Floyd's corporation has $25,000 in current liabilities and $33,000 in current assets. Its initial inventory level is $8,000; and it will rise funds as additional notes payable and use them to increase inventory. How much can Floyd's short-term (notes payable) increase without pushing its current ratio below 1.1

For your answer, round to the nearest 0.01. Do not use the dollar ($) sign. DO NOT USE commas to separate thousands.

Your Answer:

Question 21 options:

Answer

Question 22 (5 points)

Listen

(Estimated time allowance: 16 minutes) Use the data from the financial statements of a company shown here to answer ONE question (asked below the balance sheet for 2020).

To get the data below and answer the questions, you can do one of the following approaches:

1. Use the screen image shown

2. Position cursor any place in the image, double click and select all; copy and paste into an excel file

3. Click here for a formatted excel version (need to update numbers to the ones presented here)

$

Income Statement year ending 2020
Sales Revenues	$160
Cost of goods sold	36
Fixed costs
Selling, general, and administrative expenses
Depreciation	8
EBIT	$50
Taxes
Net Operating Profits after Taxes (NOPAT)
*** Tax rate	30%
Dividends paid	$10
Partial Balance Sheet 12/31/2019
ASSETS		LIABILITIES
Current Assets		Current Liabilities
Cash	$3	Accruals	$7
Accounts receivable		Accounts payable
Inventories	4	Total current liabilities	$12
Total current assets	$16	Long-term debt
		Total Liabilities
Gross Fixed assets	75	OWNERS' EQUITY
Accumulated depreciation	10	Retained earnings (1)
Net Fixed assets		Common stock
Intangible assets	0	Total owner's equity
TOTAL ASSETS		TOTAL LIABILITIES & OWNER'S EQUITY
(1) These are cumulative retained earnings but textbook simply calls it retained earnings
Partial Balance Sheet 12/31/2020
ASSETS		LIABILITIES
Current Assets		Current Liabilities
Cash	$3	Accruals	$7
Accounts receivable		Accounts payable
Inventories	5	Total current liabilities	$13
Total current assets	$13	Long-term debt	15
Gross Fixed assets	107	Total liabilities
Accumulated depreciation		OWNERS' EQUITY
Net Fixed Assets		Retained earnings
Intangible assets	0	Common stock
Total long-term assets		Total owner's equity
TOTAL ASSETS		TOTAL LIABILITIES & OWNER'S EQUITY

When answering, round to the nearest dollar and DO NOT use dollar signs, DO NOT USE commas to separate thousands, DO NOT use parenthesis to denote negative numbers, USE the negative sign and place it in front of first digit of your answer when your answer is a negative number. For example, if your result is $43.6 then enter 44; if it is -$3 then enter -3; if it is $2,456.786 then enter 2457

The Free Cash Flow (FCF) for 2020 is _____________

Your Answer:

Question 22 options:

Answer

Question 23 (5 points)

Listen

What is the return on the market portfolio (rM), when the risk-free rate (rRF) is 2.6% and the market is in equilibrium and if a stock has a beta of 1.1 and a required rate of return of 12.3%?

Show your answer to the nearest .1% using whole numbers (e.g., enter 14.1% as 14.1 rather than .141).

Your Answer:

Question 23 options:

Answer

Problems II

Question 24 (6 points)

Listen

You have just taken out a 10-year, $ 250,000 mortgage loan at an annual interest rate of 9%. The mortgage has monthly payments. What is the amount of each payment? Calculate your answer to the nearest $.01. Enter your answer as a positive number.

For your answer, round to the nearest $0.01 and do not use commas to separate thousands. Do not use the $ or , sign.

Your Answer:

Question 24 options:

Answer

Question 25 (10 points)

Listen

Question 25 options:

Balance sheet. Use the data from the financial statements of a company shown below. Use it to answer the 7 questions that follow it. When answering the questions (filling in the blanks), DO NOT use dollar signs, DO NOT USE commas to separate thousands, DO NOT use parenthesis to denote negative numbers, USE the negative sign and place it in front of first digit of your answer when your answer is a negative number. Round to the nearest dollar.

Income Statement year ending 2016
Sales Revenues	$500,000
Cost of goods sold	355,000
Fixed costs	58,000
Selling, general, and administrative expenses	25,334
Depreciation	20,000
EBIT
Interest expense	0
Taxable Income
Taxes
Net Income	25,000
*** Tax rate	40%
Dividens paid	5,000
Partial Balance Sheet 12/31/2015
ASSETS		LIABILITIES
Current Assets		Current Liabilities
Cash	15,000	Notes payable	10,000
Accounts receivable	35,000	Accounts payable	17,000
Inventories	25,000	Total current liabilities
Total current assets		Long-term debt	118,000
		Total Liabilities
Gross Fixed assets		OWNERS' EQUITY
Accumulated depreciation	100,000	Retained earnings (1)	70,000
Net Fixed assets		Common stock	200,000
Intangible assets	0	Total owner's equity
TOTAL ASSETS		TOTAL LIABILITIES & OWNER'S EQUITY
(1) These are cumulative retained earnings but textbook simply calls it retained earnings
Partial Balance Sheet 12/31/2016
ASSETS		LIABILITIES
Current Assets		Current Liabilities
Cash	2,000	Notes payable	20,000
Accounts receivable	20,000	Accounts payable	20,000
Inventories	28,000	Total current liabilities
Total current assets		Long-term debt
Gross Fixed assets		Total liabilities	60,000
Accumulated depreciation		OWNERS' EQUITY
Net Fixed Assets		Retained earnings
Intangible assets	0	Common stock	200,000
Total long-term assets		Total owner's equity
TOTAL ASSETS		TOTAL LIABILITIES & OWNER'S EQUITY

DO NOT use dollar signs, DO NOT USE commas to separate thousands, DO NOT use parenthesis to denote negative numbers, USE the negative sign and place it in front of first digit of your answer when your answer is a negative number. Round to the nearest dollar.

1. What is the EBIT in 2016?

2. What is amount for Total Liabilities & Owner's Equity for 2015?

3. What is the change in Retained Earnings from 2015 to 2016?

4. What is the amount for Retained Earnings in the Balance Sheet in 2016?

5. What is the amount for Net Fixed Assets in the Balance Sheet in 2015?

6. What is the amount for Total Owner's Equity in the Balance Sheet for 2016?

7. What is the amount for Long-Term debt in the Balance Sheet in 2016?

Problems I

Question 15 (5 points)

Listen

What is the price today of a Beatifull Corp. bond? The bond matures in 30 years, has a coupon rate of 7%, and has, today, a yield to maturity (YTM) of 11%. The bond has semiannual coupon payments and a par value of $1,000.

For the answer: round to the nearest 0.01 cent; do not use comma to separate thousands; and do not use the dollar ($) sign.

For excel file with TVM formulas, click here

Your Answer:

Question 15 options:

Answer

Question 16 (5 points)

Listen

You have just bought a house and have taken out a mortgage (an installment) loan for $500,000. This is a 30-year loan that requires monthly payments and the first payment is due one month from today. The APR for the loan is 24%. You are interested to know how much of your 230^th monthly payment will go toward the repayment of principal?

That amount is _______________

Calculate your answer to the nearest $.01 and do not use the $ sign. DO NOT USE commas to separate thousands (though some problems will accept it). Enter your answer as a positive number. For example if you obtain a result of $1,245.739then enter 1245.74; if the result is $340, then enter 340.00

Your Answer:

Question 16 options:

Answer

Question 17 (5 points)

Listen

The bond of Nichols Corp. is currently trading at (price of a bond) $700.00. The bond matures in 30 years and has, today, a yield to maturity (YTM) of 8%. This is a semiannual coupon bond with a par value of $1,000.

The coupon rate of this bond is ________

For the answer: round to the nearest 0.01%; enter in % nomenclature BUT do not use the percentage (%) sign. For example, if your result is 8.957% (or 0.08957) then enter 8.96; if your result is 6% then enter 6.00

For excel file with TVM formulas, click here

Your Answer:

Question 17 options:

Answer

Question 18 (5 points)

Listen

Tyre N. currently manages a $700,000 portfolio. He is expecting to receive an additional $200,000 from a new client. The existing portfolio has a required return of 11.3%. The risk-free rate is 2.3% and the return on the market is 11.4%. If Tyre wants the required return on the new portfolio to be 13.8%, what should be the average beta for the new stocks added to the portfolio?Enter your answer in % form (do not write the symbol %) and round your final answer to two decimals: for example

if you obtain 0.10 then enter 10.00;

if you obtain 5.739% then enter 5.74;

if you obtain 0.0099; then enter 1.00

Your Answer:

Question 18 options:

Answer

Question 19 (5 points)

Listen

Question 19 options:

Use the following information to answer the two questions below.

State of Prob. of the Rate of return if state occurs

the economy state of economy Stock A Stock B

Boom 0.75 0.15 0.02

Bust 0.25 0.05 0.02

You MUST use 4 digits in every calculation you do in order for your answer to be the same as the one in the system. When entering your answer, round to the nearest 0.01% but do not enter the % sign. For example, if your answer is 3.484% enter 3.48; if your answer is 0.12013 then enter 12.01

What is the expected return of a portfolio with 20% in asset A and 80% in Asset B?

What is the variance of the portfolio with 20% in asset A and 80% in Asset B?