1) What is corporate finance? What is the objective of corporate finance?

2) You have decided to form a new start-up company developing applications for the iPhone. Give examples of the three distinct types of financial decisions you will need to make.

3) Explain the differences between equity finance and debt finance.

4) Explain the following:

(i)   Annuity                  (ii)  Annuity due           (iii) Perpetuity               (iv) Growing perpetuity

5) You are 23 years old and decide to start saving for your retirement. You plan to save $5,000 at the end of each year (so the first deposit will be one year from now), and will make the last deposit when you retire at age 68. Suppose you earn 9% per year on your retirement savings.

(i)   How much will you have saved for retirement?

(ii)  How much will you have saved if you wait until age 32 to start saving (again, with your

first deposit at the end of the year)?

6) You are provided with the following information for Zigma Ltd. for its recent financial year:

Sales Revenue

Operating expenses                       Administrative and sales expenses Depreciation

$54,000 million

$20,000 million

$10,000 million

$1,000 million