RULES & REGULATIONS    · The first 15 minutes of the exam session will be used to review the exam before commencing; a Q&A session is allowed during these 15 minutes. Students can ask their question and the professor’s response will be shared with the entire class. No disrupting the class after the first 15 minutes after the exam has been distributed.· No student will be allowed in the exam session after 15 minutes.· Students may only have a pen and calculator (if specified) on the desk. No extra paper, books, mobile phones, or electronic device is allowed. Any extra paper needed will be brought to you by the administration department upon request. All mobile phones should be switched off and students’ belongings on the floor at the front of the class; any person found with an unauthorized device, concealed or otherwise, will receive a zero on the exam.· If a calculator has been authorized by the professor, then this must be a calculator. No cell phones, smart-phones or any electronic device of any sort will be permitted. In the case that a student has forgotten their calculator, they will be requested to do the calculations by hand or obtain one before the start time of the exam.· Students may not leave the exam for any reason, should they insist of doing so they will not be allowed to return to the exam. Toilet issues should be addressed before the start of the exam; exams over 2 hours in duration, please leave your exam with the professor and ask to be escorted by an administration member to the bathroom.· You may not leave the exam session during the last 15 minutes.· Speaking is not allowed under any circumstances. Should a student be seen or heard communicating with another student, they will be disqualified for the session and awarded a zero for the exam.· If a student is caught or suspected of cheating, he or she will be sent to the administration department immediately and a disciplinary file will be opened. Cheating of any kind will result in a 0 and no retake will be allowed.· If formulas are allowed in the exam, only professors may give the necessary information to the student either by writing on the board or handing them directly to the students. Students may not use their own notes unless specified ahead of time.   LEARNING OUTCOMES ASSESSED Outcome 1: Assessing the concept of DFNsOutcome 2: Assessing the trade-off between the dividend policy and the liquidity constraintsOutcome 3: Assessing the trade-off between DFNs and the dividend policyOutcome 4: Assessing different industries through their respective CCCsOutcome 5: Assessing types of debt depending on the collateralizationOutcome 6: Understanding how to compute the DFNsOutcome 7: Understanding how to compute the WC   INSTRUCTIONS · Exam Structure: Two parts. Part 1: 5 Questions, both Knowledge and Critical Thinking, mainly theory. Material allowed: only biro or pencil. No calculators, neither laptops nor any other electronic devices, headphones included. Personal notes and materials are not allowed either.· Time: A 1.5-hour part. Once time is over, the exam will be immediately delivered to the professor. Then, the second part of the exam will start.· Part 2: 2 Mini-cases. Knowledge, practice. Material allowed: laptops. Excel will be the only application allowed. Students will have to download a template from the Moodle, solve it, and submitt it through the Turnitin submission point. A formula sheet will also be available in the Moodle for computing the requested operations. Time: a 1-hour part· Total time for the exam: Part 1, 1.5 h + Part 2, 1 h = 2.5 hours GRADING · Part 1. (70%)· Questions 1-5: Open questions 14% each question · Part 2 (30%)· Questions 6-7: Mini-cases 15% each  EXAM QUESTIONS: Part 1.  Question 1What are the discretionary financing needs? Explain the concept concisely and cite a brief example. You do not need, of course, to draw both the complete P&L and the BS for illustrating your explanation.Question 2Please describe the cash constraint when it comes to paying dividends over the accounting net income figure. Cite a brief example.Question 3After negotiating with an important customer, the CFO of Company H has just decided to stretch the credit period, from 30 to 45 days, instead of increasing the credit quantity because, according with his opinion, it will not have any impact on the financing needs of the firm. Do you agree? Justify your answer.Question 4Given the two cash conversion cycles, CCC1 = +90 days, and CCC2= -30 days, in which CCC would you frame an industrial company (B2B business) and an online e-commerce platform, such as Amazon, respectively?Question 5What is the difference between secured and unsecured debt? Cite an examplePart 2.Question 6. Please, compute the DFN according with the financial statements below. Question 7. Please, compute the working capitals. You can use the two methods for verifying purposes.

  2020 15% Growth 2021
Sales 635.0    
COGS 381.0    
Gross margin 254.0    
Other Exploit. Exp. 127.0    
Amort. & Deprec. 50.8    
EBIT 76.2    
Interests 9.0    
EBT 67.2    
Taxes, 30% 20.2    
Net Income 47.0    
  2020   2021
Cash + Near Cash Assets 19.5    
Acc. Receivable 98.4    
Inventories 133.2    
CA 251.1    
Fixed Assets 253.2    
Acc. Depreciation -88.6    
Total Assets 415.7    
Acc. Payable 152.9    
Short-Term Debt 16.0    
Long-Term Debt 79.8    
Current Profit 47.0    
Retained Earnings 50.0    
Capital 70.0    
Total Liabilities 415.7    
Cash 1.2 4.6 Accounts Payable
Near-cash assets 3.5 2.1 Other Accounts Payable
Accounts Receivable 9.1 3.5 Taxes Due  
Inventories 3.8 3.1 Short-Term Debt
Machinery 10.8 15.2 Long-Term Debt
Facilities 6.2 4.7 Equity  
Accrued Deprec. -1.4      
Total Net Assets 33.2 33.2 Total Liabilities
    WC =    
    WC =  

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