Your grandmother is offered a series of annual payments in the amount of $6,000 each.The payments will be made at the end of each of the next 10 years.Similar risk investments are yielding 7%.What should she be willing to pay for the investment?

a.$60,000

b.$45,091

c.$42,141

d.$30,501

Please use the information below for questions 36 - 41.

Income Statement Balance Sheet

Sales $20,000,000 Assets:

Cost of Goods Sold 8,000,000 Cash $5,000,000

12,000,000 Marketable Securities 12,500,000

Selling and Administrative1,600,000 Accounts Receivable, net 2,500,000

Depreciation Expense 3,000,000 Inventory 30,000,000

7,400,000 Prepaid Expenses 5,000,000

Interest 2.000,000 Plant & Equipment 30,000,000

5,400,000

Taxes (25%) 1,350,000 Total Assets 85,000,000

4,050,000

Common Stock Div. 600,000 Liabilities and Equity:

$3,450,000 Accounts Payable $20,000,000

Notes Payable 5,000,000

Accrued Expenses 5,000,000

Bonds Payable 25,000,000

Common Stock 5,000,000

Capital in Excess of Par 10,000,000

Retained Earnings 5,000,000

Total Liabilities and

Equity $85,000,000

Shares outstanding of common stock = 1,000,000

Market price of common stock = $18.

The Current Ratio is:

a.0.55

b.1.83

c.0.183

d.0.35

The Net Profit Margin is:

a.20.25%

b.37%

c.60%

d.13.7%

The Times Interest Earned ratio is:

a.3.7

b.0.27

c.2.7

d.0.62

EBITDA is:

a.10,400

b.5,400

c.7,400

d.11,400

The Debt to Equity ratio is:

a.3.25

b.1.43 times

c.2.75

d.0.70%

The Return on Equity is:

a.20.25%

b.3.81%

c.13.7%

d.0.162%