assets of $121,800. Calculate the company net working capital and describe how managers manage the firm working capital. 2.    Your parents have given you $1,500 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 7% interest. You know that the trip costs $1600 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.  3.    If the following financial information related to XYZ Company. Total Revenues last year $970, depreciation expenses $50, costs of goods sold $450, and interest expenses $55. At the end of the year, current assets were $121 and current liabilities were $107. The company has an avera

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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1.    A company had cash and marketable securities worth $200,000 accounts payables worth $51,000, inventory of $1,501,500, accounts receivables of $5,288,128, short-term notes payable worth $220,000, other current liabilities of 100,000, and other current assets of $121,800. Calculate the company net working capital and describe how managers manage the firm working capital.

2.    Your parents have given you $1,500 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 7% interest. You know that the trip costs $1600 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. 

3.    If the following financial information related to XYZ Company. Total Revenues last year $970, depreciation expenses $50, costs of goods sold $450, and interest expenses $55. At the end of the year, current assets were $121 and current liabilities were $107. The company has an average tax rate of 35%. Calculate the net income for XYZ Company by setting up an income statement.

4.    Calculate the common-size balance sheet from the following information for the company:
see the attached image


5.    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? 

6.    You have just won a lottery that promises an annual payment of $120000 beginning immediately. You will receive a total of 15 payments. If you can invest the cash flow in an investment that is paying 8% annually, what is the present value of this annuity? 

7.    XXX company has forecast a rate of return of 20% if the economy booms (30% probability); a rate of return of 19% if the economy in in a growth phase (40% probability); a rate of return of 2.50% if the economy in in decline (20% probability); and a rate of return of -10% if the economy in a depression (10% probability). What is the company standard deviation of returns? 

 

Cash
Acct/Rec
Inventories
Total Current assets
Net fixed assets
Total assets
50,000
60,000
200,500
310,500
132,000
442,500
Accts/Pay
Accrued expenses
Short-term N/P
Current liabilities
Long-term debt
Total liabilities
Owner's equity
Total liabilities and
owners' equity
25,800
30,000
9,700
65,500
150,000
215,500
227,000
442,500
Transcribed Image Text:Cash Acct/Rec Inventories Total Current assets Net fixed assets Total assets 50,000 60,000 200,500 310,500 132,000 442,500 Accts/Pay Accrued expenses Short-term N/P Current liabilities Long-term debt Total liabilities Owner's equity Total liabilities and owners' equity 25,800 30,000 9,700 65,500 150,000 215,500 227,000 442,500
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