Question 5 Balance Sheet 2012 2013 Cash $ 1,000 $2,300 Accounts receivable 8,000
ID: 2649934 • Letter: Q
Question
Question 5
Balance Sheet 2012 2013
Cash $ 1,000 $2,300
Accounts receivable 8,000 10,000
Inventories 4,000 8,000
Gross fixed assets 15,000 19,608
Accumulated depreciation (1,600) (5,600)
Total Assets $26,400 $ 34,308
Accounts payable $ 4,200 $ 7,000
Long term debt 4,000 5,000
Common stock 15,000 16,000
Retained earnings 3,200 6,308
Total Assets $26,400 $ 34,308
Income Statement
For the year 2013
Sales $44,900
Cost of goods sold (22,000)
Gross profit 22,900
Operating expenses (10,000)
Depreciation (4,000)
EBIT 8,900
Interest expense (1,500)
EBT 7,400
Taxes (2,220)
Net Income $ 5,180
Based on the information provided in the balance sheet and income statement above, what is the DSI for this company in 2013?
10 points
Question 6
Suppose a capital project has the following cash flows:
The firm?s cost of capital is 12%
Calculate the NPV of the project.
10 points
Question 7
Suppose a capital project has the following cash flows:
The firm?s cost of capital is 12%
Calculate the IRR of the project.
10 points
Question 8
Suppose a capital project has the following cash flows:
The firm?s cost of capital is 12%
Calculate the MIRR of the project.
10 points
Question 9
Suppose a capital project has the following cash flows:
The firm?s cost of capital is 12%
Calculate the Payback of the project.
10 points
Question 10
Suppose a capital project has the following cash flows:
The firm?s cost of capital is 12%
Calculate the Profitability Index (PI) of the project
A. 132.73 days B. 114.25 days C. 95.24 days D. 128.87 daysExplanation / Answer
Qestion 5)
Answer : A
DSI
= (closing inventory / cost of goods sold) x 365 days
= ($8000 / $22000) x 365 days
= 132.73 days
6)
Answer: D
NPV = -75000 + 15000 x PVIF (12%,1) + 18000 x PVIF (12%,2) + 19500 x PVIF (12%,3) + 24000 x PVIF (12%,4) + 24000 x PVIF (12%,5) + 26000 x PVIF (12%,6)
= -75000 + 15000 x 0.8929 + 18000 x 0.7972 + 19500 x 0.7118 + 24000 x 0.6355 + 24000 x 0.5674 + 26000 x 0.5066
= -75000 + 13395 + 14346 + 13884 + 15264 + 13608 + 13182
= $8664.4
7) Answer: B
NPV Discount rate
1370 15%
0 R
-2965 17%
By Interpolation,
R = 15% + [(0 - 1370)/(-2965-1370)] / (17% - 2%) = 15.63%
8)
Answer: C
MIRR
= [(Sum of terminal cash flows / initial investment) ^ (1/n)] - 1
MIRR = (165140 / 75000)^(1/6) -1 = 14.06%
Year Cash Flows FV Factor Terminal value 0 1 15000 1.762342 26435.12525 2 18000 1.573519 28323.34848 3 19500 1.404928 27396.096 4 24000 1.2544 30105.6 5 24000 1.12 26880 6 26000 1 26000 165140.1697Related Questions
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