Question
1. Andi has just won a prize draw of $5 million. He was given 2 options in receiving his prize, the first received 2.6 million
1. Andi has just won a prize draw of $5 million. He was given 2 options in receiving his prize, the first received 2.6 million now, or the second choice received 200 thousand at the end of the year for the next 25 years. If Andi has an investment opportunity with an interest of 7% every year with inflation of 5% a year, then which is the best choice for Andi? please calculate the value of PVIFA (present value of an annuity) for an investment value of 200 thousand per year with an interest of 7%, then compare it with the value of 2.6 million present value. (Leave aside the inflation variable).
2. PT ABC has the following balance sheet composition:
Assets:
cash 1,300,000
Securities 4,375,000
Trade Receivables 6,250,000
Inventory 8,875,000
Fixed Assets 40,250,000
Akum Depreciation 10,000,000
Net Fixed Assets 30,250,000
Liabilities and Equity
Trade Debt 2,425,000
Notes payable 2,750,000
Bank Debt 3,375,000
Long-term debt of 18,000,000
Capital Stock of 15,000,000
Retained Earnings 9,500,000
Calculate the following below: a. current ratio, b. cash ratio, c. quick ratio, d. debt to assets and e. debt to equity and explain how the company is:
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