# Find present value in annuity due

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 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