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PART A As a responsible corporate citizen, Carrium Insights Inc set up a college fund for under-privileged students in its community 10 years ago. Carrium deposited $2,500 monthly over the 10 year period in an account earning 6% compounded monthly; no withdrawals were allowed during this funding period. Required: (a) Compute the value of this college fund today, after 10 years’ worth of monthly deposits. (b) If Carrium deposits the value of this fund (answer in (a) above) into a new account earning 8% interest annually, how much would Carrium be able to withdraw at the beginning of each year over the next 10 years to assist qualifying students? (c) The CEO has indicated that he would like the fund to be set up with $500,000 instead of the current amount (answer from (a) above). How long will it take to accumulate $500,000 if Carrium deposits the amount from part (a) in the same account earning 8% interest annually? PART B The Accounting Manager is seeking to analyse the company’s sources and uses of cash for the year 2020. Required: Utilize the 2020 financial statements for Carrium Insights Inc. provided on page 2 to prepare Carrium Insights Inc. Cash Flow Statement for 2020.

PART A As a responsible corporate citizen, Carrium Insights Inc set up a college fund for under-privileged students in its community 10 years ago. Carrium deposited $2,500 monthly over the 10 year period in an account earning 6% compounded monthly; no withdrawals were allowed during this funding period. Required: (a) Compute the value of this college fund today, after 10 years’ worth of monthly deposits. (b) If Carrium deposits the value of this fund (answer in (a) above) into a new account earning 8% interest annually, how much would Carrium be able to withdraw at the beginning of each year over the next 10 years to assist qualifying students? (c) The CEO has indicated that he would like the fund to be set up with $500,000 instead of the current amount (answer from (a) above). How long will it take to accumulate $500,000 if Carrium deposits the amount from part (a) in the same account earning 8% interest annually? PART B The Accounting Manager is seeking to analyse the company’s sources and uses of cash for the year 2020. Required: Utilize the 2020 financial statements for Carrium Insights Inc. provided on page 2 to prepare Carrium Insights Inc. Cash Flow Statement for 2020.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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PART A

As a responsible corporate citizen, Carrium Insights Inc set up a college fund for under-privileged students in its community 10 years ago. Carrium deposited $2,500 monthly over the 10 year period in an account earning 6% compounded monthly; no withdrawals were allowed during this funding period.

Required:

(a) Compute the value of this college fund today, after 10 years’ worth of monthly deposits.

(b) If Carrium deposits the value of this fund (answer in (a) above) into a new account earning 8% interest annually, how much would Carrium be able to withdraw at the beginning of each year over the next 10 years to assist qualifying students?

(c) The CEO has indicated that he would like the fund to be set up with $500,000 instead of the current amount (answer from (a) above). How long will it take to accumulate $500,000 if Carrium deposits the amount from part (a) in the same account earning 8% interest annually?

PART B

The Accounting Manager is seeking to analyse the company’s sources and uses of cash for the year 2020.

Required: Utilize the 2020 financial statements for Carrium Insights Inc. provided on page 2 to prepare Carrium Insights Inc. Cash Flow Statement for 2020.

CASE ANALYSIS - CARRIUM INSIGHTS INC. The following comprehensive assessment is based on a continuing case study of Carrium Insights Inc. The following financial statements have been provided: Carrium Insights Inc. Income Statement For the year ended December 31, 2020 2020 ('000s) 2,800 Sales Cost of Goods Sold Selling & Marketing Costs Admin. Expenses Depreciation Expense Eamings before Interest & Taxes Interest Expense (1,400) (75) (25) (50) 1,250 (20) 1,230 Taxable Income Taxation (20%) Net Income (246) 984 Dividends (50%) Addition to Retained Eamings 492 492 Carrium Insights Inc. State ment of Financial Positi on As at December 31, 2019 & 2020 2019 2020 2019 2020 ('000s) ('000s) ('000s) ('000s) ASSETS LIABILITIES & EQUITY Current Asse ts Current Liabilities Inventories 600 680 Accounts Payables Nates Payables 1,100 1,360 Accounts Receivables 300 340 700 860 1,340 2,360 Cash & Equivalents 1, 100 1,800 2,220 2,000 Non-current Liabilites 770 568 Non Current Asse ts, Net 1,870 2,240 Total Liabilities 2,570 2,788 Equity Common Stock 820 840 Retained Eamings Total Equity 480 972 1,300 1,812 TOTAL ASSETS 3,870 4,600 TOTAL LIAB. & EQUITY 3,870 4,600
Transcribed Image Text:CASE ANALYSIS - CARRIUM INSIGHTS INC. The following comprehensive assessment is based on a continuing case study of Carrium Insights Inc. The following financial statements have been provided: Carrium Insights Inc. Income Statement For the year ended December 31, 2020 2020 ('000s) 2,800 Sales Cost of Goods Sold Selling & Marketing Costs Admin. Expenses Depreciation Expense Eamings before Interest & Taxes Interest Expense (1,400) (75) (25) (50) 1,250 (20) 1,230 Taxable Income Taxation (20%) Net Income (246) 984 Dividends (50%) Addition to Retained Eamings 492 492 Carrium Insights Inc. State ment of Financial Positi on As at December 31, 2019 & 2020 2019 2020 2019 2020 ('000s) ('000s) ('000s) ('000s) ASSETS LIABILITIES & EQUITY Current Asse ts Current Liabilities Inventories 600 680 Accounts Payables Nates Payables 1,100 1,360 Accounts Receivables 300 340 700 860 1,340 2,360 Cash & Equivalents 1, 100 1,800 2,220 2,000 Non-current Liabilites 770 568 Non Current Asse ts, Net 1,870 2,240 Total Liabilities 2,570 2,788 Equity Common Stock 820 840 Retained Eamings Total Equity 480 972 1,300 1,812 TOTAL ASSETS 3,870 4,600 TOTAL LIAB. & EQUITY 3,870 4,600
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