10. Find: The series of uniform payments that will recover an initial investment
ID: 1141897 • Letter: 1
Question
10. Find: The series of uniform payments that will recover an initial investment. a. P. A(P/A, i, n) b. A- FA/F, i, n) c. A-G(A/G, i, n) 11. Find: The equivalent present value of a geometrically increasing amount (say the rate of increase is 5%). a. P A(P/A, i, n) b. A- G(A/G, i, n) d. P- A(P/A, g, i, n)- where (P/A, g, i, n) must be computed 12. A company reports that their total liabilities are $240 million and their total shareholder's equity is $480 million. What are their total assets? a. $240 million b. S480 million less their current liabilit c. $720 million d. $240 million plus their current expenses. 13. In the previous problem, what is the company's debt ratio? a. 3.33% b. 33.33% c. 1.5% d. 3.000 14. A company experienced a net income at the end of their fiscal year equal to $37 million. The number outstanding Common shares is 5,000,000 (par value of $10.00 per share) and the number of Preferred shares is 2,000,000 (par value if 20.00). What is the company's earnings per share? NOTE: Preferred dividends were already subtracted from earnings to determine the net income.] a. $5.29 b. S12.33 c. S0.74 d. S7.40 15. The 3 Step Process outlined (in proper order) to solve all Engineering Economic problems is: a. Cash flow diagram; Given; What is asked for b. What is asked for; Cash Flow Diagram; Given c. Given; What is asked for; cash Flow Diagram d. Given; Cash Flow Diagram; What is asked forExplanation / Answer
Question 10
The series of uniform payments that will recover an initial investment.
Initial investment implies P.
Uniform payments implies A.
So, we have to calculate A given the value of P.
Calculate A -
A = P(A/P, i, n)
Hence, the correct answer is the option (d).
Question 11
Present value of a geometrically increasing amount is calculated as follows -
P = A(P/A, g, i, n)
Hence, the correct answer is the option (d).
Question 12
Total liabilities = $240 million
Total shareholders' equity = $480 million
Calculate Total assets -
Total assets = Total liabilities + Total shareholders' equity
Total assets = $240 million + $480 million = $720 million
Total assets are $720 million.
Hence, the correct answer is the option (c).
Question 13
Total assets = $720 million
Total liabilities = $240 million
Calculate the debt ratio -
Debt ratio = (Total liabilities/Total assets) * 100
Debt ratio = ($240 million/$720 million) * 100
Debt ratio = 33.33%
The debt ratio is 33.33%.
Hence, the correct answer is the option (b).
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