If XYZ Company has total assets of $2.1 million and current assets of $700,000. Its current liabilities are $400,000, and its long-term liabilities are $1.3 million. Based upon this information, determine the following:

1. What is the current ratio? ______________

2. What should it be? ______________

3. What does their current ratio imply? ______________

4. What is their working capital? _____________

5. What is the debt-to-asset ratio? ____________

6. What should it be? ______________

7. What does their debt-to-asset ratio imply? ______________

Your nonprofit organization has received a temporarily restricted fund of $200,000 to be used in 7 years. You can deposit it in a bank to earn 6% interest compounding yearly. How much will you have in seven years?

8. ____________

A donor has offered to give your nonprofit $5,000,000 in 5 years or $3,500,000 today. If you take the money today, you can invest it in a bank for a 4% return.

9. What is the present value of the future amount? ______________

10. Based solely on the value, which option should you choose? _____________

Your school is considering refurbishing the lighting system in its administration building. You have two options: 1) Ergolight system that costs $800,000 to purchase and install; 2) a conventional system that costs $100,000 to purchase and install. Both systems are expected to last for 20 years. The energy and maintenance costs for option 1 are $30,000 and $30,000 respectively per year. The energy and maintenance costs for option 2 are $80,000 and $12,000. Assuming that all costs are to be paid at the end of the year and the real discount rate is 4%, provide the following information:

11. _____________ NPV of Ergolight

12. _____________ NPV of the conventional system

13. _____________ Which choice do you make?

Your theater must decide how to allocate your endowment fund between equity and bonds. You expect that the inflation rate will be 2.9 for the next year and that the return rate will be 11.5% for equity and 1.25 % for bonds. To provide a 4.5% spending for your endowment program, provide the following allocation information:

14. ____________ % in equity

15. ____________ % in bonds