Find present value in annuity due

 

[shortposting]
 

16

Find present value in Annuity Due

 

 

 

N = 5 years, monthly payments

 

 

 

Interest rate = 8%, compounded monthly

 

 

 

PMT = -1000x(8%/12)

 

 

 

FV = -1000

 

 

 

Compute PV

 

 

 

 

 

 

 

 

 

 

17

Find present value in Ordinary annuity

 

 

 

N = 30 years, monthly payments

 

 

 

Interest rate = 8%, compounded monthly

 

 

 

PMT = -850

 

 

 

FV = 0

 

 

 

Compute PV

 

 

 

 

 

 

 

 

 

 

 

Questions 18-27 use the same data

 

 

18

Mortgage – Find payment

 

 

 

N = 20 years, monthly payments, starts at end of January

 

 

 

Interest rate = 7%, compounded monthly

 

 

 

PV = 350,000

 

 

 

FV = 0

 

 

 

Compute payment PMT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

P1 = 1

 

 

 

P2 = 12

 

 

19

Balance at end of December in first year

 

 

20

Total Principal Repayment at end of first year

 

 

21

Total Interest payments at end of first year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

P1 = 61

 

 

 

P2 = 72

 

 

22

Balance at end of December in 6th year

 

 

23

Total Principal Repayment in 6th year

 

 

24

Total Interest payments in 6th year

 

 

 

 

 

 

 

 

 

 

 

 

25

Balance at end of December in 11th year

 

 

26

Total Principal Repayment in 11th year

 

 

27

Total Interest payments in 11th year

 

 

 

 

 

 

 

 

 

 

 

Questions 28 – 31 use the same data

 

 

28

Find Mortgage payment

 

 

 

N = 30 years, monthly payment, Annuity Due

 

 

 

Interest rate = 5.25%, compounded monthly

 

 

 

PV = 200000

 

 

 

FV = 0

 

 

 

Compute PMT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization schedule after 10 years – Same data as Q28

 

 

 

P1 = 1

 

 

 

P2 = 120

 

 

29

Balance after 10 years of payments

 

 

30

Total Principal Repayment after 10 years of payments

 

 

31

Total interest payments after 10 years of payments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32

Compute IRR using following data:

 

 

 

CF0=-10000

 

 

 

CF1=2500

 

 

 

CF2=2500

 

 

 

CF3=3500

 

 

 

CF4=3500

 

 

 

CF5=5000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33

Compute NPV

 

 

 

Same cash flows as Q32

 

 

 

Interest rate = 8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Part II:  Financial Statements Review (35 marks)

 

1.    Build the Income Statement and Balance Sheet for CanDo Inc. based on the information given below, as of December 31, 2009.

 

Accounts payable

$141,000

Accounts receivable

$103,000

Cash and cash equivalents

$154,000

CoGS

$224,700

Common Stock

$1,286,000

Depreciation

$37,000

Dividend payout ratio

40%

Interest paid

$43,000

Inventory

$129,000

Long-term debt

$1,254,000

Net Fixed Assets

$2,530,000

Sales

$330,000

Short-term debt

$132,000

Tax rate

35%

Number of shares

1,000,000

Price per share

$0.50

 

The following table presents the data for CanDo Inc. in as of December 31 2008:

 

Accounts payable

$104,000

Accounts receivable

$146,000

Cash and cash equivalents

$108,000

CoGS

$224,700

Common Stock

$1,286,000

Depreciation

$37,000

Dividend payout ratio

40%

Interest paid

$43,000

Inventory

$123,000

Long-term debt

$1,254,000

Net Fixed Assets

$2,467,000

Sales

$330,000

Short-term debt

$106,867

Tax rate

35%

 

 

Calculate the following financial ratios for CanDo Inc. in the fiscal year of 2009:

a.    Interval measure

b.    Total debt ratio

c.    Long-term debt ratio

d.    Price-earnings (P/E) ratio

e.    Market-to-book ratio

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