Project #156670 - Finance

Business Tutors

Subject Business
Due By (Pacific Time) 12/04/2016 12:00 am

#4) At the end of its third year of operations, the Sandifer Manufacturing  Co. had $446,000 in revenues, $3,310,000 in cost of goods sold, $446,000 in operating  expenses which included depreciation expense of $ 154,000 and a tax liability equal to 34% of the firm's taxable icome. Which is the net income of the firm for the year? Complete the income statement for Sandifer Manufacturing Co. (round to nearnest dollar)

Revenues----------------

less: cost of goods sold-------------------

                                                     equals:gross profit-------------Less: operating expenses------------------

                                          equals:net operating income------------less: interest expense---------------------

                                    equals:earnings before taxes----------------less: income taxes-------------------

                                                   equals: net income-------------#5)The Caraway Seed Company grows heirloom tomatoes and sells theie seeds. The heirloom tomatoes plants are preferred by many growers for their superior flavor. At the end of the most recent year the firm had current assets of $49,800 net fixed assets of $249,700 current liabilities of $28,000 and long term debt of $101,600(round to nearest dollar) (a) caraway's stockholders' equity is $------------- (b)the firm net working capital is $--------------(c) If caraway's current liabilities consist of $19,900 in accounts payable and $8,100 in short term debt (notes payable), what is the firm's net working capital?(a) firms net working capital will not change,net working capital =$21,800.(b)firms net working capital will change  by $19,900+8,100, net working capital=$49,800. (c) firms net working capital will change by $19,900, networking capital =$41,700. (d) firm net working capital will change by $8,100,networking capital =$29,900.

#7)Much to your surprise, you were selected to appear on the TV show The price is right. As a result of your prowess in identifying how many rolls of toilet paper a typical American family keeps on hand, you win the opportunity to choose one of the following.$1,200today, $10,000 in 12 years,or 33,000 in 24 years.Assuming that you can earn 7% on your money, which should you choose?If you are offered $10,000 in 12 years, and you can earn 7% on your money, what is the present value of $10,000?---------------(round to nearnest cent). If you are offered $33,000 in 24 years, and you can earn 7% on your money, what is present value of 33,000? (round to nearest cent) Which offer should you choose?a) choose $1,200.00 today because its present value is the higest. b) choose 33,000.00 in 24 yrs. because its present value is the highest. c)choose 10,000.00 in 12 yrs. because its present value is the highest.

#8)You have a choice of borrowing money from a finance company at 25%compounded daily or borrowing money from a bank at 27% compounded monthly. Which alternative is the most attractive? If you can borrow funds from a finance company at 25% compounded daily, the EAR for the loan is --------%round to two decimal places) If you can borrow funds from a bank at 27% compounded monthly, EAR for the loan is ----------(round to two decimal places) Based on the findings above, which alternative is  more attractive? a) loan from bank at 27% compounded monthly(b) loan from the finance company at 25% compounded daily.

#9)You are graduating from college at the end of this semester you decided to invest $5,800 at the end of each yr. into Roth IRA for the next  44yrs. If you earn 8% compounded annually on your investment, how much will you have when you retire in 44 yrs? How much will you  have if you wait 10 yrs before beginning to save and only make 34 payments into your retirement account? How much will you have when you retire in44 yrs?---------(round to nearnest cent).

 #10) Mr. Bill S. Preston, ESq. purchased a new house for $130,000. He paid 10,000 upfront and agreed to pay the rest over the next 15 yrs in equal annual payments that include principal payments plus 9% compound interest on the unpaid balance. What will these equal payments be? (a) Mr. Bill S. Preston Esq. purchased a new house for 130,000 and paid 10,000 up front. How much does he need to borrow to purchase the house?--------(round to nearest dollar) (b) If Bill agress to pay the loan over the next 15 yrs in 15 equal end of yr payments plus 9% compound interest on the unpaid balance, what will these equal payments be?----------(round to nearest cent)  

#11) Lisa Simpson wants to have $,800,000 in 60yrs by making equal annual end of the yr. deposits into a tax deferred account paying 11.50% annually. What must Lisa's annual deposit be? The amount of Lisa's annual deposit must be$-----------(round to nearest cent)

 #12)S&P stock index reprresents a portfolio comprised of 500 large publicly traded companies. On Dec. 24,2007 the index had a value of $1,410 Dec 24,2008, the index was approximately 870. If the average dividend paid on the stocks in the index is approximately 3.0% of the value of the index  at the beginning of the year, what is the rate of return earned on the S&P index? What is your assessment of the relative riskness of investing in a single stock such as Google compared to investing in the S&P index. The rate of return earned on the S&P 500 is ----------%(round to two decimal places). What is your assessment of the relativeness of investing in a single stock,such as Google, compared to investing in the S&P index?(a)  in general, investing in the S&P index is riskier than investing in a single  stock. (b) in general, investing in a single stock is risher than investing in the S&P index (c) there is not enough information given to answer this question. (d) in general  investing in a single stock has the ssame relative riskness as investing in S&P index.

#13)James Fromholtz is considering whether to invest in a newly formed investment fund. The funds investment objective is to acquire home mortgage securities at what it hopes will be bargain prices.  The fund sponsor has suggested to James  that the fund's performance will hinge on how the national economy performs in the coming yr. Specially, he suggested the following possible outcome:

 state of economy                   probability           fund returns

rapid expansion & recovery           5%                      100

modest growth                              50                         45 continued  recession                      40                          15

falls into depression                        5                            -100%(a) expected rate of return from this investment opportunity is ---------------% (round to two decimal places) (b) would you be interested in making such an investment? a) no, I would not be interested in making such an investment. The economy is mostly to sink into a depression. b)  you interest in making such an investment would depend on your risk tolerance. If you do not like risk you should avoid this investment,however if you do not mind risk you may want to make this investment. c). yes, I would be interested in making such an investment. The economy is most likely to begin a rapid expansion & recovery.

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