Assignment 1
Principles of Finance (FIN101)
Assignment Questions: (Marks: 15)
1. An organization had money and marketable securities price $200,000 accounts payables price $51,000, stock of $1,501,500, accounts receivables of $5,288,128, short-term notes payable price $220,000, different present liabilities of 100,000, and different present belongings of $121,800. Calculate the corporate internet working capital and describe how managers handle the agency working capital. (2 Marks)
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2. Your dad and mom have given you $1,500 a 12 months earlier than your commencement so that you could make a journey if you graduate. You properly resolve to take a position the cash in a financial institution CD that pays 7% curiosity. that the journey prices $1600 proper now and that inflation for the 12 months is predicted to be three%. Will you find the money for in a 12 months to buy the journey? Present your calculations. (2 Marks)
three. If the next monetary data associated to XYZ Firm. Whole Revenues final 12 months $970, depreciation bills $50, prices of items offered $450, and curiosity bills $55. On the finish of the 12 months, present belongings had been $121 and present liabilities had been $107. The corporate has a median tax price of 35%. Calculate the online revenue for XYZ Firm by organising an revenue assertion. (2 Marks)
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four. Calculate the common-size steadiness sheet from the next data for the corporate: (2 Marks)
Money 50,000 Accts/Pay 25,800
Acct/Rec 60,000 Accrued bills 30,000
Inventories 200,500 Quick-term N/P 9,700
Whole Present belongings 310,500 Present liabilities 65,500
Web mounted belongings 132,000 Lengthy-term debt 150,000
Whole belongings 442,500 Whole liabilities 215,500
Proprietor’s fairness 227,000
Whole liabilities and homeowners’ fairness 442,500
5. Ten years in the past, Amanda Cortez invested $20,000 in an account paying an annual rate of interest of 5%. What’s the worth of the funding right this moment? What’s the curiosity on curiosity earned on this funding? (2 Marks)
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6. You’ve gotten simply gained a lottery that guarantees an annual fee of $120000 starting instantly. You’ll obtain a complete of 15 funds. In case you can make investments the money circulation in an funding that’s paying eight% yearly, what’s the current worth of this annuity? (2 Marks)
7. XXX firm has forecast a price of return of 20% if the financial system booms (30% chance); a price of return of 19% if the financial system in in a progress section (40% chance); a price of return of 2.50% if the financial system in in decline (20% chance); and a price of return of -10% if the financial system in a despair (10% chance). What’s the firm normal deviation of returns? (three Marks)
