Fi515 Week 2 Homework

In: Business and Management

Submitted By scotas3
Words 503
Pages 3
3-1 Days Sales Outstanding
Accounts Receivable
Average Credit Sales
Solution:
? = 20,000x20 = $400,000 (Accounts Receivable)
400,000 = 20
20,000
3-2 Debt Ratio
Total Liabilities / Total Assets
Solution:
60%
3-3 Market/Book Ratio
Market price per share / Book value per share
Book value per share = Common equity / shares outstanding
Book value per share = $6,000,000,000 / 800,000,000 = 7.5
Solution: $75 / 7.5 = 10
3-4 PE Ratio
Price/Earnings Ratio = Price per share / Earnings per share
8*3.00 = 24
24/$1.50 = 16
3-5 ROE
ROE = ROA x Equity Multiplier
ROA = Profit Margin x Total assets turnover
ROA = .03 x 2 = .06
ROE = .06 x 2.0 = .12 = 12%
3-6 Du Pont Analysis
Total Assets Turnover = 5
ROA = Profit Margin x Total Assets Turnover
10% = 2% x ?
10% / 2% = 5
Equity Multiplier = 1.5
ROE = Profit Margin x Total Assets Turnover x Equity Multiplier
15% = 2% x 5 x ?
15% / .1 = 1.5
3-7 Current and Quick Ratios
Quick Ratio = Current Assets – Inventories / Current Liabilities
Current Liabilities = $3,000,000 / 1.5
Current Liabilities = $2,000,000 1.0 = $3,000,000 - ? / $2,000,000
Inventories = $1,000,000
4-1 FV of Single Amount
FV = PV (1+ I)^N
FV = $10,000 (1+.10)^5
FV = $10,000 (1.10)^5
FV = $16,105.10
4-2 PV of Single Amount
1292.10
PV = FVn / (1+I)^N
PV = $5,000 / (1+ .07)^20
PV = $5,000 / (1.07)^20
PV = $1292.10

4-6 FV of Ordinary Annuity
FVAn = PMT { (1+I)^n / I – 1/I }
FVAn = $300 [ (1+.07)^5 / .07 – 1/.07]
FVAn = $300 [ (1.40) / .07 – 14.28]
FVAn = $300 [20.0364 – 14.2857]
FVAn = $300[5.7507]
FVAn = $1725.21
FVAdue = $1725.21 (1.07) = $1845.97
4-13 a PV of an Annuity
PVAn = PMT [1/I – 1/I (1+I)^n] a) PVAn = $400 [1/.10 - 1/.10(1+.10)^10
PVAn = $400 [10 – 3.8554]
PVAn = $400[6.1446]
PVAn = $2457.84 b) PVAn = $200[1/.05 - 1/.05(1+.05)^5
PVAn = $200[20 – 15.6715]
PVAn = $200[4.3285]
PVAn =…...

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