CFIN -STUDENT EDITION-W/ACCESS >CUSTOM<
6th Edition
ISBN: 9780357753118
Author: BESLEY
Publisher: CENGAGE C
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Chapter 2, Problem 17PROB
Summary Introduction
HHD's current assets are $26000, net income is $140,000, long-term debt is $1,755,000, and 35% of the firm's assets are financed with common equity. The firm's
Calculate the current ratio as follows:
Current ratio is one of the liquidity ratios which is used to measure the short-term ability of the firm to pay the firm's short-term obligations with its current assets.
Return on assets is used to measure how profitable the firm is related to the firm's total assets.
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Assume an investor deposits $116,000 in a professionally managed account. One year later, the account has grown in value to $136,000 and the investor withdraws $43,000. At the end of the second year, the account value is $107,000. No other additions or withdrawals were made. During the same two years, the risk-free rate remained constant at 3.94 percent and a relevant benchmark earned 9.58 percent the first year and 6.00 percent the second. Calculate geometric average of holding period returns over two years. (You need to calculate IRR of cash flows over two years.)
Round the answer to two decimals in percentage form.
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