Subject: Business    / Finance    

Corporate Finance-FIN622 Assignment # 04 Corporate Finance – FIN 622
Assignment # 04
Semester Spring 2016
Instructions: Total Marks: 15 1) Use a 12­point font in Times New Roman.
2) Show all necessary formulas and calculations.
3) Use MS Word for assignment solution.
4) Do not Re- write questions in the solution file.
5) Due date for the submission of Assignment is 9/6/2016
6) This Assignment covers Lecture # 29 to Lecture # 34 of your course.
7) Upload your assignment with in due date and time. No assignment will be accepted after the due date and time.
8) Be very careful while uploading your assignment, as no assignment will be
replaced after it was uploaded on VULMS.
9) No credit will be given to copied assignments. Question # 01
ABC Corporation is considering changing its credit terms from 2/10, net 30 to
3/10, net 60. All of the firm's sales are credit sales. Currently, 50% of its
customers take the discount. Under the new terms, this percentage is expected
to increase slightly to 55%. Since the longer credit period is expected to attract somewhat slower paying accounts, the average collection period will increase
from 14 to 22 days. Expected sales (before discounts) are Rs.2.40 million with the present terms and are expected to increase to Rs.2,700,000 if the new terms
are offered. If the Corporation has a 20% gross profit margin on sales and a 15%
opportunity cost, should the new policy be implemented? Virtual University of Pakistan (Marks: 08) Corporate Finance-FIN622 Assignment # 04 Question # 02
Several studies covering hundred of companies show that majority of the
mergers and acquisitions fail. The studies also reveal that the main reason for failure of mergers and acquisition is that most executives manage the business integration but do not manage the human integration of the merging firms. In your
view, what steps should be taken to successfully manage the human integration
in the process of mergers and acquisitions. (Marks: 07) Note: 1) Your answer for question # 02 must not exceed 450 words.
2) Do not copy from any source.
3) Answer the question only in your own words. 4) Students not following the instructions will be severely penalized.