MRP Finance Internship Unit 03

Unit 03 · Homework

Homework — Forecasting the Financing Gap

Forecasting the Financing Gap · Ghana · GH₵

One required question per video, turned in to the TAs. The optional extras are on the practice problems page.

Downloads

Homework for Week 3. Each set belongs to the video of the same number. One question in each set is required; answer it and turn it in to the TAs. The rest are optional practice, and worked answers to those are published alongside the set. A full set takes about twenty minutes. Work them before the case session.

Homework · 3.1

  1. Give one reason a forecast can be decision-useful even when its point estimate is almost certainly wrong.

Homework · 3.2

  1. Sales are forecast at GH₵24M. Historical inventory-to-sales ratios are 11%, 13%, and 12%. Forecast inventory using the average, and state when you would reject that method.

Homework · 3.3

  1. Forecast net income for a firm with sales of GH₵20M, gross margin 30%, SG&A 18% of sales, depreciation GH₵800K, interest GH₵500K, and a 25% tax rate.

Homework · 3.4

  1. A firm projects total assets of GH₵58M. Its projected payables are GH₵9M, short-term debt is held at GH₵4M, existing long-term debt is GH₵20M, and projected equity is GH₵21M. Compute the financing gap.

Homework · 3.5

  1. A firm has opening equity of GH₵30M, net income of GH₵6M, and pays dividends of GH₵2.4M. Compute its sustainable growth rate.

Homework · 3.6

  1. A model has six assumptions. Changing five of them by 10% each moves the output by less than 2%. Changing the sixth by 10% moves the output by 40%. What should the analyst do next, and what should appear in the write-up?