Question 1

1. How many years will it take to triple your money at 17% compounded monthly?

Enter your answer rounded off to TWO decimal points. Do not enter “years” in the answer box.

1 points

Question 2

1. Suppose you invest $19,792. If the interest rate is 7% compounded quarterly for the first 10 years and 14% compounded monthly for the next 5 years, what is the future value after 15 years?

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points

Question 3

1. A project has the following cash flows. What is the internal rate of return?

Year 0 1 2 3

Cash flow -$121,000 68,150 $42,200 $39,100

13.47%

14.39%

13.85%

14.82%

12.71%

1 points

Question 4

1. The present value of a 10-year annuity is $181,566. If the interest rate is 11% and payments are made at the end of each period, what is the amount of each payment?

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points

Question 5

1. Debbie wants to have $19,640 in her bank account 5 years from now. The account will pay 1.2% interest per month. How much money does she need to put in her bank account at the end of each month to achieve this goal?

Enter your answer rounded off to two decimal points. Do not enter % or $ in the answer box.

1 points

Question 6

1. If you receive $825 at the end of each year for the first two years and $628 at the end of each year for the next two years.

Assume interest rate is 5%. What is the value at the end of the 4th year? That is. solve for FV at the end of the 4th year.

Note: Enter your answer rounded off to two decimal points. Do not enter $ in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 7

1. ABC, Inc. has a total asset turnover of 2.7 and a net profit margin of 5.5%. The firm has a return on equity of 23.6%. Calculate Marshall’s debt ratio.

Enter your answer as a percentage rounded off to two decimal points. Do not enter % in the answer box. For example, if you get 0.1234567, then enter as 12.35 in the answer box.

1 points

Question 8

1. ABC Company has net working capital of $2,964, current assets of $3,273, long-term debt of $1,111, and equity of $5,320. What is the amount of net fixed assets?

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box

1 points

Question 9

1. ABC Company has $439,077 of operating income after all costs but before $59,298 of interest income, $51,157 of dividend income, and taxes. What is the tax expense?

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points

Question 10

1. What is the net present value of the following cash flows? Assume an interest rate of 8%

Year CF

0 -$12,583

1 $7,045

2 $6,092

3 $6,785

2. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answers box.

3.

1 points

Question 11

1. ABC’s current assets comprise of cash, accounts receivables, and inventory. ABC has $13,956 in cash, $7,508 in accounts receivables, and $7,019 in inventory. If the current ratio is 2.7 times, compute the quick ratio.

Note: Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

1 points

Question 12

1. ABC Company has a debt ratio of 0.73. What is the debt-equity (D/E) ratio?

Note: Enter your answer rounded off to two decimal points. For example, if your answer is 0.123456789 then enter as 0.12 in the answer box.

1 points

Question 13

1. ABC Company offers a perpetuity which pays annual payments of $19,081. This contract sells for $255,564 today. What is the interest rate?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

Question 14

1. Suppose an investment offers to double your money in 31 years. What annual rate of return are you being offered if interest is compounded semi-annually?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

Question 15

1. Which one of the following capital budgeting technique ignores time value of money?

Profitability Index

Modified Internal Rate of Return (MIRR)

Payback

Net Present Value (NPV)

Internal Rate of Return (IRR)

1 points

Question 16

1. ABC Company earned $435,273 in taxable income for the year. How much tax does the company owe on this income?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 17

1. If you receive $1,939 at the end of each year for the first three years and $2,224 at the end of each year for the next two years. What is the future value of this cash flow stream? Assume interest rate is 4%.

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 18

1. Suppose you take a mortgage for $124,884 for 16 years with annual payments. If the annual interest rate is 4.5%, calculate the total interest amount paid over the life of the loan. That is, calculate the total interest paid in 16 years.

Hint: Use the amortization table.

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points

Question 19

1. ABC is reviewing a project that will cost $2,213.The project will produce cash flows $772 at the end of each year for the first two years and $595 at the end of each year for the next three years. What is the profitability index? Assume interest rate is 9%.

Note: Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

1 points

Question 20

1. ABC Company had beginning retained earnings of $2,188. During the year, the company reported sales of $21,574, costs of $7,869, depreciation of $1,304, dividends of $915, and interest paid of $2,181. The tax rate is 18 percent. What is the retained earnings balance at the end of the year?

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points

Question 21

1. ABC Company lists total assets of $4,947, current liabilities of $241 , long-term debt of $322 , and 346 shares of common stock. If the market price per share is $65, what is the market-to-book ratio?

Enter your answer rounded off to two decimal points.

1 points

Question 22

1. You are given the following information about ABC Company:

Interest expenses = $25,509

Times Interest Earned Ratio = 4 times

Tax Rate = 36.3%

What is the net income?

Enter your answer rounded off to two decimal points.

1 points

Question 23

1. What is the future value of $26,200 invested for 21 years at 5% compounded semi-annually?

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points

Question 24

1. What is the effective rate of 23.85% compounded quarterly?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

Question 25

1. You are given the following data for ABC Inc.:

Net income = $600

Net operating profit after taxes (NOPAT) = $1,291

Total assets = $2,500

Stockholders’ equity = $1,800

Total debt = $700

Total operating capital = $6,613

Barnes’ weighted average cost of capital is 15.8%.

What is the economic value added (EVA)?

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points

Question 26

1. ABC, Inc. has total assets of $155,311, current assets of $29,370, current ratio of 3.9, and equity multiplier of 7.3. Compute long term debt.

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

1 points

Question 27

1. Consider a taxable bond with a yield of 10.5% and a tax-exempt municipal bond with a yield of 4.7%. At what tax rate would you be indifferent between the two bonds?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

Question 28

1. ABC Company has total assets of $789,024. There are 52,104 shares outstanding with a market value of $27 per share. If the net profit margin is 9.4% and the total asset turnover is 2.5, what is the price/earnings (P/E) ratio?

Enter your answer rounded off to two decimal points.