Q1- Future value: Ning Gao is planning to buy a house in five years. She is looking to invest $25,000 today in an index mutual fund that will provide her a return of 12 percent annually. How much will she have at the end of five years? (Round to the nearest dollar.)
Q2---Multiple compounding periods (FV): Normandy Textiles had a cash inflow of $1 million, which it needs for a long-term investment at the end of one year. It plans to deposit this money in a bank CD that pays daily interest at 3.75 percent. What will be the value of the investment at the end of the year? (Round to the nearest dollar.)
Q3-- Ahmet purchased a stock for $45 one year ago. The stock is now worth $65. During the year, the stock paid a dividend of $2.50. What is the total return to Ahmet from owning the stock? (Round your answer to the nearest whole percent.)
Q4-- Present value: Jack Robbins is saving for a new car. He needs to have $ 21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar.)
Q5-- You have borrowed $10,000 to pay off your Spring Break trips. You plan to make monthly payments over a 10-year period. If the loan's interest rate is 10% compounded monthly, how much interest will you pay over the life of the loan?
Q6-- Your uncle promises to give you $550 per quarter for the next five years starting today. How much is his promise worth right now if the interest rate is 8% compounded quarterly?
Q7-- Emperor Corporation's financial statements for the last year are shown below. All figures are in thousands ($000). The firm paid a $1,000 dividend to its stockholders during the year. Two million shares of stock are outstanding. The stock is currently trading at a price of $50. There were no sales of new stock. Lease payments totaling $400 are included in cost and expense.
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BALANCE SHEET
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ASSETS
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INCOME STATEMENT
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Cash
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$ 2,000
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Sales
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$100,000
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Accounts receivable
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12,000
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COGS
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80,000
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Inventory
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14,000
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Gross Margin
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$ 20,000
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Current Assets
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$28,000
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Cash Expenses
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$ 8,000
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Gross Fixed assets
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$27,000
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Depreciation
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1,600
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Accumulated depreciation
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(16,000)
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EBIT
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$ 10,400
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Net fixed assets
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11,000
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Interest
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800
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Total assets
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$39,000
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EBT
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$ 9,600
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LIABILITIES
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Tax
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2,600
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Accounts payable
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$ 3,000
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Net Income
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$ 7,000
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Accruals
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1,000
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Current Liabilities
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$ 4,000
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Long term Debt
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10,000
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Equity
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25,000
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Total liabilities & equity
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$39,000
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Find--- Current Ratio, Quick Ratio, Average Collection Period (ACP), Inventory Turnover, Capital Asset Turnover, Total Asset Turnover, Debt Ratio, Debt to Equity ratio, Cash Coverage, Fixed Charge Coverage, Return of Sales, Return of Assets, Return of Equity, Times interest Earned, Price Earnings Ratio (P/E), Market to Book Value Ratio.
Q8-- Use the following information for the next four questions. Norlin Corporation is considering an expansion project that will begin next year (Time 0). Norlin's cost of capital is 12%. The initial cost of the project will be $250,000, and it is expected to generate the following cash flows over its five-year life:
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Year
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$
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1
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$40,000
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2
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$60,000
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3
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$90,000
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4
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$90,000
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5
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$90,000
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Find--- What is the payback period for the expansion project?
What is the net present value (NPV) of for the expansion project?
What is the internal rate of return (IRR) for the expansion project?