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I need some one to do this Financial ECN so I can check my answers.

ECN 134 Winter 2016 Homework #1 Due by Lecture (11:00 AM) on Friday January 22 Assignment must be uploaded to SmartSite as a pdf file or MS Word It…

I need some one to do this Financial ECN so I can check my answers.

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ECN 134 Winter 2016
Homework #1
Due by Lecture (11:00 AM) on Friday January 22
Assignment must be uploaded to SmartSite as a pdf file or MS Word
It is ok to scan a hand-written document, but scan to pdf only (no jpeg or camera photo, etc.)
Also, scan must be a single file (no multiple documents or files).
1)
A junior staff member has provided you with the following balance sheet information for 2014 & 2015
along with income statement information for 2015.
Category
2014
2015
Category
2015
Current Assets
$1,000
$1,200
Sales
$10,000
Net Fixed Assets
5,000
5,600
Cost of Goods
Sold
$4,800
Accounts Payable
600
800
Interest Expense
$0
Accrued
Expenses
500
600
Depreciation
$1,200
Long-term Debt
3,000
3,300
Tax Rate
30%
a)
Calculate Net Working Capital for 2015.
b)
Calculate the Operating Cash Flow for 2015.
c)
Calculate the Free Cash Flow for 2015.
d)
Clearly the junior staffer left out a critical element of the balance sheet for 2014 & 2015. What
was left out and what must it be equal to in 2014 & 2015?
2)
a)
Nana just retired at the age of 62 and expects to live until she is 85 years old. She has $402,000 in
her retirement savings account. She is somewhat conservative with her money and expects to earn
6 percent during her retirement years. How much can she withdraw from her retirement savings at
the end of each month if she plans to spend her last penny on the morning of her death?
b)
Nana has some extra cash on hand and decided to give you $3,000 today. You have decided to
save this money so that you can gift it to your grandchildren 50 years from now. How much
additional money will you have to gift to your grandchildren if you can earn an average of 8.5
percent annually instead of just 8 percent annually on your savings?
c)
Nana wants to use the rest of her extra cash to buy herself a new sports car for $41,750, and the
finance office at the dealership has quoted her an 8.6 percent APR loan compounded monthly for
48 months to buy the car. What is the effective interest rate on this loan?

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3)
a)
If the corporate tax rate is 40% and the individual tax rate is 20% (and these are the only taxes), if
a corporation has $50,000 of operating income, what is the after tax income for its owners?
b)
The tax rate is 15% between $0-$50,000 and 25% between $50,001-$100,000. If you earn
$60,000, then what is your average and marginal tax rates?
c)
A bank has quoted to you a monthly rate of 0.25% on a short-term loan. What is the stated annual
rate of that loan?
d)
What is the future value of $8 in three years if the interest rate is 20% and the compounding is
continuous?
e)
What is the future value of a 3-year annuity due with $50 cash flows if the annually compounded
interest rate is 6%?
f)
If we need to find the future value of a current cash flow and interest is compounded quarterly,
how many periods of compounding occur in two and half years?
g)
What is the difference between the present value of a 3-year ordinary annuity with a $20 cash
flow and the present value of a 3-year annuity due with a $20 cash flow when the interest rate is
3.5%?

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