1. Suppose you deposit $2,500 at the end of year 1, nothing at the end of year 2, $750 at the end of year 3, and $1,300 at the end of year 4. Assuming that these amounts will be compounded at an annual rate of 15%, how much will you have on deposit at the end of 5 years?
2. What can you learn about a firm by using the Du Pont identity that you cannot determine by just knowing the return on equity?
3. Explain pros and cons of using a bank term loan, a bank term loan, and a bank revolving line of credit if a company needs external capital but has low current ratio.