Round 11

#1 Homework #1A

Scare Train, Inc. has the following balance sheet statement items: current liabilities of $895,020; net fixed and other assets of $1,782,160; total assets of $2,946,40; and long-term debt of $603,110. What is the amount of the firms net working capital?

Your Answer

#2 Homework #1C (Operating Cycle and Cash Conversion Cycle ratios)

a)     Canadian Bacon Inc. financial statements are presented in the table below.

Based on the information in the table, and using a 365-day year, calculate Days payables outstanding.

 Round the answers to two decimal places


Balance Sheet December 31, 2014


Cash and marketable securities $132,000 Accounts payable $399,000
Accounts receivable $311,000 Notes payable $98,500
Inventories $512,000 Accrued expenses $89,300
Prepaid expenses $11,300 Total current liabilities $586,800
Total current assets $966,300 Long-term debt $799,400
Gross fixed assets $2,104,000 Par value and paid-in-capital $298,000
Less: accumulated depreciation $398,000 Retained Earnings $988,100
Net fixed assets $1,706,000 Common Equity 1,286,100
Total assets $2,672,300 Total liabilities and owner’s equity $2,672,300


Income Statement, Year of 2014

Net sales (all credit) $4,276,600.00
Less: Cost of goods sold $3,292,982.00
Selling and administrative expenses $349,000.00
Depreciation expense $148,000.00
EBIT $486,618.00
Interest expense $49,600.00
Earnings before taxes $437,018.00
Income taxes $174,807.20
Net income $262,210.80

Your Answer:

#6Homework #3B (FV and PV of annuity non-annually)

A car dealership offers you no money down on a new car. You may pay for the car for 3 years by equal monthly end-of-the-month payments of $661 each, with the first payment to be made one month from today. If the discount annual rate is 11.87 percent compounded monthly, what is the present value of the car payments?

Round the answer to two decimal places.

Your Answer:

#7Homework #3C (How much will each annual payment be (Using FV or PV))

You need to accumulate $81,513 for your son’s education. You have decided to place equal year-end deposits in a savings account for the next 13 years. The savings account pays 7.24 percent per year, compounded annually.  How much will each annual payment be?

Round the answer to two decimal places.

Your Answer:

#8Homework #4D (YTM annually, semi-annually)

Blue Crab, Inc. plans to issue new bonds, but is uncertain how the market would set the yield to maturity. The bonds would be 21-year to maturity, carry a 8.83 percent annual coupon, and have a $1,000 par value. Blue Crab, Inc. has determined that these bonds would sell for $733 each. What is the yield to maturity for these bonds?

Round the answers to two decimal places in percentage form. (Write the percentage sign in the “units” box).

You should use Excel or financial calculator.

Your Answer:

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