RATIOS AND ANALYSIS
  236. 14.3 ASSET MANAGEMENT RATIOS AND ANALYSIS
  237. 14.4 FINANCIAL LEVERAGE RATIOS AND ANALYSIS
  238. 14.5 PROFITABILITY RATIOS AND ANALYSIS
  239. 14.6 MARKET VALUE RATIOS AND ANALYSIS
  240. 14.7 DUPONT METHOD OF RATIO ANALYSIS
  241. 14.8 LONG-TERM FINANCIAL PLANNING
  242. 14.9 COST–VOLUME–PROFIT ANALYSIS
  243. 14.10 DEGREE OF OPERATING LEVERAGE
  244. APPLYING FINANCE TO…
  245. SUMMARY
  246. KEY TERMS
  247. REVIEW QUESTIONS
  248. PROBLEMS
  249. NOTES
  250. CHAPTER 15: MANAGING WORKING CAPITAL
  251. 15.1 IMPORTANCE OF WORKING CAPITAL
  252. 15.2 OPERATING AND CASH CONVERSION CYCLES
  253. 15.3 INVESTMENTS IN RECEIVABLES, INVENTORY, AND PAYABLE FINANCING
  254. 15.4 CASH BUDGETS
  255. 15.5 MANAGEMENT OF CURRENT ASSETS
  256. 15.6 GETTING – AND KEEPING – THE CASH
  257. 15.7 ACCOUNTS RECEIVABLE MANAGEMENT
  258. 15.8 INVENTORY MANAGEMENT
  259. 15.9 TECHNOLOGY AND WORKING CAPITAL MANAGEMENT
  260. APPLYING FINANCE TO…
  261. SUMMARY
  262. KEY TERMS
  263. REVIEW QUESTIONS
  264. PROBLEMS
  265. NOTES
  266. CHAPTER 16: SHORT-TERM BUSINESS FINANCING
  267. 16.1 STRATEGIES FOR FINANCING WORKING CAPITAL
  268. 16.2 FACTORS AFFECTING SHORT-TERM FINANCING
  269. 16.3 PROVIDERS OF SHORT-TERM FINANCING
  270. 16.4 NONBANK SHORT-TERM FINANCING SOURCES
  271. 16.5 ADDITIONAL VARIETIES OF SHORT-TERM FINANCING
  272. 16.6 INVENTORY FINANCING AND OTHER SECURED LOANS
  273. 16.7 THE COST OF SHORT-TERM FINANCING
  274. APPLYING FINANCE TO…
  275. SUMMARY
  276. KEY TERMS
  277. REVIEW QUESTIONS
  278. PROBLEMS
  279. NOTES
  280. CHAPTER 17: CAPITAL BUDGETING ANALYSIS
  281. 17.1 MISSION, VISION, AND CAPITAL BUDGETING
  282. 17.2 CAPITAL BUDGETING PROCESS
  283. 17.3 CAPITAL BUDGETING TECHNIQUES – NET PRESENT VALUE
  284. 17.4 CAPITAL BUDGETING TECHNIQUES – INTERNAL RATE OF RETURN
  285. 17.5 CAPITAL BUDGETING TECHNIQUES – MODIFIED INTERNAL RATE OF RETURN
  286. 17.6 CAPITAL BUDGETING TECHNIQUES – PROFITABILITY INDEX
  287. 17.7 CAPITAL BUDGETING TECHNIQUES – PAYBACK PERIOD
  288. 17.8 CONFLICTS BETWEEN DISCOUNTED CASH FLOW TECHNIQUES
  289. 17.9 ESTIMATING PROJECT CASH FLOWS
  290. 17.10 KEEPING MANAGERS HONEST
  291. 17.11 RISK-RELATED CONSIDERATIONS
  292. APPLYING FINANCE TO…
  293. SUMMARY
  294. KEY TERMS
  295. REVIEW QUESTIONS
  296. PROBLEMS
  297. 17.12 PROJECT STAGES AND CASH FLOW ESTIMATION
  298. 17.13 APPLICATIONS
  299. SUMMARY
  300. PROBLEMS
  301. NOTES
  302. CHAPTER 18: CAPITAL STRUCTURE AND THE COST OF CAPITAL
  303. 18.1 WHY CHOOSE A CAPITAL STRUCTURE?
  304. 18.2 REQUIRED RATE OF RETURN AND THE COST OF CAPITAL
  305. 18.3 COST OF CAPITAL
  306. 18.4 WEIGHTED AVERAGE COST OF CAPITAL
  307. 18.5 PLANNING GROWTH RATES
  308. 18.6 EBIT/eps ANALYSIS
  309. 18.7 COMBINED OPERATING AND FINANCIAL LEVERAGE EFFECTS
  310. 18.8 INSIGHTS FROM THEORY AND PRACTICE
  311. APPLYING FINANCE TO…
  312. SUMMARY
  313. KEY TERMS
  314. REVIEW QUESTIONS
  315. PROBLEMS
  316. NOTES
  317. APPENDIX
  318. GLOSSARY
  319. INDEX
  320. END USER LICENSE AGREEMENT