C. CALCULATION SECTION

Instructions: In this section, please show all calculations. Partial credit will be given wherever possible, when your calculations are shown and they are completed correctly.

37.38. Assume that Pet Supplies Galore has the following values on its most recent Balance Sheet:

Account	Value
Cash	$175,200
Accounts Receivable	232,600
Inventory	435,000
Total Current Assets	842,800
Current Liabilities	$745,500

Using the information in the table shown above, calculate the Current Ratio for Pet Supplies Galore:

Now, assume that Pet Supplies Galore discovers that $50,000 of the $232,600 Account Receivable listed on its most recent Balance Sheet are uncollectible.The Senior Accountant at Pet Supplies Galores corporate office in Seattle, Washington removes these $50,000 of uncollectible accounts from the firms Accounts Receivable balance and expenses them on the Income Statement as a Bad Debt Expense.Following this adjustment, what is Pet Supplies Galores updated Current Ratio?

39. Antonios Italian Restaurant charged Will and Mary $76.00 for their recent anniversary dinner. If Will and Mary paid by credit card and Antonios bank charges 2% for processing credit card payments, what are the net proceeds that Antonios Italian Restaurant received from this transaction?

40.41. Moreland Medical Centers financial statements for its fiscal year just ended show Net Sales on account of $1,750,000 and outstanding Accounts Receivable of $167,500. Based on this information, please calculate the following:

The Accounts Receivable Turnover Rate:

The Collection Days or Average Collection Period based on the Accounts Receivable Turnover Rate that you calculated above.

42.43. Calculate the Interest Expense that would be due on a simple interest loan of $150,000 used to finance the inventory at Larsons Lumber Company. Assume the loan is outstanding for one year and the annual interest rate charged by First State Bank on the loan is 7%.

Now, assume that business has increased at Larson Lumber Company during the spring months and John Larson, the owner, is able to repay the loan after only five months.How much interest would be owed on this $150,000 loan if it is outstanding for only five months, assuming the annual 7% interest rate?

44. What is the Future Value (FV) of $15,000 that is deposited on January 1, Year 1 and earns 6% interest per year for four years (i.e., interest is earned through December 31, Year 4)?

45. How much should you deposit into an account today (at t = 0) to accumulate $120,000 ten years from now (on December 31, Year 10) for your retirement, assuming that you can earn 5% per year, compounded annually, on this deposit?

46. Use the Rule of 72 to calculate the approximate number of years that it will take an investment to double, assuming that 8% can be earned annually on the investment.

47.48. Great Grocery Store, a local retail grocery store, is considering a $250,000 expenditure for new freezers in its Frozen Food Department. These freezers are expected to have a $25,000 salvage value at the end of their eight-year life.

Based on the above information, calculate the annual Depreciation Expense for the new freezers.Assume that the straight-line depreciation method is used.

If Great Grocery Store is in the 25% tax bracket, calculate the annual tax savings that

the firm will realize due to the tax-deductibility of the non-cash Depreciation

Expense on these new freezer.

49. The Farm Store, a farm implement retail company, is considering an expenditure of $2,750,000 for a new storage shed for some of its inventory. The annual after-tax benefit that is expected from this expenditure is estimated to be $925,000. Based on this information, what is the Payback Period for this expenditure for the new storage shed?

50. Best Books and More, a retail book store, is considering the purchase of a new computer system. The firm now intends to offer its customers on-line access to e-Books in its extensive inventory. The computer system had an initial cost of $356,000. It is expected to generate the following after-tax cash flow values for the next five years:

Year	Amount
1	$98,000
2	140,500
3	250,000
4	262,750
5	169,000

The Weighted Average Cost of Capital (WACC) for Best Books and More is 10%. Based on this information, what is the Net Present Value (NPV) of the proposed computer system?