5.

The following partial income statement and balance sheet information (in $ millions) comes from the Annual Report of Saratoga Springs Co. for the year ending 12/31/2016:

	Year ended 12/31/2016
Net sales		12,389
Total operating revenue		12,389
Cost of goods sold		5,767
Sales, general & administrative		2,269
Interest expense		616
Income before tax		867
Net income		642

	12/31/2016			12/31/2015
Cash and cash equivalents		1,175			104
Receivables, net		2,130			784
Inventories		1,495			799
Land, buildings and equipment at cost, net		17,740			6,168
Total assets		22,540			7,855
Accounts payable		8,942			3,631
Total current liabilities		8,942			3,631
Long-term debt		7,631			3,541
Deferred income taxes		591			623
Total liabilities		17,164			7,795
Minority interest		768			0
Retained earnings		4,608			60
Total stockholders' equity		5,376			60

Required:

Compute the profit margin on sales for 2016 of Saratoga Springs Co. (Round your answer to 1 decimal place.) PROFIT MARGIN: ?%

Required:

Compute the return on stockholders' equity for 2016 of Saratoga Springs Co. (Round your answer to 1 decimal place.) Return on stockholders equity: ? %

7.

Bill OBrien would like to take his wife, Mary, on a trip three years from now to Europe to celebrate their 40th anniversary. He has just received a $24,500 inheritance from an uncle and intends to invest it for the trip. Bill estimates the trip will cost $31,000 and he believes he can earn 7% interest, compounded annually, on his investment. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Complete the following table to calculate the future value.

Table or calculator function:
Present Value:
n =
i =
Future Value:

Will he be able to pay for the trip with the accumulated investment amount?

	Yes
	No

8.

John has an investment opportunity that promises to pay him $17,000 in four years. He could earn a 7% annual return investing his money elsewhere. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

What is the maximum amount he would be willing to invest in this opportunity?

Amount: ?

9.

Leslie McCormack is in the spring quarter of her freshman year of college. She and her friends already are planning a trip to Europe after graduation in a little over three years. Leslie would like to contribute to a savings account over the next three years in order to accumulate enough money to take the trip. Assume an interest rate of 6%, compounded quarterly. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

How much will Leslie accumulate in three years by depositing $660 at the beginning of each of the next 12 quarters?

Table or calculator function:
Payment:
n =
i =
Future Value: