Module 1 Calculation Review Problems

Bully's Cowbells has a return on equity of 24 percent. The company's total asset turnover is 2.3 and the profit margin is 7 percent. If Bully's total equity is $7,600, what is the company's net income?

$1,824

Cosmo's Cougars Inc. has net fixed assets of $2,296, sales of $6,600, net working capital of $550, and current liabilities of $860. How many dollars worth of sales are generated from every $1 in total assets?

$1.78

What is the present value of $12,250 to be received 3 years from today if the discount rate is 5 percent?

$10,582.01

Kathleen invests $122 with Mr. Madoff, her accountant. Mr. Madoff promises that the account will pay 5 percent simple interest each year. How much money will Kathleen have at the end of 5 years?

$152.50

Aunt Peggy's Donuts has net income of $430. The firm pays out 35 percent of the net income to its shareholders as dividends. During the year, the company sold $88 worth of common stock and repurchased $25 in long-term debt. What is the cash flow to stockholders?

$62.50

Griffin's Goat Farm, Inc., has sales of $681,000, costs of $343,000, depreciation expense of $87,000, interest expense of $53,500, a tax rate of 24 percent, and paid out $39,500 in cash dividends. What is the addition to retained earnings?

110,600

Logano Driving School's 2017 balance sheet showed net fixed assets of $5.7 million, and the 2018 balance sheet showed net fixed assets of $6.3 million. The company's 2018 income statement showed a depreciation expense of $250,000. What was net capital spending for 2018?

$850,000 Beg. Net fixed assets + Net Capital Spending - Depreciation = Ending net fixed assets

Bully's Cowbells has a return on equity of 17 percent. The company's total asset turnover is 1.6 and the profit margin is 5 percent. If Bully's total equity is $5,200, what is the company's net income?

$884

Lionel has to pay a penalty for filing his taxes late. The IRS charges 3% in interest for each month the payment is late. Lionel's original tax bill was $7,000, but he now owes $9,980.33. How many years late is his payment?

1 year

According to the Census Bureau, in October 2016, the average house price in the United States was $27,958. 8 years earlier, the average price was $22,608. What was the annual increase in the price of the average house sold?

2.69%

What is the average tax rate for a firm with taxable income of $130,513?

26.17%

What is the future value of $2,958 invested for 8 years at 4.8 percent compounded annually?

FV = PV*(1+r)^n PV = 2958, r =4.8%, n =8 FV =2958*(1+0.048)^8 = 2958 X 1.4550914 = 4304.16 ANSWER : 4304.16

Wims, Inc., has current assets of $5,000, net fixed assets of $23,800, current liabilities of $4,000, and long-term debt of $8,900. a.What is the value of the shareholders' equity account for this firm? (Do not round intermediate calculations.) b.How much is net working capital?

Total Assets = Current Assets + Net fixed Assets = $5000 + $ 23800 = $28800 Total Liabilities = Current Liabilities + Long Term debt = $4000 + $8900 = $12900 Shareholders' Equity = Total Assets - Total Liabilities = $(28800 - 12900) = $ 15900 Net Working Capital = Current Assets - Current liabilities = $ 5000 - $ 4000 = $ 1000