CORPORATE FINANCE

1. Jason's opportunity cost rate is 8 percent compounded annually. How much must he deposit in an account today if he wants to receive $5,400 at the end of each of the next 10 years? Nper = 10, Rate= 8, FV = 0, PMT = 5,400

2. If Emma purchased a 5 year annuity and she pays $5000 in year 1, $300 in year 2, $2000 in year 3, $1500 in year 4, and $1000 in year 5, at a 5% rate, what is the worth of the investment today?

Complete the balance sheet and sales information in the table that follows for Isberg Industries using the following financial data:

Debt ratio: 50%

Quick ratio: 0.80x

Total assets turnover: 1.5x

Days sales outstanding: 36.0 days

Gross profit margin on sales: (Sales Cost of goods sold)/Sales = 25%

Inventory turnover ratio: 5.0x

Balance Sheet:

3. Cash Accounts payable

4. Accounts receivable Long-term debt $ 60,000

5. Inventories Common stock

6. Fixed assets Retained earnings $ 97,500

7. Total assets $300,000 Total liabilities and equity

8. Sales Cost of goods sold

Campsey Computer Company: Balance Sheet as of December 31

Cash $ 77,500 Accounts payable $129,000

Receivables 336,000 Notes payable 84,000

Inventories 241,500 Other current liabilities 117,000

Total current assets $655,000 Total current liabilities $330,000

Net fixed assets 292,500 Long-term debt 256,500

Common equity 361,000

Total assets $947,500 Total liabilities and equity $947,500

Campsey Computer Company: Income Statement for Year Ended December 31

Sales $1,607,500

Cost of goods sold (1,353,000)

Gross profit $ 254,500

Fixed operating expenses except depreciation ( 143,000)

Earnings before interest, taxes, depreciation,

and amortization (EBITDA) $ 111,500

Depreciation ( 41,500) Earnings before interest and taxes (EBIT) $ 70,000

Interest ( 24,500) Earnings before taxes (EBT) $ 45,500

Taxes (40%) ( 18,200)

Net income $ 27,300

Using the information above, calculate the following ratios:

9. Current ratio

10. Days sales outstanding

11. Inventory turnover

12. Total assets turnover

13. Net profit margin

14. Return on assets (ROA)

15. Return on equity (ROE)

Debt ratio