Fi 515 Week 1

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(3-1)Greene Sisters has a DSO of 20 days. The company’s average daily sales are $20,000. What is the level of its accounts receivable? Assume there are 365 days in a year. AR = $400,000

(3-2)Vigo Vacations has an equity multiplier of 2.5. The company’s assets are financed with some combination of long-term debt and common equity. What is the company’s debtratio? D/A = 60%

(3-3)Winston Washers’s stock price is $75 per share. Winston has $10 billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt, and $6 billion in common equity. It has 800 million shares of common stock outstanding. What is Winston’s market/book ratio? M/B = 10

(3-4)A company has an EPS of $1.50, a cash flow per share of $3.00, and a price/cash flow ratio of 8.0. What is its P/E ratio? P/E = 16.0

(3-5)Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 2.0. Its sales are $100 million and it has total assets of $50 million. What is its ROE? ROE = 12%

(3-6)Donaldson & Son has an ROA of 10%, a 2% profit margin, and a return on equity equal to 15%. What is the company’s total assets turnover? What is the firm’s equity multiplier? S/TA = 5
TA/E = 1.5

(3-7)Ace Industries has current assets equal to $3 million. The company’s current ratio is 1.5, and its quick ratio is 1.0. What is the firm’s level of current liabilities? What is the firm’s level of inventories? CL = $2,000,000

Inv = $1,000,000

(4-1)If you deposit $10,000 in a bank account that pays 10% interest annually, how much will be in your account after 5 years? FV = $16,105.10

(4-2)What is the present value of a security that will pay $5,000 in 20 years if securities of equal risk pay 7% annually? FV = $1,292.10

(4-6)What is the future value of a 7%, 5-year ordinary annuity that pays $300 each year? If this were an annuity due, what would its future value be? FV = $1,725.22
FVA = $1,845.99

(4-13)Find the present value...
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