CFIN -STUDENT EDITION-ACCESS >CUSTOM<
6th Edition
ISBN: 9780357752951
Author: BESLEY
Publisher: CENGAGE C
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Chapter 9, Problem 5PROB
Summary Introduction
IRR of a project is calculated using a financial calculator. All financial calculators have an inbuild cash flow register, Cash flows in accordance of the timeline and with proper +/- signs should be input, then press the key labelled “IRR”. It will return the internal rate of return of the project.
A project has initial cost of $20,070 and is expected to generate $8,500 for the next three years.
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Question 3Footfall Manufacturing Ltd. reports the following financialinformation at the end of the current year:Net Sales $100,000Debtor’s turnover ratio (based onnet sales)2Inventory turnover ratio 1.25Fixed assets turnover ratio 0.8Debt to assets ratio 0.6Net profit margin 5%Gross profit margin 25%Return on investment 2%Use the given information to fill out the templates for incomestatement and balance sheet given below:Income Statement of Footfall Manufacturing Ltd. for the year endingDecember 31, 20XX(in $)Sales 100,000Cost of goodssoldGross profitOther expensesEarnings beforetaxTax @50%Earnings aftertaxBalance Sheet of Footfall Manufacturing Ltd. as at December 31, 20XX(in $)Liabilities Amount Assets AmountEquity Net fixed assetsLong termdebt50,000 InventoryShort termdebtDebtorsCashTOTAL TOTAL
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