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##### Financial Problems Set

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Question;Question 1ABC is reviewing a project that will cost $1,798.The project will produce cash flows $630 at the end of each year for the first two years and $651 at the end of each year for the next three years. What is the profitability index? Assume interest rate is 14%.Question 2If you receive $239 at the end of each year for the first two years and $701 at the end of each year for the next two years.Assume interest rate is 4%. What is the value at the end of the 4th year? That is. solve for FV at the end of the 4th year.Question 3ABC Company lists total assets of $3,415, current liabilities of $359, long-term debt of $837, and 179 shares of common stock. If the market price per share is $84, what is the market-to-book ratio?Question 4Consider a taxable bond with a yield of 9.4% and a tax-exempt municipal bond with a yield of 5.5%. At what tax rate would you be indifferent between the two bonds?Question 5ABC, Inc. has total assets of $165,822, current assets of $39,874, current ratio of 2.7, and equity multiplier of 5.9. Compute long term debt.Question 6ABC Company had beginning retained earnings of $2,045. During the year, the company reported sales of $17,091, costs of $6,111, depreciation of $1,290, dividends of $1,305, and interest paid of $1,993. The tax rate is 19 percent. What is the retained earnings balance at the end of the year?Question 7What is the effective rate of 27.49% compounded quarterly?Question 8Suppose you take a mortgage for $68,010 for 19 years with annual payments. If the annual interest rate is 5.8%, calculate the total interest amount paid over the life of the loan. That is, calculate the total interest paid in 19 years.Hint: Use the amortization table.Question 9ABC, Inc. has a total asset turnover of 1.4 and a net profit margin of 7.6%. The firm has a return on equity of 29.3%. Calculate Marshall?s debt ratio.

Paper#50052 | Written in 18-Jul-2015

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