Question 1: Consider all questions below

1) Sam Lawson is a vice president at a large communications firm. His compensation includes a salary of $430,000, a bonus of $215,000 and a stock option package that allows him to purchase 33,000 shares of the company's stock at $45 per share. He can exercise the option anytime within a three-year period that starts on the first of next month. The stock is now selling at $63 per share. If the current price holds until the first of the month, and Sam exercises his option, how much will he make this year?

2)Henderson Industries Inc.'s stock is currently selling at $22.80 per share. Sharon Jacobs, the CEO, has options to buy 270,000 shares at $26.00 per share that expire at the end of this year. Sharon feels that if the traditional accounting method is used, implementing the deferred payment sales program will push the stock's price about half way toward the level it was at two years ago which was about $50.00.

If Sharon Jacobs is also a founder of the company and has retained 6 million shares of its stock, how much of a difference will the auditors' decision make in her personal wealth outside of the stock option? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to one decimal place.

fill in the blank

$_____million

3)Nu-Mode Fashions Inc. manufactures quality women's wear and needs to borrow money to get through a brief cash shortage. Unfortunately, sales are down, and lenders consider the firm risky. The CFO has asked you to estimate the interest rate Nu-Mode should expect to pay on a one-year loan. She's told you to assume a 3.4% default risk premium, even though the loan is relatively short, and to assume the liquidity and maturity risk premiums are each %. Inflation is expected to be 4.5% over the next 12 months. Economists believe the pure interest rate is currently about 3%. Round your answer to one decimal place.

4)What is the future value of $3,220.84 deposited for 6 years at an interest rate of 9%? Round the answer to the nearest cent.

5)How much will $185 grow into if it is invested at 10% for 35 years? Round the answer to the nearest cent.

6)If you deposit $237.8 in an account that pays 4% and leave it there for 13 years, how much will you have in the account? Round FVF values in intermediate calculations to four decimal places. Round the answer to the nearest cent.

7)How much is a guaranteed promise of $15,950 to be received in 10 years worth today if interest is 16%? Round the answer to the nearest cent.

8)At what interest rate will $1,500 grow into $4,039.16 in 17 years? Round the answer to the nearest whole percentage. Do not round your intermediate calculations.

9)How much will $500 per year deposited at 13% be worth in 8 years? Round the answer to the nearest cent. Round FVFA value in intermediate calculations to four decimal places.

10) What interest rates are implied by the following lending arrangements?

You borrow $520 and repay $577.20 in one year. Round the answer to the nearest whole percentage. Do not round your intermediate calculations.

a) You lend $1,810 and are repaid $1,883.12 in two years. Round the answer to the nearest whole percentage. Do not round your intermediate calculations.

b)You lend $760 and are repaid $1,129.32 in five years with quarterly compounding. Round the answer to the nearest whole percentage. Do not round your intermediate calculations. (Note: Be sure to give your answer as the annual nominal rate.)

c)You borrow $12,500 and repay $21,364.24 in three years under monthly compounding. Round the answer to the nearest whole percentage. Do not round your intermediate calculations. (Note: Be sure to give your answer as the annual nominal rate.)

11)Branson Inc. has sold product to the Brandywine Company, a major customer, for $23,000. As a courtesy to Brandywine, Branson has agreed to take a note due in two years for half of the amount due.

a)What is the effective price of the transaction to Branson if the interest rate is:

6%. Round the answer to the nearest whole dollar. Round PVF values in intermediate calculations to four decimal places. Do not round other intermediate calculations.

b)8%. Round the answer to the nearest whole dollar. Round PVF values in intermediate calculations to four decimal places. Do not round other intermediate calculations.

c)10%. Round the answer to the nearest whole dollar. Round PVF values in intermediate calculations to four decimal places. Do not round other intermediate calculations.

d)12%. Round the answer to the nearest whole dollar. Round PVF values in intermediate calculations to four decimal places.

Questions 2: Answer all questions below

LONG-TERM ASSETS 121 REQUIRED Income statement questions: 1. Are total revenues higher or lower over the three-year period? 2. What is the percent change in total revenues from 2007 to 2009? 3. Is the percent of cost of goods sold to total revenues increasing or decreasing over the three- year period? As a result, is the gross margin percent increasing or decreasing" 4. Is the percent of total operating expenses to total revenues increasing or decreasing over the three-year period? As a result, is the operating income percent increasing or decreasing? 5. Is the percent of net income to total revenue increasing or decreasing over the three-year period? Balance sheet questions: 6. Are total assets higher or lower over the three-year period? 7. What is the percent change in total assets from 2007 to 2009? 8. What are the largest asset investments for the company over the three-year period? 9. Are the inventories increasing faster or slower than the percent change in total revenues? 10. Is the percent of total liabilities to total liabilities + owners' equity increasing or decreasing? As a result, is there more or less risk that the company could not pay its debts? Integrative income statement and balance sheet question: 1 1. Is the company operating more or less efficiently by using the least amount of asset investment to generate a given level of total revenues? Note that the "total asset turnover" ratio is computed and included in the "ratio analysis summary". Ratio analysis questions: 12. Is the current ratio better or worse in the most current year compared to prior years? 13. Is the quick ratio better or worse in the most current year compared to prior years? 14. Is the accounts receivable turnover ratio I (based on average receivables) better or worse in the most current year compared to prior years? 15. Is the 2009 accounts receivable turnover ratio 2 (based on year-end receivables) better or worse than the 2009 ratio based on an average? 16. Is the inventory turnover ratio I (based on average inventory) better or worse in the most current year compared to prior years? 17. Is the 2009 inventory turnover ratio 2 (based on year-end inventory) better or worse than the 2009 ratio based on an average? 18. Is the return on total assets (ROA) ratio better or worse in the most current year compared to prior years?CHAPTER BEST BUT CO. ING. COMPARATIVE COMMON-BUT INCOME STATEMENTS I De pearsended Feb. H Hop, Mar 1, Itg), and Her. $. For God of ponds gold Be march ind developrant 1131 0 213010 8150 1, 370 BEST BUY CO INC COMPARATIVE COMMON-BUT BALANCE SHEETS Feb. 21, 1903, Mar. 1, 2908, and Mar. J. NOT in miWongi ASSETS Current 11.8 9 30 04 4.024 0 Insuntory 10130 TIZO Oner cumnl itabs Talal commit ain't Fond Property A equipment, Fit 4.7% 318 0 1. 185 0 Invinny bles I poodail 1.0010 100 03 5 13 7910 LIABILITIES Short-form that 7. 178.0 8,049.0 47AN 30%$ 531.0 2710 4 79 On lined Income tax listitnon 1.4220 10 2% OWNERS EQUITY Total camps' equity Foul Nabilities and careers equity 314 5 63010 10ON 8 12 7580 100.05 4 1275100 BEST BUY CO. INC IHole- percents may not add to The hat to RATIO ANALYSIS SUMMARY For the yours anded Fab. 28, 2009, Mar, 1, 2010, and Mar. 3, 3907 SHORT-TEAM LIQUIDITY RATIOS 2080 Quick Ratio Cinch + Shortom Insulmints + Account Rych biel Curent Liabilities 1.09 Ancouch Recaleable Turnover 1 Haverun Average Accounts Recunable] /Yearend Accounts Reophable) 37.25 Inwwwtory Turnover 2 [Cost Goods Bold/fair-and Inantory) LONG-TERM SOLVENCY (LEVERAGE) RATIO 7.1 Total Debt Rule (Toul Libifyou Tool Anmetal 7.10 PROFITABILITY RATIOS Grow Prof Bugin (Crops Magin Revrun) Operating Profit Margin Operating Income Revenues Net Profit Margin [Barn on Sales) (803) [het hcome Revenues) 24.AJK Tokill Anget Turnover Pierces/Average Total Assets) 4.15% Butum on Total Arts (RCA) (Net heamalAwrage Total Assets) 2.23% 3.15 1.04 7.02% 10 89Question 5 The company has a $150,000 liability at December 31, 2021, of which $30,000 of it is payable in 2027. in to Orcenter 31, 2021 balance sheet, the company reports the $150,000 debt as a: $150,000 current liability in the balance sheet. $30,000 current liability and a $120,000 long-term liability in the balance sheet. $150,000 long-term liability in the balance sheet. $120,000 current liability and a $30,000 long-term liability in the balance sheet. . PreviousQuestion 35 (1 point) What do we know about regulation of a firm in a monopolistically competitive market? It usually implies a very small administrative burden. It will lower the firm's costs. It is commonly used to enhance market efficiency. It is unlikely to improve market efficiency. Question 36 (1 point) What type of externalities accompany the entry of new firms into a monopolistically competitive market? the product-variety externality as a positive externality and the business-stealing externality as a negative externality the product-variety externality as a negative externality and the business-stealing externality as a positive externality the business-variety externality as a positive externality and the product-stealing externality as a negative externality O the business-variety externality as a negative externality and the product-stealing externality as a positive externalityE. One month Question 5: An increase in real wealth in India will . Select all that apply. Choose one or more: A. increase Indian aggregate demand B. decrease Indian aggregate demand C. increase U.S. aggregate demand D. decrease U.S. aggregate demand Question 6: Choose the right answer: Net exports will increase/decrease/stay the same when the value of the dollar result, the aggregate demand curve will shift left/increase. ECON 1204-001 Principles of Macro Spring 2019 Question 7