-ten years ago, Amanda Cortez invested $20,000 in an account paying an annual interest rate of 5%. What is the value of the investment today? What is the interest on interest earned on this investment? -You have just won a lottery that promises an annual payment of $130,000 beginning immediately. You will receive a total of 12 payments. If you can invest the cash flow in an investment that is paying 7% annually, what is the present value of this annuity? -A company had cash and marketable securities worth $100,000 accounts payables worth $60,000 inventory of $2,501,500, accounts receivables of $5,500,000 short-term notes payable worth $200,000, other current liabilities of 100,000, and other current assets of $212,800. Calculate the company net working capital and describe how managers manage the firm working capital. -Your parents have given you $2,500 a year before your graduation so that you can take a trip when you graduate. You wisely decide to invest the money in a bank CD that pays 8% interest. You know that the trip costs $2,600 right now and that inflation for the year is predicted to be 3%. Will you have enough money in a year to purchase the trip? Show your calculations. -If the following financial information related to XYZ Company. Total Revenues last year $870, depreciation expenses $40, costs of goods sold $350, and interest expenses $50. At the end of the year, current assets were $100 and current liabilities were $105. The company has an average tax rate of 30%. Calculate the net income for XYZ Company by setting up an income statement. Calculate the common-size balance sheet from the following information for the company: Cash 50,000 Accts/Pay 20,800 Acct/Rec 55,000 Accrued expenses 40,000 Inventories 300,500 Short-term N/P 9,700 Total Current assets 405,500 Current liabilities 70,500 Net fixed assets 102,000 Long-term debt 70,000 Total assets 507,500 Total liabilities 140,500 Owner's equity 367,000 Total liabilities and owners’ equity 507,500

-ten years ago, Amanda Cortez invested $20,000 in an account paying an annual interest rate of 5%. What is the value of the investment today? What is the interest on interest earned on this investment? -You have just won a lottery that promises an annual payment of $130,000 beginning immediately. You will receive a total of 12 payments. If you can invest the cash flow in an investment that is paying 7% annually, what is the present value of this annuity? -A company had cash and marketable securities worth $100,000 accounts payables worth $60,000 inventory of $2,501,500, accounts receivables of $5,500,000 short-term notes payable worth $200,000, other current liabilities of 100,000, and other current assets of $212,800. Calculate the company net working capital and describe how managers manage the firm working capital. -Your parents have given you $2,500 a year before your graduation so that you can take a trip when you graduate. You wisely decide to invest the money in a bank CD that pays 8% interest. You know that the trip costs $2,600 right now and that inflation for the year is predicted to be 3%. Will you have enough money in a year to purchase the trip? Show your calculations. -If the following financial information related to XYZ Company. Total Revenues last year $870, depreciation expenses $40, costs of goods sold $350, and interest expenses $50. At the end of the year, current assets were $100 and current liabilities were $105. The company has an average tax rate of 30%. Calculate the net income for XYZ Company by setting up an income statement. Calculate the common-size balance sheet from the following information for the company: Cash 50,000 Accts/Pay 20,800 Acct/Rec 55,000 Accrued expenses 40,000 Inventories 300,500 Short-term N/P 9,700 Total Current assets 405,500 Current liabilities 70,500 Net fixed assets 102,000 Long-term debt 70,000 Total assets 507,500 Total liabilities 140,500 Owner's equity 367,000 Total liabilities and owners’ equity 507,500

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

Problem 1PS

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-ten years ago, Amanda Cortez invested $20,000 in an account paying an annual interest rate of 5%. What is the value of the investment today? What is the interest on interest earned on this investment?

-You have just won a lottery that promises an annual payment of $130,000 beginning immediately. You will receive a total of 12 payments. If you can invest the cash flow in an investment that is paying 7% annually, what is the present value of this annuity?

-A company had cash and marketable securities worth $100,000 accounts payables worth $60,000 inventory of $2,501,500, accounts receivables of $5,500,000 short-term notes payable worth $200,000, other current liabilities of 100,000, and other current assets of $212,800. Calculate the company net working capital and describe how managers manage the firm working capital.

-Your parents have given you $2,500 a year before your graduation so that you can take a trip when you graduate. You wisely decide to invest the money in a bank CD that pays 8% interest. You know that the trip costs $2,600 right now and that inflation for the year is predicted to be 3%. Will you have enough money in a year to purchase the trip? Show your calculations.

-If the following financial information related to XYZ Company. Total Revenues last year $870, depreciation expenses $40, costs of goods sold $350, and interest expenses $50. At the end of the year, current assets were $100 and current liabilities were $105. The company has an average tax rate of 30%. Calculate the net income for XYZ Company by setting up an income statement.

Calculate the common-size balance sheet from the following information for the company:

Cash	50,000	Accts/Pay	20,800
Acct/Rec	55,000	Accrued expenses	40,000
Inventories	300,500	Short-term N/P	9,700
Total Current assets	405,500	Current liabilities	70,500
Net fixed assets	102,000	Long-term debt	70,000
Total assets	507,500	Total liabilities	140,500
		Owner's equity	367,000
		Total liabilities and owners’ equity	507,500

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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