Reference no: EM133253671
Assignment - Basic Finance Questions
Q1. A company had cash and marketable securities worth $200,000 accounts payables worth $51,000, inventory of $1,501,500, accounts receivables of $5,288,128, short-term notes payable worth $220,000, other current liabilities of 100,000, and other current assets of $121,800. Calculate the company net working capital and describe how managers manage the firm working capital.
Q2. Your parents have given you $1,500 a year before your graduation so that you can take a trip when you graduate. You wisely decide to invest the money in a bank CD that pays 7% interest. You know that the trip costs $1600 right now and that inflation for the year is predicted to be 3%. Will you have enough money in a year to purchase the trip? Show your calculations.
Q3. If the following financial information related to XYZ Company. Total Revenues last year $970, depreciation expenses $50, costs of goods sold $450, and interest expenses $55. At the end of the year, current assets were $121 and current liabilities were $107. The company has an average tax rate of 35%. Calculate the net income for XYZ Company by setting up an income statement.
Q4. Calculate the common-size balance sheet from the following information for the company:
|
Cash
|
50,000
|
Accts/Pay
|
25,800
|
|
Acct/Rec
|
60,000
|
Accrued expenses
|
30,000
|
|
Inventories
|
200,500
|
Short-term N/P
|
9,700
|
|
Total Current assets
|
310,500
|
Current liabilities
|
65,500
|
|
Net fixed assets
|
132,000
|
Long-term debt
|
150,000
|
|
Total assets
|
442,500
|
Total liabilities
|
215,500
|
|
|
Owner's equity
|
227,000
|
|
|
Total liabilities and owners' equity
|
442,500
|
Q5. Ten years ago, Amanda Cortez invested $20,000 in an account paying an annual interest rate of 5%. What is the value of the investment today? What is the interest on interest earned onthis investment?
Q6. You have just won a lottery that promises an annual payment of $120000 beginning immediately. You will receive a total of 15 payments. If you can invest the cash flow in an investment that is paying 8% annually, what is the present value of this annuity?
Q7. XXX company has forecast a rate of return of 20% if the economy booms (30% probability); a rate of return of 19% if the economy in in a growth phase (40% probability); a rate of return of 2.50% if the economy in in decline (20% probability); and a rate of return of -10% if the economy in a depression (10% probability). What is the company standard deviation of returns?