FIN2030 Quantitative Assignment, Week 2 - 1. Future Value. What is the future value of

FIN2030 Quantitative Assignment, Week 2

1. Future Value.  What is the future value of

a. $773 invested for 14 years at 11 percent compounded annually?

b. $210 invested for 7 years at 6 percent compounded annually?

c. $650 invested for 10 years at 9 percent compounded annually?

d. $615 invested for 7 years at 14 percent compounded annually?

 

2. Present Value. What is the present value of

a. $803 to be received 10 years from now at a 15 percent discount rate?

b. $406 to be received 6 years from now at a 5 percent discount rate?

c. $300 to be received 10 years from now at a 9 percent discount rate?

d. $632 to be received 14 years from now at a 14 percent discount rate?

 

3. Future Value of an Annuity. What is the future value of

a. $557 a year for 14 years at 5 percent compounded annually?

b. $748 a year for 8 years at 10 percent compounded annually?

c. $442 a year for 8 years at 12 percent compounded annually?

d. $976 a year for 12 years at 5 percent compounded annually?

 

4. Present Value of an Annuity. What is the present value of

a. $1,163 a year for 15 years at an 8 percent discount rate?

b. $329 a year for 7 years at a 15 percent discount rate?

c. $365 a year for 10 years at a 10 percent discount rate?

d. $883 a year for 6 years at a 5 percent discount rate?

 

5. How many years will it take to grow

a. $711 to a value of 2,028.19 at a compound rate of 14 percent?

b. $321 to a value of 450.22 at a compound rate of 7 percent?

c. $931 to a value of 1,305.78 at a compound rate of 7 percent?

d. $1,191 to a value of 4,189.79 at a compound rate of 15 percent?

 

6. Interest Rate. At what interest rate will it take to grow

a. $759 to a value of 1,017.13 over 6 years?

b. $614 to a value of 1,082.08 over 5 years?

c. $701 to a value of 1,311.16 over 6 years?

d. $1,190 to a value of 4,163.16 over 12 years?

 

7. Annuity. How many years will it take for a payment of

a. $825 to grow to 17,642.03 at a compound rate of 10 percent?

b. $356 from a future value of 13,271.58 at a compound rate of 12 percent?

c. $1,098 from a future value of 6,189.53 at a compound rate of 6 percent?

d. $733 from a future value of 14,365.80 at a compound rate of 5 percent?

 

8. Annuity. At what interest rate will a payment of

a. $346 grow to 12,898.78 over a period of 15 years?

b. $1,056 grow to 10,834.35 over a period of 8 years?

c. $696 grow to 22,113.65 over a period of 15 years?

 

9. Car Loans (Hint: P/Y=12). How much is a car loan with a payment of

a. $257 per month for 3 years at 6% interest per year?

b. $437 per month for 5 years at 15% interest per year?

c. $274 per month for 6 years at 7% interest per year?

d. $253 per month for 2 years at 7% interest per year?

 

10. Car Loans (Hint: P/Y=12). How many months will you pay on a car loan of

a. $18,708 with a payment of 406.76 per month at 11% interest per year?

b. $10,112 with a payment of 276.33 per month at 14% interest per year?

c. $32,705 with a payment of 1,101.96 per month at 13% interest per year?

d. $34,136 with a payment of 1,638.97 per month at 14% interest per year?

 

11. Car Loans (Hint: P/Y=12). What is the interest rate on a loan of

a. $8,000 with a payment of 218.61 per month for 4 years?

b. $16,000 with a payment of 368.47 per month for 4 years?

c. $24,000 with a payment of 521.82 per month for 5 years?

d. $32,000 with a payment of 664.27 per month for 5 years?

 

12. Mortgages (Hint: P/Y=12, House cost = Loan Value/0.9).

What is the house cost on a 10 percent down mortgage with payments of

a. $4,369.66 per month for 30 years at 10 percent interest?

b. $1,626.83 per month for 15 years at 11 percent interest?

c. $3,724.21 per month for 30 years at 8 percent interest?

d. $4,469.19 per month for 15 years at 14 percent interest?

13. Mortgages (Hint: P/Y=12). What is the interest rate on a mortgage of

a. $863,001 with a payment of 5,174.13 for 30 years?

b. $125,709 with a payment of 1,275.02 for 15 years?

c. $546,227 with a payment of 6,906.73 for 30 years?

d. $478,167 with a payment of 3,781.31 for 15 years?

 

14. Mortgages (Hint: P/Y=12). What is the payoff on a 30 year, 6% mortgage of

a. $255,413 with a payment of 1,531.33 with 7 years remaining?

b. $530,493 with a payment of 3,180.57 with 9 years remaining?

c. $297,266 with a payment of 1,782.26 with 13 years remaining?

d. $108,947 with a payment of 653.19 with 13 years remaining?

File name: Fin-2030-Quantitative-assignment-w2.xls File type: application/vnd.ms-excel Price: $25

Fin 370 week 3 - 4-6A. (Cash budget), 5-1A. (Compound interest), T5-4A. (Present value), 5-5A. (Compound annuity), 5-6A. (Present value of an annuity) - The Sharpe Corporation’s projected sales for the first eight months of 2004 are as follows

Fin 370 week 3 5 questions

4-6A. (Cash budget) The Sharpe Corporation’s projected sales for the first eight months of 2004 are as follows

5-1A. (Compound interest) to what amount will the following investments accumulate?
5-4A. (Present value) what is the present value of the following future amounts?
5-5A. (Compound annuity) what is the accumulated sum of each of the following streams of Payments?

5-6A. (Present value of an annuity) what is the present value of the following annuities?

QUESTIONS                                                                                        

4-6A. (Cash budget) The Sharpe Corporation’s projected sales for the first eight months of 2004 are as follows:

January $ 90,000 May $300,000
February 120,000 June 270,000
March 135,000 July 225,000
April 240,000 August 150,000

Of Sharpe’s sales, 10 percent is for cash, another 60 percent is collected in the month following sale, and 30 percent is collected in the second month following sale. November and December sales for 2003 were $220,000 and $175,000, respectively.

Sharpe purchases its raw materials two months in advance of its sales equal to 60 percent of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March.

In addition, Sharpe pays $10,000 per month for rent and $20,000 each month for other expenditures.
Tax prepayments of $22,500 are made each quarter, beginning in March.

The company’s cash balance at December 31, 2003, was $22,000; a minimum balance of $15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available.
Interest on short-term loans (12 percent) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional $60,500, these funds would be borrowed at the beginning of April with interest of $605 (.12 × 1/12 × $60,500) owed for April and paid at the beginning of May.

a. Prepare a cash budget for Sharpe covering the first seven months of 2004.
b. Sharpe has $200,000 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?


5-1A. (Compound interest) to what amount will the following investments accumulate? a. $5,000 invested for 10 years at 10 percent compounded annually
b. $8,000 invested for 7 years at 8 percent compounded annually
c. $775 invested for 12 years at 12 percent compounded annually
d. $21,000 invested for 5 years at 5 percent compounded annually

5-4A. (Present value) what is the present value of the following future amounts?
a. $800 to be received 10 years from now discounted back to the present at 10 percent
b. $300 to be received 5 years from now discounted back to the present at 5 percent
c. $1,000 to be received 8 years from now discounted back to the present at 3 percent
d. $1,000 to be received 8 years from now discounted back to the present at 20 percent

5-5A. (Compound annuity) what is the accumulated sum of each of the following streams of Payments? a. $500 a year for 10 years compounded annually at 5 percent
b. $100 a year for 5 years compounded annually at 10 percent
c. $35 a year for 7 years compounded annually at 7 percent
d. $25 a year for 3 years compounded annually at 2 percent

5-6A. (Present value of an annuity) what is the present value of the following annuities? a. $2,500 a year for 10 years discounted back to the present at 7 percent
b. $70 a year for 3 years discounted back to the present at 3 percent
c. $280 a year for 7 years discounted back to the present at 6 percent
d. $500 a year for 10 years discounted back to the present at 10 percent

SOLUTION PREVIEW

Sharpe Corporation CASH BUDGET
Particulars	November	December	January	February	March	April	May	June	July	August
Cash receipts:
10% of sales of the month			9000	12000	13500	24000	30000	27000	22500
60% of previous month's sales			105000	54000	72000	81000	144000	180000	162000
30% of sales made 2 months before			66000	52500	27000	36000	40500	72000	90000
Total Cash receipts (A)			180000	118500	112500	141000	214500	279000	274500

File name: The-Sharpe-Corporation-5ques.xls File type: application/vnd.ms-excel Price: $15

Wilson Company prepared the following preliminary budget assuming no advertising expenditures

Wilson Company prepared the following preliminary budget assuming no advertising expenditures:

Selling price $10 per unit

Unit sales 100,000

Variable expenses $600,000

Fixed expenses $300,000

Based on a market study, the company estimated that it could increase the unit selling price by 15% and increase the unit sales volume by 10% if $100,000 were spent on advertising. Assuming that these changes are incorporated in its budget, what should be the budgeted net operating income?

A) $175,000

B) $190,000

C) $205,000

D) $365,000                                                                                                               SOLUTION

Salazar Group,s 2005 and 2006 year- end balance sheet follow.

Salazar Group,s 2005 and 2006 year- end balance sheet follow.
1.How many common shares are outstanding on each cash dividend date?
2. What is the total dollar amount for each of the four cash dividends?
3. What is the amount of the capitalization of retained earnings for the stock dividend?
4. What is the per share cost of the treasury stock purchased?
5. How much net income did the company earn during year 2012

CLICK HERE FOR THE SOLUTION

P13-8A Razz Corporation’s common stock is currently selling on a stock exchange at $170 per share, and its current balance sheet shows the following stockholders’ equity section

Problem 13-8A Razz Corporation’s common stock is currently selling on a stock exchange at $170 per share, and its current balance sheet shows the following stockholders’ equity section

ANSWER KEY Problem 13-8A Computation of book values and dividend allocations C3 A2 P2

13. Accounting for Corporations

Larson−Wild−Chiappetta: Fundamental Accounting Principles, Seventeenth Edition 

Problem 13-8A Razz Corporation’s common stock is currently selling on a stock exchange at $170 per share, and its current balance sheet shows the following stockholders’ equity section

Preferred stock—5% cumulative, $___ par value, 1,000 shares

authorized, issued, and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $100,000

Common stock—$___ par value, 4,000 shares authorized, issued,

and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       160,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  300,000

Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 $560,000

Required

1. What is the current market value (price) of this corporation’s common stock?

2. What are the par values of the corporation’s preferred stock and its common stock?

3. If no dividends are in arrears, what are the book values per share of the preferred stock and the common stock?

4. If two years’ preferred dividends are in arrears, what are the book values per share of the preferred stock and the common stock?

5. If two years’ preferred dividends are in arrears and the preferred stock is callable at $110 per share, what are the book values per share of the preferred stock and the common stock?

6. If two years’ preferred dividends are in arrears and the board of directors declares cash dividends of $20,000, what total amount will be paid to the preferred and to the common shareholders? What is the amount of dividends per share for the common stock?

Analysis Component

7. What are some factors that can contribute to a difference between the book value of common stock and its market value (price)?

Check (4) Book value of common, $112.50

(5) Book value of common, $110

(6) Dividends per common share, $1.25

SOLUTION PREVIEW

Problem 13-8A  

1.         Market price = $170 per share (current stock exchange price given)

2.         Computation of stock par values

            Preferred: Paid-in amount / Number of shares = $100,000 / 1,000 = $100

            Common: Paid-in amount / Number of shares = $160,000 / 4,000 = $40  

3.         Book values with no dividends in arrears

            Book value per preferred share           = par value (when not callable) = $100

Common stock
Total equity	$ 560,000

 

File name: P13-8A-Razz-Corporations.doc File type: application/msword Price: $6