Time Value of Money (10 points each)

(Use the attached time value tables.)

What is the future value of 10 $7,000 deposits made at the end of each of the next 10 years, earning interest of 6%?

A manufacturing company rents a factory for 5 years, the annual rent payments of $1,000,000 are due at the beginning of each year. If the relevant interest rate is %10, what is the present value of the rental obligations?

A parent wants to accumulate $30,000 in a fund for their child's college education. They have $10,000 to invest now. If they can earn 12% annually on their investment, how many years will it take to grow to the full $30,000?

You have just won a $10,000,000 Powerball jackpot. You will be paid in equal installments of $500,000 for 20 years. Assuming an 8% interest rate, what is the present value of the payments you will receive?

A Corporation wants to accumulate $250,000 by making periodic deposits of $50,000 at the end of each year, which will earn 9% interest. How many deposits must be made?

Ratio's (10 points each)

A Company has net income for the year of $500,000. They have declared preferred dividends of $50,000. The weighted average of common shares outstanding is 200,000. Calculate the earnings per share for the year.

A Company has current assets of $1,650,000 and current liabilities of 780,000. Calculate and interpret the current ratio.

A Company has cost of goods sold $267,000. The inventory account was $343,000 at the beginning of the year and $331,000 at the end of the year. Calculate the inventory turnover.

A Company has net income of $500,000 and total sales of $750,000. Calculate the profit margin.

A Company has current liabilities of $650,000. An analysis of the asset accounts reveal Cash $132,000, Marketable Securities $256,000, and Receivables $177,000. Calculate and interpret the acid-test ratio.