1) The following data comes from the balance sheet and income statement of company A. Balance Sheet Cash $500 Accounts Receivable 2,000 Inventories 1,000 3,500 Current assets Net fixed assets 4,500 Total assets 8,000 Accounts Payable 1,100 Accrued expenses 600 Short-term N/P 300 Current liabilities 2,000 Long-term debt Owner's equity 2,000 4,000 Total liabilities and owners' equity $8,000 Income Statement: Net sales $8,000 COGS 3,300 Gross profit 4,700 Operating expenses 3,000 Net operating income 1,700 367 Interest expense EBT 1,333 Income taxes 533 $800 Net income Calculate the following ratios (5 points) Current ratio = Debt ratio = Times interest earned = Average collection period = Inventory turnover = Fixed asset turnover = Total asset turnover = Operating profit margin Operating return on assets = Return on equity = 2) In order to send your first child, who was born today, to Law School when the time comes, you want to accumulate $40,000 at the end of 18 years Assuming that your savings account pays 6% compounded annually, for the whole 18 years, how a. much would you have to deposit today? (2 points) b. Assuming that your savings account pays 6% compounded annually, for the first 10 years, and 7.5% for the remaining 8 years, how much would you have to deposit today? (2 points) 3) Frank Zanca is considering three different investments that his broker has offered to him. The different cash flows are as follows: End of Year A B 1 300 400 2 300 300 4 600 300 300 5 300 300 6 7 300 300 600 Assuming a 15% discount rate, what is Frank's best alternative? (6 points) (Hint: To compare these alternatives, first you need to calculate the present value of each alternative, separately. The one that makes the biggest PV (in absolute value) is the best alternative.)