Answer the questions with financial Calculator Solutions:

5.1 Amit Patel is planning to invest $10,000 in a bank certificate of deposit (CD) for five years. The CD will pay interest of 9 percent. What is the future value of Amit's investment?

5.4 You have an opportunity to invest $2,500 today and receive $3,000 in three years. What would be the return on your investment if you accepted this opportunity?

5.6 Future value: Your birthday is coming up and instead of other presents, your parents promised to give you $1,000 in cash. Since you have a part time job and thus don't need the cash immediately, you decide to invest the money in a bank CD that pays 5.2 percent, compounded quarterly, for the next two years. How much money can you expect to earn in this period of time?

5.9 Present value: Roy Gross is considering an investment that pays 7.6 percent, compounded annually. How much will he have to invest today so that the investment will be worth $25,000 in six years?

5.12 Present value:Tracy Chapman is saving to buy a house in five years. She plans to put 20 percent down at that time, and she believes that she will need $35,000 for the down payment. If Tracy can invest in a fund that pays 9.25 percent annual interest, compounded quarterly, how much will she have to invest today?

Bonus

3.21 Nimitz Rental Company provided the following information to its auditors. For the year ended March 31, 2017, the company had revenues of $878,412, general and administrative expenses of $352,666, depreciation expenses of $131,455, leasing expenses of $108,195, and interest expenses equal to $78,122. If the company's average tax rate is 34 percent, what is its net income after taxes?

3.22 Sosa Corporation recently reported an EBITDA of $31.3 million and net income of $9.7 million. The company had $6.8 million in interest expense, and its average corporate tax rate was 35 percent. What was its depreciation and amortization expense?

4.26 DuPont equation: Carter, Inc., a manufacturer of electrical supplies, has an ROE of 23.1 percent, a profit margin of 4.9 percent, and a total asset turnover ratio of 2.6 times. Its peer group also has an ROE of 23.1 percent, but has outperformed Carter with a net profit margin of 5.3 percent and a total asset turnover ratio of 3.0 times. Explain how Carter managed to achieve the same level of profitability as reflected by the ROE.

4.39 The TBI Company has a number of days of inventory of 50. Therefore, the TBI Company's inventory turnover is closest to:

a. 4.8 times.

b. 7.3 times.

c. 8.4 times.

d. 9.6 times.

4.4 Bummel and StrandCorp. has a gross profit margin of 33.7 percent, sales of $47,112,365, and inventory of $14,595,435. What is its inventory turnover ratio?