## Description

Question 13

ABC 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 14

If 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 16

ABC 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 17

Consider 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 18

ABC, 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 19

ABC 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 20

What is the effective rate of 27.49% compounded quarterly?

Question 21

Suppose 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 22

ABC, 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 Marshallâ€™s debt ratio.

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