Operating Profit Margin, Debt Ratio, Total Asset Turnover Ratio, Inventory Days, Profit Margin, Receivable Days, and Cash Ratio, ROA & EQUITY multiplier. (One year = 365 days) D) If EPS is $2 for Orange Inc. then how many common stocks do they have outstanding? What is the market value per share for Orange, if P/E ratio is 5? (3) E) What is P/E of Tesla at this moment? Explain whether it's high or low? (hint: yahoo finance or WSJ quotes to check Tesla Stock price and Net profit). (4) F) A company has a profit margin of 8.8%, total asset turnover of 3.7, assets of $88,000 and liabilities of $25,000. How would the ROE change it profit margin increases to 9.5%, sales decrease by 5% and all balance sheet items stay the same? (4) 2. State the main difference in between - a) Money and Capital Market b) Primary and Secondary Market (4) 3. Why is increasing shareholder's value the ultimate goal of a corporation instead of increasing profit? 4. What is bitcoin? Do you think cryptocurrency can disrupt the current financial system? (3) TVM Problems (3*5 = 15 marks): Please use 2 decimal points for your calculation. There will be mark deductions in failing to do so. 1. You plan to accumulate $450,000 over a period of 12 years by making equal annual deposits in an account that pays an annual interest rate of 9% (assume all payments will occur at the beginning of each year). What amount must you deposit each year to reach your goal? 2. You are planning to buy your dream mansion and for that you have decided to make 3 independent investments with your savings money in the next 44 years. You plan to invest $4,100 at the end of each year for the first 17 years, $6,900 at the end of each year for the following 11 years, $14,500 at the end of each year for the last 16 years. You believe you will earn an effective annual rate of return of 9.7% on your investment. If the price of your dream mansion will be $1,000,000 after 44 years, will you be able to fulfill your dream with those 3 investments ? 3. You can invest $77000 today with an annual interest rate of 12% for 40 years. If you decide to deposit the same amount after 14 years, instead of today, how better or worse off would you be? In reality, you don't have enough money to invest now. However, in 10 years you will have enough savings to invest. How much would you have to invest after 10 years from today with the same interest rate (12% EAR) to have the originally planned amount (FV of investing $77000 today for 40 years) after 40 years? Operating Profit Margin, Debt Ratio, Total Asset Turnover Ratio, Inventory Days, Profit Margin, Receivable Days, and Cash Ratio, ROA & EQUITY multiplier. (One year = 365 days) D) If EPS is $2 for Orange Inc. then how many common stocks do they have outstanding? What is the market value per share for Orange, if P/E ratio is 5? (3) E) What is P/E of Tesla at this moment? Explain whether it's high or low? (hint: yahoo finance or WSJ quotes to check Tesla Stock price and Net profit). (4) F) A company has a profit margin of 8.8%, total asset turnover of 3.7, assets of $88,000 and liabilities of $25,000. How would the ROE change it profit margin increases to 9.5%, sales decrease by 5% and all balance sheet items stay the same? (4) 2. State the main difference in between - a) Money and Capital Market b) Primary and Secondary Market (4) 3. Why is increasing shareholder's value the ultimate goal of a corporation instead of increasing profit? 4. What is bitcoin? Do you think cryptocurrency can disrupt the current financial system? (3) TVM Problems (3*5 = 15 marks): Please use 2 decimal points for your calculation. There will be mark deductions in failing to do so. 1. You plan to accumulate $450,000 over a period of 12 years by making equal annual deposits in an account that pays an annual interest rate of 9% (assume all payments will occur at the beginning of each year). What amount must you deposit each year to reach your goal? 2. You are planning to buy your dream mansion and for that you have decided to make 3 independent investments with your savings money in the next 44 years. You plan to invest $4,100 at the end of each year for the first 17 years, $6,900 at the end of each year for the following 11 years, $14,500 at the end of each year for the last 16 years. You believe you will earn an effective annual rate of return of 9.7% on your investment. If the price of your dream mansion will be $1,000,000 after 44 years, will you be able to fulfill your dream with those 3 investments ? 3. You can invest $77000 today with an annual interest rate of 12% for 40 years. If you decide to deposit the same amount after 14 years, instead of today, how better or worse off would you be? In reality, you don't have enough money to invest now. However, in 10 years you will have enough savings to invest. How much would you have to invest after 10 years from today with the same interest rate (12% EAR) to have the originally planned amount (FV of investing $77000 today for 40 years) after 40 years