FINANCE MATH

If you wish to find the future value of $100 invested at 10% for 5 years, which of the following would be the correct Excel function?

=FV(0.10, 5, 0, -100) Future value formula in excel: =FV(rate,nper,pmy,pv) *the interest rate must be a decimal and PV should be negative

What is the correct Excel function to calculate the present value of $300 due in 5 years at a discount rate of 10%?

=PV(0.10,5,0,300) *the interest rate must be a decimal and FV should be positive

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You must invest _________ today at 8% to get $2 in one year?

$1.85 bc: PV x 1.08 =$2 pg 97

The FV of $100 compounded for 50 years at a 10% per year is:

$11,739.09 FV=$100x1.10^50

If dividends are $100, stock sold is $10, and stock repurchased is $25, what is the cash flow to stockholders?

$115

If you invest $100 at 10% compounded annually, how much money will you have at the end of 3 years?

$133.10 bc 100x(1.1^3)

The future value of a $100 investment in 4 years compounded at 8% per year equals:

$136.05

If you make an extra $1000 in income and your marginal tax rate is 30% while your average tax rate is %20, then you will pay ________ in taxes on this extra income.

$300

If ending net fixed assets are $100, beginning net fixed assets are $60, and depreciation is $10, then the change in capital spending is:

$50

If the Federal marginal tax bracket is 34%, the state marginal tax bracket is 5%, and the local marginal tax bracket is 1%, how much money will a corporation KEEP if it makes another $1,000,000 in taxable income?

$600,000

you invest $500 at 10% interest per annum. At the end of 2 years with simple interest you will have ________ and with compound interest you will have ________.

$600; $605 Simple Interest = 500(.10)=$50 per year. times 2 years = $100 total. Adding the original principal yields $600. With compound interest, the total is $500(1.10)^2=$605. The FV will always be higher with compound interest.

What is the future value of $100 deposited each year for 2 years beginning next year, then $200 deposited for the next 2 years if you can earn 6% per year?

$643.46 pg. 122

Last year, B inc had net income of 3.5m and paid out $700000 in cash dividends. If income this year is $4.1 million and the dividend payout is held constant, how much will be paid in dividends?

$820,000 ratio

The debt to equity ratio for a company with $1 million in total debt and $2 million in equity is ___________.

.50

If the interest rate is 10% per year and there are 10 years, what is the present value discount factor?

0.3855 bc 1/(1+%)^time aka 1/(1+10)^10

if the future value of $1 invested for 5 years at 10% is 1.611 then the corresponding present value factor for $1 received in 5 years with a 10% discount rate is ________.

0.6208 bc PV= 1/(1+r)^t aka PV=1/FV aka PV = 1/1.611 =.6208

Suppose you expect to receive $5,000 in one year, $4300 more in 2 years, and an additional $5000 in 3 years. What would be the present value amount of each year (1,2,3) assuming the discount rate is 17%?

1) $4,273.50 bc $5000/1.17 2) $3,141.21 bc $4300/1.17^2 3) 3,121.85 bc $5,000/1.17^3

Assume current assets = $11,300; long term liabilities = $45000; and total debt = $54,800. what is the current ratio?

1.15 bc 11300/ (54800-45000)

Alpha Co. has interest expense of $1.2 million, total assets of $84 million, sales of $76 million, and net income of 412.1 million, How will interest expense be recorded in the common-size income statement?

1.58% (because 1.2m/76m=1.58%

What is the correct way to calculate (in a financial calculator) the FV of $100 today for 2 years at 10% per year?

10 I/Y *the interest rate in a financial calculator is entered as a whole number, "10", not a decimal

Vera's has earnings per share of $3 and dividends per share of $1.20. The stock sells for $30 a share. What is the PE ratio?

10 times bc 30/3

AD Corporation has a return on equity of 20% on total equity (CE) of $800,000. AD generates $1.6 million in sales (SLS) on $2.7 million in assets (TA). If return on equity (ROE) is 20%, use the DuPont decomposition to calculate the profit margin (PM)

10% (because ROE=NI/sales x sales/TA x TA/CE so 20%=PM x 0.5926 x 3.375; PM=9.94=10%

BC Corporation has 1,800 shares outstanding and earned $2,700 last year on assets of $2 million and equity of $1.5 million. What is the PE ratio if the stock is currently selling at $18 per share?

12 times (because $18/(2,700/1800)

Nestor's has net income of 315,000, total sales of 3.52m, total assets of 4.4m, and total equity of 1.98m. What is the return on equity?

15.91% 315,000/1.98m

AD Corporation has net income of $425,000 and total sales of $2.5 million. The firm's profit margin is ______%.

17% bc 425,000/2.5m

A firm has an operating profit (EBIT) of $600 on sales of $1,000. Interest expense is $250 and taxes are $120. What is the times interest earned ratio?

2.40 because ($600/$250=2.40)

What is the FV interest factor in a time value of money table for finding the future value of $100 in 10 years at 10% per year interest?

2.5937

Omega Co. has annual sales of $250,000, cogs of $168000, and assets of $322,000. Accounts receivable are $86,200. What is the receivables turnover?

2.90 250,000/86,200

AC Motors has a net income of $51,750, total assets of $523,400, total debt of $267,000, and total sales of $491,300. What is the return on equity?

20.18% ROE = NI/Equity Equity = Assets - Debt 51,750/(523,400-267,000) = 20.18%

How long will it take $40 to grow to $240 at an interest rate of 6.53% compounded annually?

28.33 years

Alpha Star's net income is $300 on $2,000 of sales. The company has $5,000 in assets and equity of $3000. The firm paid out $126 in cash dividends. What is the dividend payout ratio?

41.67% payout ratio = cash dividends / net income = $125/$300 = 41.67%

AD's return on assets is 14% and the firm retains 40% of all its earnings. What would AD's internal growth rate be?

5.93 bc ROA x b / 1- ROAxb .14 x .40 / (1- (.14 x .40))

AD Corporation had a net income of $300,000 and paid out $125,000 in cash dividends to stockholders. The firm's retention ratio is ________%

58 bc (net income-dividends)/net income =.58 or 58%

Rock Construction has current assets of $45m, total liabilities and equity of $67m, and sales of $59m. How would current assets be expressed on a common size balance sheet?

67% bc assets = liabilities + equity 45m/67m=67%

BC Corp has net income of $176000, sales of $1,982,000 and total assets of $2.24m. What is the return on assets?

7.86% bc 176,000/2.24m

Alpha Manufacturing has COGS of $90m and a net income of $9.6m on total sales of $120m. Total assets are $150m. A common-size income statement will show cogs of 75% and a net profit of _____%.

8 i have no idea

BC Corporation had a net income of $3.5m and paid out $700,000 in cash dividends to stockholders. Their retention ratio is ________ %?

80

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