List of Tables

Tables that use Microsoft Excel formulas include a link to open the corresponding Excel spreadsheet.

Templates

• Excel Template for HQN’s Coordinated Financial Statement
• Excel PV Template for Green & White Services

Alternative Forms of Business Organizations

• Table 2.1. Comparison of Business Organizations
• Table 2.2. Farm Business Organization Types (USDA Census of Agriculture, 2007)

The Federal Tax System

• Table 3.1. Federal Income Tax Rates in 2018
• Table 3.2. Farm Property Recovery Periods
• Table 3.3. Straight Line Recovery Rates for 3, 5, 7 Year Assets
• Table 3.4. MACRS Recovery Rates for 3, 5, and 7-Year Assets

Managing Risk

• Table 4.1. pdfs and Random Variables Associated with Investments A and B
• Table 4.2. Decision Matrix for Insurance Versus No Insurance with a Discrete Disaster Outcome.
• Table 4.3. Decision Matrix for Revenue with Insurance Versus no Insurance with Discrete Outcomes.
• Table 4.4. Decision Matrix for Revenue Insurance Versus No Insurance with Discrete Outcomes.
• Table 4.5. Expected Returns and Variances on Investments in Sunglasses and Umbrella
• Table 4.6. Observations of Returns on the Firm’s Portfolio of Investments r_t^p and on a Potential New Investment (a Challenger).
• Table 4.7. Returns per Acre under Alternative Moisture States with and without an Irrigation System.
• Table 4.8. ROEs whose Expected Values and Standard Deviations depend on Leverage Ratios.
• Table 4.Q1. Observations of Returns on the Firm’s Two Investments

Financial Statements

• Table 5.1. Year End Balance Sheet for HQN (all numbers in 000s)
• Table 5.2. HQN’s 2018 Checkbook
• Table 5.3. HQN’s 2018 SAUF Statement
• Table 5.4a. HQN’s 2018 Statement of Cash Flow
• Table 5.4b. HQN’s 2018 Statement of Cash Flow
• Table 5.5. HQN’s 2018 Cash Income Statement (all number in $000s)
• Table 5.6. HQN’s 2018 Accrual Income Statement (all numbers in $000s)
• Table 5.7. FFF supplied Ending Period Balance Sheets
• Table 5.8. FFF’s 2018 Ending Period Balance Sheets
• Table 5.9. FFF’s 2018 Accrual Income Statement (all numbers in $000s)
• Table 5.10. FFF’s 2018 Cash Income Statement
• Table 5.11. Statement of Cash Flow

Financial Ratios

• Table 6.1. Coordinated financial statement for HiQuality Nursery (HQN) for the year 2018
• Table 6.2. Net Working Capital for HQN
• Table 6.3. Comparing Sweet 16 Ratios with SPELL ratios
• Table 6.4. HQN ratios for 2018 & Industry Average Ratios in Quartiles
• Table 6.5. Summary of HQN’s 2018 Financial Strengths & Weaknesses

System Analysis

• Excel Template for HQN’s Coordinated Financial Statement
• Table 7.1. Exogenous variables and parameters used to compute HQN’s Coordinated Financial Statements (CFS)
• Table 7.2a. HQN’s Coordinated Financial Statements (CFS).
• Table 7.2b. HQN’s Base SPELL ratios.
• Table 7.3a. HQN’s Coordinated Financial Statements (CFS) after increasing sales by $1,000.
• Table 7.3b. HQN’s Base SPELL ratios after increasing sales by $1,000.
• Table 7.4. HQN’s Activity Table: SPELL ratios before and after a $1,000 increase in Cash Receipts
• Table 7.5. HQN’s Activity Table: What-if Analysis after Endogenizing COGS and the average tax rate
• Table 7.6. HQN’s Activity Table: What If Analysis of Scenario 4.
• Table 7.7. HQN’s Activity Table: Using Goal seek to find the increase in cash receipts required for ROE to equal 9.0%.
• Table 7.8. Common Size Balance Sheets for HQN
• Table 7.9. HQN’s Common Size Income Statement
• Table 7.10. The Squeeze vs. The Bulge
• Table 7.A1. HQN CFS Template
• Table 7.A2. Exogenous Variables
• Table 7.A3. HQN’s Activity Table: What-if Analysis Before Changes
• Table 7.A4. HQN’s Activity Table: What If Analysis: Increasing Cash Sales to $18,100.
• Table 7.A5. HQN’s Activity Table: Goal Seek Reducing Labor Costs to $7,990 Increases ROE to 9%
• Table 7.A6. HQN Common size balance sheets for December 31, 2017 and 2018.
• Table 7.A7. HQN’s Common size income statement for 2018 reflecting an increase in sales of $1,000.

Present Value Models and Accrual Income Statements

• Excel PV Template for Green & White Services
• Table 8.1. HQN’s 2018 Accrual Income Statement
• Table 8.2. HQN’s Beginning and Ending Balance Sheets
• Table 8.3. HQN’s EBIT and Change in Assets
• Table 8.4. HQN 2018 Cash Flow (Cash Receipts minus Cash Expenses)
• Table 8.5. HQN 2018 Changes in Operating and Capital Accounts
• Table 8.6. HQN’s Inconsistent rankings based on asset and equity earnings and rates of return.
• Table 8.A1. A generalized PV model template with rollings after-tax NPV, AE, and IRR estimates for earnings and rates of return on equity.
• Table 8.A2. Defender’s IRR^E, average tax rate T paid on its equity earnings, and average interest i rate paid on its liabilities.
• Table 8.A3. GWS equity generated after-tax cash flow during its four years of operations and corresponding after-tax internal rates of return.
• Table 8.A4. A generalized PV model template with rolling after-tax NPV, AE, and IRR estimates for earnings and rates of return on assets.
• Table 8.A5. Defender’s IRR^A, average tax rate T^* paid on its assets earnings and average interest i (although irrelevant for the calculations in Table 8.A4).
• Table 8.A6. GWS asset generated after-tax cash flow during its four years of operations and corresponding after-tax internal rates of return.

Present Value Models

• Table 9.1. An Excel Template Used to Find an NVP
• Table 9.2. An Excel Template Used to Find an IRR.
• Table 9.3. An Excel Template Used to Find an NPV and a Maximum Bid (Minimum Sell) Price
• Table 9.4. Using Excel’s Goal Seek to Find the Break-Even Salvage Value
• Table 9.5. An Excel Template that Uses Goal Seek to Find the Break-Even Salvage Value
• Table 9.6. Finding an Annuity Equivalent for an NPV over 4 years.

Incremental Investments

• Excel PV Template for Green & White Services
• Table 10.1. Comparing NPV versus IRR Rankings for an incremental Investment
• Table 10.2. Comparing NPV versus IRR Ranking for an incremental Investment after adjusting for size differences assuming the defender’s IRR is 8%
• Table 10.3. Comparing NPV versus IRR Ranking for an incremental Investment after adjusting for size differences assuming the defender’s IRR is 12%
• Table 10.4. Green and White Services (GWS) Asset Variables: Defender’s IRR^A, Average Tax Rate, After-Tax Discount Rate, and Average Interest Rate on Debt.
• Table 10.5. PV template used to find rolling estimates for NPV^As, IRR^As, and AE^As earned on GWS’s assets.
• Table 10.6. Cash flow used to find Lon’s Rolling NPV^A, IRR^A, and AE^A on his assets. IRR^A are calculated at the end of each year.
• Table 10.7. Green and White Services (GWS) Equity Variables: Defender’s IRR^E, Average Tax Rate, After-Tax Discount Rate, and Average Interest Rate on Debt.
• Table 10.8. Cash flow used to find Lon’s Rolling NPV^E, IRR^E, and AE^E on his equity. IRR^E are calculated at the end of each year.
• Table 10.9. PV template used to find rolling estimates for NPV^E, IRR^E, and AE^E earned on GWS’s equity.
• Table 10.10. Cash Flow Required to Break-Even with a $30,000 Incremental Investment
• Table 10.11. Finding ATCF for Continuing to Operate with the Old Doughnut Machine
• Table 10.12. Old Doughnut Machine Operating ATCF
• Table 10.13. Old Doughnut Machine
• Table 10.14a. New Doughnut Machine Depreciation
• Table 10.14b. New Doughnut Machine Tax Savings
• Table 10.15. New Doughnut Machine Operating ATCF
• Table 10.16. New Doughnut Machine NPV
• Table 10.17. New Doughnut Machine

Forecasting and Present Value Models

• Excel PV Template for Green & White Services
• Table 11.1. Deterministic naïve forecasts of Lon’s service calls
• Table 11.2. The results from a linear regression analysis for Lon’s sales.
• Table 11.3. Naïve forecasts of Lon’s service calls
• Table 11.4. Regression results for forecasting Lon’s services using a quadratic time function.
• Table 11.5. Forecasts of Lon’s service calls based on a quadratic function of time.
• Table 11.6. Forecast values for the demand for Lon’s Green & White Services for the next four years, and 95% confidence intervals around the forecasts.
• Table 11.7. Forecast values for the price of Lon’s Green & White Services Assuming a 2.1% increase
• Table 11.8. (Table 7.9) Accrued Common-Size Income Statements for HQN
• Table 11.9. PV Template: Green & White Services
• Table 11.10. Endogenous and exogenous variable forecasts for Green & White Services.
• Table 11.11. IRRs, average tax rate, average interest rate, and growth rates is applicable for Green & White Services.

Homogeneous Sizes

• Table 13.1. Inconsistent IRR and NPV rankings and unstable NPV rankings among three mutually exclusive investments of different initial and periodic cash flows.
• Table 13.2. Rankings Allowing NPV models (IRR models) to reinvest periodic cash flows at the defender’s IRR (challengers’ IRRs). Investment rankings indicated in parentheses below NPVs and IRRs values.
• Table 13.3. Allowing NPV and IRR models to reinvest periodic cash flows at same reinvestment rate equal to challenger 3’s IRR. Investment rankings indicated in parentheses below NPVs and IRRs values.
• Table 13.4. Consistent MIRR, scaled MIRR, and IRR rankings obtained by scaling initial investment sizes and periodic cash flows assuming the reinvestment rates are equal to the investments’ IRRⁱ where i= 1,2,3.
• Table 13.5. Consistent size adjusted MIRR and MNPV rankings obtained by scaling initial investment sizes and periodic cash flows assuming the reinvestment rate equal to the defender’s IRR of r = 5%.
• Table 13.6. Added MIRRs and added MNPVs assuming the reinvestment rate is the defender’s IRR of r = 5%.
• Table: 13.7. Alternative methods for adjusting challenging investments to resolve periodic and initial size differences assuming equal term and risk.
• Table 13.Q1. NPVs and IRRs for two mutually exclusive investments assuming a discount rate equal to the defender’s IRR of r = 5%.
• Table 13.Q2. MNPVs and MIRRs for two mutually exclusive investments assuming a discount and reinvestment rate of r = 5%.
• Table 13.Q3. MNPVs and MIRRs for two mutually exclusive investments assuming a discount and reinvestment rate of r= 5%. and reinvestment rates equal to the investments’ IRRs
• Table 13.Q4. Scaled MNPVs and MIRRs for two mutually exclusive investments assuming a discount and reinvestment rate of r = 5%.
• Table 13.Q5. Scaled MNPVs and MIRRs for two mutually exclusive investments assuming a discount rate of r = 5% and reinvestment rates equal to the investments’ IRRs
• Table 13.Q6. Added MNPVs and MIRRs for two mutually exclusive investments assuming a discount rate of r = 5% and reinvestment rates equal to the defender’s IRR of r= 5%.
• Table 13.Q7. Added MNPVs and MIRRs for two mutually exclusive investments assuming a discount rate of r = 5% and reinvestment rates equal to the investments’ IRRs
• Table 13.Q8. Summary of rankings described in Tables 13.Q1 through 13.Q7

Homogeneous Terms

• Table 14.1a. How to Find an AE for an Irregular Stream of Cash Flow
• Table 14.1b. How to Find an AE for an Irregular Stream of Cash Flow
• Table 14.2a. Alternative percentage capitalization rates (r– g)/(1 + g) depending on alternative values of g > 0 and r
• Table 14.2b. Alternative percentage capitalization rates (r– g)/(1 + g) depending on alternative values of g < 0 and r
• Table 14.3. The Influence of periodic Size and Term Differences Created by Differential Withdrawals.
• Table 14.4. Resolving Term Differences Between Two Challengers by Reinvesting $1,000 of Period One Earnings at its One-period IRR of 18% and Reinvesting other Funds at the Defender’s IRR of 10%.
• Table 14.5. Resolving Term Inconsistencies by Calculating AE for an Investment and the Investment and a Replacement Assuming Defender’s IRR is 10%
• Table 14.6. Ranking Adjusted for Term Differences and Technologically Improved Replacements. Rankings Assuming Defender’s IRR is 10%
• Table 14.7. An Example of a Growth and Decay Type Investment.
• Table 14.8. An Example of a Light Bulb Type Investment.
• Table 14.9. An Example of the Continual Decay Type Investment.
• Table 14.10. Investments With Irregular Cash Flow Characterized by Constant and then Declining Cash Flow with an Income Spike in the last Period of the Investment’s Economic Life. The Discount and Reinvestment Rates are Assumed to Equal 10%.
• Table 14.Q1.The influence of periodic size and term differences created by differential withdrawals assuming a reinvestment rate equal to the defender’s IRR of 10%. The discount rate for the NPV and MNPV models equal the defender’s IRR. The discount rate for the IRR and MIRR models are the IRRs and MIRRs
• Table 14.Q2.The influence of periodic size and term differences created by differential withdrawals assuming a reinvestment rate equal to the challenger’s IRRs. The discount rate for the NPV and MNPV models equal the defender’s IRR. The discount rate for the IRR and MIRR models are the IRRs and MIRRs.

Homogeneous Liquidity and Currency

• Table 16.1. Values of CTR ratios where CTR_t = (r – g)/r
• Table 16.2. Values of PE ratios where PE_t = 1/(r – g) = 1/(rCTR_t)
• Table 16.3. Calculating US0(r^f = 7%, n=20)
• Table 16.4 US Dollar Exchange Rates

Loan Analysis

• Table 17.1. Finding an effective interest rate compounded quarterly.
• Table 17.2. Finding an effective interest rate compounded monthly.
• Table 17.3. Finding an effective interest rate compounded continuously.
• Table 17.4. Finding the Loan Amount in a Constant Payment Loan
• Table 17.5. Finding the Constant Loan Payment
• Table 17.6. Finding the Number of Payments required to Retire a Loan
• Table 17.7. Point elasticity measures for loans of alternative terms and interest rates.
• Table 17.8. Finding the Loan Principal Paid on the t^th Payment
• Table 17.9. Finding the Loan Interest Paid on the t^th Payment
• Table 17.10 Finding the loan payment for a concessionary interest rate loan for $8,000 at a concessionary rate of 1%, repaid with five years of monthly payments.
• Table 17.11. Finding the present value of an $8,000 loan at a concessionary interest rate 8%, for monthly payment of $136.75 for five year.
• Table 17.12. Finding the loan payment on a skip payment loan.
• Table 17.13. Finding the loan payment on the loan without skipping payments.
• Table 17.14. Finding annuity due required to save $20,000 in 36 monthly payments.
• Table 17.15. Finding the ordinary annuity for the previous problem.

Land Investments

• Table 18.1. Percentage changes in asset values corresponding to small changes in real interest rates for alternative values of r* and for assets with various degrees of durability characterized by the variable g*.
• Table 18.2. Percentage changes in asset values corresponding to 1% changes in real growth rate for alternative values of r*and for assets with various degrees of durability characterized by the variable g*.

Leases

• Table 19.1. Finding the NPC of the Purchase.
• Table 19.2. Finding the PV of the Annuity Due

Financial Investments

• Table 20.1. The Future Value of 10 Annuity Due Payments of $90 Compounded at 2%
• Table 20.2. Finding the Number of $90 Annuity Due Payments Compounded at 2% Required to Earn a Future Value of $2,000
• Table 20.3. Finding the Annuity Due Payment Compounded at 2% Required to Earn a Future Value of $2,000 in 10 Years
• Table 20.4. Tabled Values of elasticity E_FV,n = n / US₀(r,n)
• Table 20.5. Periods required to double, triple, or quadruple the FV of an investment consisting of 5 equal payments assuming alternative reinvestment rates.
• Table 20.6. Finding the After-tax IRR

Yield Curves

• Table 21.1. The connection between inverted yield curves and future recessions (1970-2009).

Econs and Humans

• Table 22.1. Properties of commodities and relational goods.
• Table 22.2. Average minimum sell price for a used car with a market value of $3,000 reported by 600 survey respondents.