1. Zhang Company has a loan agreement that provides it with cash today, and the company must pay $25,000 4 years from today. Zhang agrees to a 6% interest rate. The present value of 1 (single sum) for 4 periods at 6% is 0.7921. What is the amount of cash that Zhang Company receives today?

2.

The current year-end balance sheet data for a company are shown below.

Assets: Cash $ 38,000 Marketable securities 45,000 Accounts receivable (net) 127,500 Merchandise inventory 149,500 Long-term investments 135,000 Plant assets (net) 517,500 Total assets $ 1,012,500 Liabilities and equity: Accounts payable $ 148,700 Accrued liabilities 90,000 Notes payable (secured by plant assets) 254,800 Common stock ($12 par) 180,000 Contributed capital in excess of par 135,000 Retained earnings 204,000 Total liabilities and equity $1,012,500

Calculate the following ratios. Be sure to show your work.

Required:

(a) working capital (b) current ratio (c) acid-test ratio.