Quiz chapter 3&4

Taylor, Inc. has sales of $11,898, total assets of $9,315, and a debt-equity ratio of .55. If its return on equity is 14 percent, what is its net income?

$841.35

Your grandparents just gave you a gift of $3,000. You are investing this money at 3 percent simple interest. How much money will you have at the end of the 10 years?

3900

How long will it take to double your savings if you earn 6.4 percent interest, compounded annually?

$2 = $1 ×(1 + .064)t t = 11.17 years

You want to have $32,000 for a down payment on a house 5 years from now. If you can earn 4.3 percent, compounded annually on your savings, how much do you need to deposit today to reach your goal?

$25,925.58

Turner's Store had a profit margin of 6.8 percent, sales of $498,200, and total assets of $542,000. If management set a goal of increasing the total asset turnover to 1.10 times, what would the new sales figure need to be, assuming no increase in total assets?

$596,200

Andras Technology has accounts receivable of $35,680, total assets of $538,500, cost of goods sold of $325,400, and a capital intensity ratio of .90. What is the accounts receivable turnover rate?

0 15.56 -..> 0 16.77 0 9.12 0 10.13 0 10.31 Accounts receivable turnover = ($538,500 / .90) / $35,680 = 16.77

Tessler Farms has a return on equity of 11.28 percent, a debt-equity ratio of 1.03, and a total asset turnover of .87. What is the return on assets?

5.56 %

You want to invest an amount of money today and receive back twice that amount in the future. You expect to earn 9 percent interest. Approximately how long must you wait for your investment to double in value?

8 years

The present value of a lump-sum future amount:

increases as the interest rate decreases.

Financial Statement Analysis

provides useful information that can serve as a basis for forecasting future performance.